Europe is a happy hunting ground for Chilean kiwifruit exporters. This season has begun well and promises to continue the trend as northern and southern hemisphere supplies dovetail nicely to create room to manoeuvre. Emerging from the shadow of New Zealand fruit, Chile's kiwifruit has gained a reputation that is encouraging more European customers to stick with one source throughout the southern hemisphere season.

“This is a good season for us, with a lot of demand from different markets and very good prices,” says Carlos Loyola at Exportadora Rucaray in Santiago. Rucaray has thrown its hat firmly into the European ring, doubling its kiwifruit exports to the market each of the last three seasons.

Chilean exporters expect to benefit this year from a slight shortfall and late start to New Zealand's kiwifruit production and an early end to Italian production. A SARS-driven buying splurge by Asian consumers has also helped to keep the European market tight, and the high-valued euro is tending to push even more of Chile's kiwifruit towards markets in the old continent.

Rucaray and many other Chilean firms finished their kiwifruit harvest in late May and as much as 70 per cent of the crop has already been shipped. However, the season will extend through to November, due in the main to the heavy investment made in high-tech packing and storage techniques in recent times.

Copefrut is Chile's biggest exporter of kiwifruit, and Alexis Cordero, the company's European representative, believes that the consistent quality and volume on offer from Chile have increased the support it receives from customers in Europe. Asda in the UK for example, has consistently supported Chilean kiwifruit for the last four seasons.

Copefrut splits its kiwifruit season into two parts. The first section, for which all of the fruit is now in Europe, has been characterised by good, firm fruit and equally firm prices. The second, with controlled atmosphere fruit, begins in late July, early August and runs through to late October. Advances in this area are the basis for a turnaround in customer perspectives on Chilean capability.

“Our early fruit has performed very well so far,” says Cordero. “We have been able to hold prices at a good level, even when the first arrivals of New Zealand fruit came in last week. Traditionally, this has been the point when European customers have switched, but many customers are continuing with Chile right through now.

“We have been working for a few years to reach the position where we now find ourselves,” he adds. “Chilean fruit can now provide the consistency required by this market through the whole season. Customers are no longer having to source from New Zealand because we can compete on price, our quality is comparable, we have enough volume to sustain long programmes and we are more flexible in the way we work than the New Zealanders. Customers can deal with one supply source throughout, guarantee the performance of the fruit and do so on their own terms.”

The buoyant North American and European markets are expected to sustain the endgame to Chile's kiwifruit deal, which has traditionally been aimed at the Latin American markets which are now suffering economically. Cordero says: “There is virtually no market for Chilean kiwifruit in South America this year. We have seen problems occurring with apples as more reds and Granny Smith have hit Europe from both Chile and Argentina. For kiwifruit however, the supply situation generally is more in our favour and I don't foresee any similar issues.”

Kiwifruit is Chile's third most important fresh fruit export, after table grapes and apples. Volumes have been growing moderately over the past three seasons, but not as dramatically as when kiwifruit were first introduced to the country in the mid 1980s.

Last season Chile exported 13.4 million cases of kiwifruit, compared to 12m cases exported in 2000/2001 and 9.9m cases in 1999/2000.

Europe was the most important market destination in 2001/2002, receiving 7.7m cases of kiwifruit (including 608,000 cases to the UK), followed by North America with 2.4m cases, Latin American with 2.1m cases, the Far East with 874,000 cases and the Middle East with 356,000 cases.

Loyola believes Chilean kiwifruit exports could be down by as much as 20 per cent this season, but there is a range of opinions as others in the industry calculate the shortfall to be more in the order of four to 10 per cent.

“We are estimating that the kiwifruit harvest will be off by seven to nine per cent,” says Carlos Sabaini at Trinidad Exports SA, in Viña del Mar, close to Valparaiso. Trinidad Exports will export more than 900,000 cases of kiwifruit this season, predominantly to EU markets. Sabaini attributes the lower volumes to cold weather during the spring, which dissuaded bees from pollinating as much as they normally do, and to problems with fungi in some orchards, a number of which were wiped out completely for the year.

“Our company has been in the kiwifruit deal since the beginning, and we've lived through the boom and bust cycles that characterise the business,” Sabaini says. “The industry has really stabilised here in Chile the past five or six years, with about 9,000 hectares under production, compared to 12,000ha during the heyday. Still, local nurseries are selling a lot of kiwifruit trees, so I think the drop in volumes this season will only be a temporary thing.”

The scenario of increasing yields against falling area is testament to the advances made by the Chilean industry. Christian Echeverria at Geofrut SA in Santiago agrees with Sabaini that volumes from Chile will continue to be strong in the long term. Geofrut exported 278,000 boxes of kiwifruit in 2001/2002, the majority of which headed for the North American market.

Although exporters like Geofrut are bound to be attracted to the EU market this season because of the improved euro exchange rate, Echeverria says it is difficult for traders to make dramatic changes in market destinations.

“When you are dealing with large volumes of kiwifruit you have programme commitments that must be honoured, or you won't be successful in the business,” Echeverria says. “This means it is impossible to radically change your market destinations, except for your spot market sales, which usually don't amount to very large volumes, especially when there is a harvest shortfall. Still, everyone in Chile is benefiting from better kiwifruit prices, no matter which markets they are sending to.”

Decofrut, a Santiago-based fruit analysis and service provider, confirms that kiwifruit volumes to Chile's different markets have remained stable. Analyst Isabel Quiroz notes that EU prices have ranged from US$11 to US$14 per 10kg case, depending on fruit size. The average FOB price in May (US$ 12.5 per case) was 12 per cent higher than last year at the same time (US$11.2) and almost as high as the 2000/2001 price. The market, however, is expected to react to the heavier volumes coming from Chile and New Zealand.”

According to Roger Manning, director general of the Chilean Fresh Fruit Association ñ Europe, continued consumer growth in Europe is clearly pushing demand for quality. “The greater care Chilean exporters and importers are taking in logistics and packaging is clearly paying off,” he says.

“We are seeing increased performance for our articles of fruit both in the UK and increased market growth in southern Europe. One should be looking for increased markets if you are increasing plantations.”

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