Avocado Annual

An Expert's View about Agriculture and Animal Husbandry in Chile

Posted on: 16 Dec 2011

Both production and exports of avocados are expected to fall this harvest season, due to adverse weather conditions combined with the alternate bearing effect and a severe drought which is affecting the main production area.

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: 11/29/2011 GAIN Report Number: CI1046 Chile Avocado Annual Enter a Descriptive Report Name Approved By: Rachel Bickford, Agricultural Attaché Prepared By: Luis Hennicke, Agricultural Specialist Report Highlights: Both production and exports of avocados are expected to fall this harvest season, due to adverse weather conditions combined with the alternate bearing effect and a severe drought which is affecting the main production area. Executive Summary: Chilean avocado production is expected to fall again during the present 2011/12 production season compared to last season. Adverse weather conditions, alternate bearing effect in some production areas and a severe drought affecting a large part of the production region are responsible for the significant fall in production and exports for this season. For the 2012/13 season a significant number of orchards are entering their productive stage or are at their incremental stage of production, so the output is forecasted to increase again, despite a fall in total planted area. Commodities: Avocados, Fresh Production: Production in 2010/2011 fell again when compared to the 2009/2010 season because cold and freezing weather together with alternate bearing (fruit stress) affected total production. Exports and domestic consumption fell accordingly. For the present 2011/12 season production is expected to fall further as a result of a severe drought which is affecting the Aconcagua Region particularly the Cabildo valley. Many producers have lost their orchards completely, industry sources indicated that over 2,000 Ha are being affected. The industry in Chile follows the production season that goes from July to June. Most Chilean avocados are produced in arid regions with little rain, except during the winter months, consequently most orchards are frequently free of pests and spraying is minimal or not necessary. Production area has expanded during the last few years. Increases in planted land have been almost exclusively devoted to the Hass variety, which represents over 80 percent of total production and almost 100 percent of total exports (99.8% in CY2010). Planted Area: Avocado plantings had been expanding at a slower rate during the last few years when compared to the past, as prices have leveled off and returns have fallen due to a continuous revaluation of the peso against the dollar. Increasing costs expenditures which are in pesos and sales are in dollars, have reduced margins considerably. Additionally, over the last two years, the total planted area has fallen as much as 2,000 Ha and will probably fall another few hectares during the coming year, as an extensive area in the Aconcagua Region is being affected by the worst drought ever in a productive valley in Chile. The Industry sources added that together with the uprooting of old non productive orchards and the orchards affected by the drought, total planted area could probably be reduced another 1,000 Ha, totaling as much as 3,000 hectares in total. A little over 98 percent of all Chilean commercial avocado trees are planted in the central area of the country - from Region IV through Region VI. Almost all the planting expansion has been of the Hass variety in the last decade, there are over 20 other varieties planted in Chile. Out of the total planted area in Chile around 30,000 has are planted to the Hass avocado variety which represents almost 100 percent of total exports. Consumption: In Chile during the last few years domestic avocado consumption is becoming an interesting alternative for producers mainly due to increasing production costs and the continuous devaluation of the dollar against the Chilean peso which reduces economic returns to producers. Domestic prices obtained by producers often are similar or higher than prices obtained for exports. As a result a large number of producers are favoring the less risky domestic market. Table ? Chile: Avocado Planted Area, Production and Exports Years Planted Area (Ha) Production (MT) Exports (MT) 1973 4,490 14,500 - 1980 6,180 25,000 12 1985 7,605 28,900 1,200 1990 8,315 38,800 11,557 1995 11,560 48,000 12,000 1999 19,800 80,550 34,788 2000 21,202 95,000 52,049 2001 21,800 98,000 52,492 2002 22,900 129,000 78,071 2003 23,300 148,000 97,646 2004 24,500 170,000 113,508 2005 24,900 177,000 136,412 2006 26,731 185,000 110,893 2007 35,350 215,000 146,397 2008 40,098 147,100 84,998 2009 40,598 261,600 166,184 2010 40,650 196,000 107,922 2011 39,300 183,000 110,000 1/ 2012 37,650 200,000 120,000 2/ Note: 1/ Estimate 2/ Forecasts Source: Ministry of Agriculture, Central Bank Trade: The largest export market for Chilean avocados is still the United States, followed by the European Community. The US market received 60 percent of Chile?s total avocado exports in 2010, down from over 70 percent the previous years. Exports to the EU have increased during the last few years as a result of a concentrated industry effort to diversify their export markets. As a result of the US-Chile FTA, Chile has a duty free quota, which started with 49,000 M.T. in CY2004. This quota increases 5 percent yearly over the next 12 years, after which avocados will enter the US duty free (CY2016). Chilean avocado exports are highly dependent on the U.S. market. The California Avocado Commission?s promotional campaign which will continue this year is financed trough the Check Off program. The Chilean Avocado Importers Association (CAIA) is in charge of the market promotion in the US with a budget of US$4.0 million. The promotional campaign includes radio and television programs and ads on buses. Soccer in the US has reportedly become the best promotional scenario for CAIA?s activities reaching an estimated 8.7 million consumers. Additionally, the promotional campaign in Europe covers Spain, Denmark Sweden, Germany and the U.K with a budget of about US$600 thousand. Policy: The Chilean Government has no subsidy or special tax incentives for avocado production or exports. Marketing: Although avocados from California and Mexico can enter the Chilean market, this country?s rather large, year-around avocado production tend to discourage commercial imports for all but a few months during the marketing year. Every year there are some imports, which come mainly from Peru and Argentina. Almost 2,000 MT were imported in CY2011. Production, Supply and Demand Data Statistics: Export Trade Matrix Country Chile Commodity Avocados, Fresh Exports for: 2009 2010 Time Period Jan-Dec Units: M.T. Units: Volume Value Volume Value U.S. 116,997 160,336 U.S. 65,024 103,234 Others Others Netherlands 19,729 30,474 Netherlands 19,311 33,626 Spain 9,893 14,778 Argentina 8,425 10,294 U.K. 7,023 9,239 U.K. 5,251 9,285 France 5,050 7,641 Spain 4,611 8,346 Argentina 3,329 3,340 France 2,824 4,487 Sweden 1,724 2,416 Sweden 1,137 1,877 Japan 1,664 2,361 Japan 365 682 Switzerland 190 404 Hong-Kong 301 570 Denmark 151 214 Belgium 195 357 Hong-Kong 82 119 Switzerland 188 396 Total for Others 48,835 42,608 Others not Listed 353 291 Grand Total 166,184 231,843 107,922 173,604 Time Period Jan-Oct Exports for: 2010 2011 U.S. 45,793 49,212 U.S. 55,292 92,983 Others Others Netherlands 11,779 15,949 Netherlands 8,757 14,136 Argentina 6,757 7,818 Argentina 3,549 6,315 Spain 3,899 5,766 U.K. 2,609 5,264 U.K. 3,814 6,115 Spain 1,949 3,287 France 2,001 2,911 Japan 642 1,117 Sweden 713 1,067 France 519 991 Japan 302 495 Belgium 229 456 Hong-Kong 182 350 Hong-Kong 179 388 Belgium 108 156 Sweden 102 204 Switzerland 105 135 Uruguay 93 220 Total for Others 29,660 18,628 Others not Listed 187 70 Grand Total 75,640 90,167 73,989 125,476 Note: Volume in M.T. and Value in Thous.US$ F.O.B.
Posted: 16 December 2011

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