Raisin Annual 2011

An Expert's View about Horticulture and Support Services in Argentina

Last updated: 19 Aug 2011

CY 2012 raisin production is forecast to increase to 40,000 MT due to higher yields and new vines entering production. Raisin production for CY 2011 has also been increased to 37,000 MT. Raisin exports and domestic consumption are estimated to increase as a result of larger production.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 8/1/2011 GAIN Report Number: Argentina Raisin Annual 2011 Approved By: David Mergen Prepared By: Maria Julia Balbi Report Highlights: CY 2012 raisin production is forecast to increase to 40,000 MT due to higher yields and new vines entering production. Raisin production for CY 2011 has also been increased to 37,000 MT. Raisin exports and domestic consumption are estimated to increase as a result of larger production. Executive Summary: Post forecasts an increase in raisin production for CY 2012 to a total of 40,000 MT primarily due to higher yields and new vines entering production. Raisin exports and domestic consumption are estimated to increase mainly as a result of larger production. Post is increasing raisin production for CY 2011 to 37,000 MT as a result of favorable weather conditions which increased yields to a level significantly higher than previously estimated. Commodities: Raisins Production: Production Area Approximately, ninety-five percent of Argentine raisins are produced in the Province of San Juan, which is located alongside the Andes Mountains in western Argentina. The balance is produced in the Provinces of Mendoza, Catamarca, and La Rioja. According to official estimates, 3,850 hectares are currently planted to raisin grapes in Argentina, of which San Juan province accounts for 2,538 hectares, Mendoza 685 hectares, La Rioja 606 hectares, and Rio Negro and Tucuman, the remaining area. Since this is a very dry region, with an annual average rainfall of 8 inches or less, all plantations are irrigated. The main source of water is melted snow from the Andes. It is estimated that about 1,200 additional hectares were planted to raisin grapes in the Province of San Juan in the past year. Production In CY 2012, grape production for raisins is forecast to increase to 165,000 MT due to higher yields and additional vines entering production. CY 2011 production is expected to increase to 155,000 MT, compared to the previous year, as a result of favorable weather conditions which increased yields. CY 2010 grape production for raisins decreased significantly to 114,000 MT, compared to the previous year, as a result of hail damage and late frosts which occurred in the main production area of San Juan Province, which affected yields. Raisin production for CY 2012 is estimated at 40,000 MT, up 3,000 MT from CY 2011. One of the main challenges for the Argentine raisin sector is to increase production to supply international demand focusing on becoming more efficient in improving yields. Another challenge producers currently face is high import tariffs established for Argentine raisins in some export markets. In addition, a major concern is the increase of production costs, especially of raw material, i.e. grapes used for raisin production, labor, inputs, agrochemicals, energy, and fuel, which increased about 30 percent from last year. Private investments in the raisin sector have been increasing during the past few years, and are primarily national capital. Investments were not only devoted to primary production, but also to the incorporation of new technology focusing on obtaining larger raisin volumes for processing and a higher-quality, more competitive product, to supply export markets. Currently, there are about 35 processing plants in the Province of San Juan. In CY 2009, the Argentine Viticulture Corporation (COVIAR, in Spanish) implemented a project through which both grape producers and the industry may receive a subsidy of $3,000/hectare and up to $20,000, without exceeding 20 planted hectares. The impact of this financial support was not significant as it reached a small number of producers. Varieties The main grape varieties destined for raisins are the seedless varieties Fiesta and Flame Seedless, which are attracting new investments in processing technology and storage facilities. Other varieties are: Arizul (INTA CG 351), Sultanina Blanca, Superior Seedless, Moscatel de Alejandria, Torrontes Sanjuanino, Cereza, and Torrontes Riojano. Fiesta is a new variety of U.S. origin, which was recently introduced with very good yields, adaptability, and drying handling. It is estimated that there are currently about 500 hectares of the Fiesta variety planted in San Juan Province, and the area will continue to increase in the near future. The drying process The drying process in Argentina is carried out mainly by utilizing the sun to dry grapes. Grapes are laid on racks, which are located over ripieras, pieces of land covered by stones, where they are sun-dried for a 10 to 15-day period depending on the grape variety. The final product has a moisture content of 15-20 percent. After the drying process is completed, vegetable oil is applied to raisins, which are then packed in 30-pound cases, in bulk, or in clusters. The Argentine Ministry of Agriculture established a protocol for certified raisins that includes HACCP as part of the process. Consumption: Raisin annual domestic consumption is very low, and it varies between 3,000 and 5,000 MT. It is estimated at approximately 0.15 kg/capita, compared to consumption in the United Kingdom (roughly, 2 kg/capita); Canada (1.20kg/capita); and Germany and the U.S. (about 1 kg/capita). Producers