Fresh Avocado Annual Report

An Expert's View about Tree and Bush Fruits and Nuts in Chile

Posted on: 19 Dec 2012

Avocado production and exports are expected to decline this season due to adverse weather conditions last winter.

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: 11/29/2012 GAIN Report Number: CI1235 Chile Avocado Annual Fresh Avocado Annual Report Approved By: Rachel Bickford, Agricultural Attaché Prepared By: Luis Hennicke, Agricultural Specialist Report Highlights: Avocado production and exports of are expected to decline this season due to adverse weather conditions last winter, the alternate bearing effect and a severe drought which is affecting an increased production area. Executive Summary: Chilean avocado production is expected to decline again during the present 2012/13 production season compared to the last season. Adverse weather conditions, alternate bearing effect in some production areas and a severe drought which is affecting an increased production area in the most important production region, are responsible for the significant fall in production and exports for this season. For the 2013/14 season, output is forecasted to increase again, as an abundant blooming in most production areas forecasts a good production if weather conditions remain normal. Commodities: Avocados, Fresh Production: Production in 2011/2012 is down compared to the previous 2010/2011 production season because frost over the winter coupled with a drought which is affecting an ever increasing production area. Exports have fallen accordingly. Domestic demand and consumption continues to be strong and producers are choosing to sell to the domestic market rather than export. For the 2012/13 production season the industry expects total output to fall again as a drought is affecting a larger production area than last year, mainly in the Aconcagua Region. 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. For 2013/14 production season the industry expects production to recuperate as blooming has been abundant in almost all areas not affected by the drought, but total final production will depend on weather during next winter (May –Aug, 2013). 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 have expanded at a slower rate during the last few years when compared to the past, mainly because prices leveled off and returns have fallen due to a continuous revaluation of the peso against the dollar, together with increasing costs expenditures which are in pesos, while sales are in dollars, have reduced margins considerably. An extensive and increasing area in the Aconcagua Region is being affected by the worst drought ever in a productive valley in Chile for the last four years, industry sources have indicated that this could affect as much as 2,200 Has. They 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 in 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 represented almost 100 percent of total exports (99.8%). Consumption: In Chile during the last few years domestic avocado consumption has become an interesting alternative for producers mainly due to falling revenues from exports due to increasing production costs and the continuous devaluation of the dollar against the Chilean peso. Domestic prices obtained by producers often are higher than prices obtained for exports. As a result many 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 39,300 183,000 102,373 2012 37,650 180,000 90,000 1/ 2013 37,000 190,000 100,000 2/ Note: 1/ Estimate 2/ Forecasts Source: Ministry of Agriculture, Central Bank Trade: Although falling in importance, the largest export market for Chilean avocados is still the United States, followed by the European Community. The US market received 66 percent of Chile’s total avocado exports in 2011, down from over 70 percent the past. Exports to the EU have increased during the last few years as a result of a big industry effort made to diversify their 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 through 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$2.3 million this year, down from US$3.3 million last year. 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. There are no promotional campaign in Europe programmed for this year. They will have some advertising in Chile but only have a budget of $20,000 U.S. dollars which won’t buy them much. Policy: The Chilean Government has no subsidy or special tax incentives for avocado production or exports. Marketing: Although avocados from California and Mexico can enter the Chilean market, this country’s rather large, year-round avocado production tend to discourage commercial imports for all but a few months during the marketing year. Every year there are some imports, which come mainly from Peru and Argentina. Less than 1,000 MT were imported in 2012, down from almost 2,000 MT imported in CY2011. Production, Supply and Demand Data Statistics: Export Trade Matrix Country Chile Commodity Avocados, Fresh Exports for: 2010 2011 Time Period Jan-Dec Units: M.T. Units: Volume Value Volume Value U.S. 65,024 103,234 U.S. 67,983 139,637 Others Others Netherlands 19,311 33,626 Netherlands 18,689 34,566 Argentina 8,425 10,294 Argentina 5,489 8,737 U.K. 5,251 9,285 U.K. 4,591 9,914 Spain 4,611 8,346 Spain 2,588 4,802 France 2,824 4,487 Japan 1,014 2,185 Sweden 1,137 1,877 France 691 1,334 Japan 365 682 Hong-Kong 522 972 Hong-Kong 301 570 Belgium 437 901 Belgium 195 357 Uruguay 106 237 Switzerland 188 396 Sweden 102 204 Total for Others 42,608 34,229 Others not Listed 291 162 Grand Total 107,922 173,604 102,373 203,992 Time Period Jan-Oct Exports for: 2010 2011 U.S. 55,292 92,983 U.S. 34,337 53,152 Others Others Netherlands 8,757 14,136 Netherlands 16,844 25,172 Argentina 3,549 6,315 Argentina 6,615 9,298 U.K. 2,609 5,264 U.K. 3,549 5,566 Spain 1,949 3,287 Spain 3,183 5,547 Japan 642 1,117 France 1,099 1,850 France 519 991 Belgium 624 1,249 Belgium 229 456 Japan 536 551 Hong-Kong 179 388 Hong-Kong 507 863 Sweden 102 204 Uruguay 59 95 Uruguay 93 220 Denmark 21 43 Total for Others 18,628 33,037 Others not Listed 70 33 Grand Total 73,989 125,476 67,408 103,429 Note: Volume in M.T. and Value in Thous.US$ F.O.B.
Posted: 19 December 2012

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