05/02/2005
Chile's clementine traders are keen to place their fruit for the first time this year in the U.S. market, hopeful that their fast-growing clementine deal will be as well received by U.S. consumers as it has been by European consumers. Chile's record harvest is set to begin in mid-May, with the United States targeted as the market of choice for the early part of the deal.

Last season Chile exported 2.1 million cases of clementines, mostly to European and Canadian retailers. Volumes this year are expected to grow by at least 30 percent to 2.75 million cases, with the United States receiving as much as one-third of the harvest, or 900,000 cases.

"We have been waiting a long time to get a chance to work the U.S. market," Arturo Costabal, trade director at Unifrutti Ltda. (Santiago), Chile's largest clementine exporter, said in a statement the last week in April. We can get to the U.S. market before competitors like South Africa, and the quality and color of our clementines is unsurpassed by any of our rivals."

Chile's clementine deal has been growing fast in recent seasons: volumes soared by 67 percent in 2003-04, and 30 percent increases are projected for at least the next three seasons as newly planted orchards mature.

The growth is the result of a deliberate fruit diversification strategy promoted by many growers and exporters anxious to extend the use of their business infrastructure throughout the year. Chile's fresh-fruit season normally extends from October through April or May, centering on table grapes, apples, kiwifruit and stone fruit. The diversification into clementines and other citrus like lemons extends the season well into August.

"I see the clementine deal evolving and consolidating itself here in Chile in a very positive way," said Mr. Costabal. We're growing the fruit in different regions of our country, experimenting with different varieties, even as we are learning about the different requirements of our main markets. Clementines are consolidating themselves as another very important fruit export for Chile. Just now our total production isn't that significant compared to other producers, but we are growing steadily."

Chile's clementine deal has already established itself in Europe, where it must go head to head with strong competition from South Africa. Last season, however, many exporters shipped significant amounts of their fruit to Canada when the European market became oversupplied because of large shipments from South Africa, Peru, Argentina and Uruguay. Well over half of Chile's Europe-bound clementines last season was sold to British consumers (64.2 percent, or 493,000 cases).

"We want to be especially cautious in the European market because our fruit goes head to head with clementines coming from South Africa," said Miguel Allamand, chief executive officer at Subsole (Santiago), a leading Chilean clementine export firm. This coming season we expect there will be very strong demand for our clementines in the early part of the season in Asia and that the U.S. demand will be especially strong in April and May, before most of the U.S. summer fruit is harvested and markets get saturated with domestic fruit. So it is good to have a more diversified market for our fruit."

Other Chilean traders share Mr. Allamand's caution about the European Union deal, and confirm that the newly opened U.S. market provides a much appreciated option.

"Last year was difficult for our clementines," said Emilio Saavedra, trade manager at Agricom (Santiago). We began well in Japan in 2004, and continued doing well into Europe. But things got very complicated in the U.K. because our fruit arrived while there was still South African fruit in the market. So we want to develop the U.S. market and have found a lot of interest from clients. Still, this first year, we don't expect to send really large volumes, something on the order of 20 to 30 percent of our harvest."

Independent analysts like Decofrut, a Santiago-based fruit service and consulting company, confirmed that Chile's traders will mostly likely look to the U.S. market in the early part of the deal, and then work the European Union in the later part of the deal, after supplies from South Africa and Uruguay have diminished.

"The best opportunities in the U.S. market will be for fruit from early zones or early variety fruit," according to Decofrut. Still, most of Chile's clementines will be harvested mid-season, so the results in the U.S. market will depend on the management of those volumes, the quality of the fruit and the marketing effort."