have almost completed a strategic plan for the raisin sector, which will be soon submitted to COVIAR, including promotional campaigns to increase raisin domestic consumption primarily targeting children. Argentines do not have the habit of eating raisins on a daily basis, such as a snack or in bakery products. However, new applications for raisins are increasingly being used in the local ice cream, bakery, and confectionery (chocolate and cereal bars) food sectors. Trade: CY 2011 and 2012 raisin exports are forecast to increase to 33,000 and 35,500 MT, respectively, due to larger production. CY 2010 exports decreased to 23,237 MT, compared to the previous year, as a result of lower production and yields. Raisin main export destinations, in volume, in CY 2010, were: Brazil (accounting for 74 percent of total exports), the EU (5.5 percent), Colombia (4.2 percent), Taiwan (2.8 percent), Dominican Republic (2.7 percent), and the U.S. (1.7 percent). Exports to Brazil increased slightly, and exports to South American non-traditional markets, such as Colombia, Chile, and Peru, rebound primarily due to lower freight costs in detriment of the EU, where the demand dropped. The U.S. also imported smaller volumes of Argentine raisins than expected as production of the Thompson Seedless variety, primarily consumed in the U.S. market, decreased significantly. Argentina Export Statistics ? Primary Destinations Commodity: 080620, Grapes, Dried Calendar Year: 2008 - 2010 Partner Country 2008 2009 2010 USD Quantity USD Quantity USD Quantity World 41,028,419 23,951 32,381,548 22,185 46,863,122 23,237 Brazil 26,925,613 15,584 24,078,872 17,157 34,630,731 17,245 EU 3,875,674 2,238 2,746,335 1,666 2,433,283 1,267 Colombia 530,967 317 0 0 1,931,373 984 Taiwan 1,221,122 738 1,512,201 946 1,324,365 645 Dominican Republic 1,038,782 552 847,183 398 1,395,244 629 United States 3,086,094 1,717 1,982,542 1,234 935,355 402 Chile 49,238 27 36,609 29 755,137 383 Australia 1,466,040 1,068 86,161 35 726,417 309 Paraguay 478,960 280 268,272 195 586,200 297 Peru 148,392 80 30,450 20 599,107 292 Bolivia 135,085 123 85,163 85 206,830 159 Uruguay 139,739 77 92,883 66 224,270 114 Costa Rica 271,801 168 24,527 19 175,492 97 Singapore 0 0 25,548 14 144,034 82 Russia 657,849 415 110,600 80 167,478 78 Venezuela 505,385 262 114,050 55 154,448 64 Guatemala 164,518 98 101,261 78 112,429 59 Japan 69,720 25 101,820 27 162,892 53 Source: FAS Buenos Aires based on GTIS data Raisin imports to Argentina are negligible. In CY 2010, imports accounted for 20 MT from India and Chile, for a total value of $49,878. Import and Export Regulations On December 22, 2008, President Cristina Fernandez de Kirchner announced a package of stimulus measures for the Argentine agricultural sector. The measures affecting fruit and vegetables were published in the Official Bulletin, Decrees Nos. 38/2008 and 40/2008, on December 31, 2008. They established that the export tax for pears, apples, peaches, citrus fruit, grapes, blueberries, strawberries, dried fruit, onions, frozen potatoes, beans and pulses be reduced by 50 percent (i.e. raisins currently pay a 2.5 percent export tax). The changes announced did not have a significant impact on overall fruit production. Export taxes for these products were already relatively low (5 percent to 10 percent) and a reduction by half does not amount to a significant alleviation of tax burden. Part of Argentina?s 2.5 percent export tax on raisins is rebated depending on the size of the container. Raisin 0806.20 Outside the Mercosur Area Import Tariff 10 % Statistical Tax 0.50% Export Tax 2.5% Export Rebate: Cases containing between 2.5 kg. and 20 Kg. 4.05% Cases with 2.5 kg. or less 6.00% Inside the Mercosur Area Import Tariff 0.00% Statistical Tax 0.50% Export Tax 2.5% Export Rebate: Cases containing between 2.5 kg. and 20 Kg. 4.05% Cases with 2.5 kg. or less 6.00% Source: FAS Buenos Aires based on data from Tarifar database Marketing: Raisin export values in CY 2010 were significantly higher than FOB prices the previous year (increases varied between 21 and 51 percent), and they were in turn exceeded by FOB prices in CY 2011, which were even higher. That helped raisin producers facing a significant increase of production costs. Prices Table Country Argentina Commodity Raisin Prices in US$ FOB per uom MT Year 2009 2010 % Change Jan 1,881 1,723 -8.4 Feb 1,337 1,761 +31.7 Mar 1,388 1,684 +21.3 Apr 1,393 1,873 +34.5 May 1,413 1,972 +39.5 Jun 1,402 1,996 +42.4 Jul 1,430 2,096 +46.6 Aug 1,423 2,150 +51.1 Sep 1,467 2,058 +40.3 Oct 1,516 2,117 +39.6 Nov 1,521 2,037 +33.9 Dec 1,611 2,237 +38.9 Exchange Rate 4.12 Local Currency/US $1 Date of Quote 07/20/2011 MM/DD/YYYY Source: FAS Buenos Aires based on GTIS data The following are raisin FOB prices for CY January-April 2011: $/MT Jan 2,078 Feb 1,926 Mar 1,948 Apr 2,035 Production, Supply and Demand Data Statistics: Raisins A 2009/2010 2010/2011 2011/2012 rgentina Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2009 2010 2011 USDA O N USDA ew Post N USDA ew Post New Post fficial Official Official Area Planted 0 4,700 0 5,700 6,000 Area Harvested 0 4,200 0 5,100 5,400 Beginning Stocks 0 0 0 0 0 Production 27,000 27,000 29,000 37,000 40,000 Imports 0 20 0 10 10 Total Supply 27,000 27,020 29,000 37,010 40,010 Exports 23,400 23,237 25,000 33,000 35,500 Domestic Consumption 3,600 3,783 4,000 4,010 4,510 Ending Stocks 0 0 0 0 0 Total Distribution 27,000 27,020 29,000 37,010 40,010 TS=TD 0 0 0 Comments Units of Measure: hectares and metric tons AGR Number Comments To Post
Posted: 19 August 2011, last updated 19 August 2011

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