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Report Highlights:

Chile’s production estimates for peaches and nectarines are expected to increase and cherries will expand significantly as large areas of new planted orchards are coming into production and weather conditions have been more favorable for all stone fruit production.

Executive Summary: 

Chilean cherry production fell significantly in MY2012/2013 when compared to the previous year as a result adverse weather conditions. Weather has been bad during last winter, mainly because of a lack of cold days coupled with hail and rain during the blossom period. Production and exports of peaches and nectarines fell as planted area continued to decrease due to low economic returns and adverse weather conditions that affected all stone fruit production. A revaluation of the Chilean peso against the dollar and increasing production costs encourages farmers to uproot low producing orchards. This is not the case for cherries producers who still obtain good economic returns in spite of the deterioration of the exchange rate; which encourages farmers to increase plantings. During the last few years planted areas to cherries have increased significantly. For cherries a further expansion of production can be expected as additional planted area is coming into production and a still large area is in the incremental stage of production. 

Fresh Peaches & Nectarines 

Production: 

Total planted area of peaches and nectarines continue to decrease when compared with previous years as some old orchards are not replaced. But total production does not show a corresponding significant reduction as many farmers update their older orchards with new more productive varieties. As new varieties develop, most producers have been replacing old, less acceptable varieties, especially nectarines. As peaches have a shorter shelf life and are less attractive to consumers, planted area to this fruit has decreased proportionally more during the last few years. Additionally, declining economic returns during the last few years has also contributed in uprooting peach orchards in a larger than previously estimated area. 

However, in general, output variations are mainly the result of changing weather conditions. Some varieties also are affected by yearly alternate bearing effect. 

There are over 36 peach varieties for fresh consumption and another 36 varieties of nectarines grown and exported from Chile. Peach and nectarine varieties often become obsolete because of changing consumer tastes, even sometimes before trees begin bearing fruit. This coupled with high price fluctuations during the last few seasons and diminishing returns will contribute to the further reduction in total planted area in the coming years. 

MY2012/13 brought a smaller than both previously predicted peaches and nectarine harvest and last year’s output, mainly as a result of adverse weather conditions during last winter and freezing weather during the spring. For the MY2013/14 production season it is still early for an accurate prediction, but industry sources have reported that as a result of cold weather which allowed to accumulate enough cold hours for a good budding during this winter in most production areas, will probably result in a higher production volume of peaches and nectarines when compared to last season. The quality of the production is also expected to improve which will increase next season’s export volumes. 

Consumption: 

A large percentage of the total peach and nectarine production is consumed as fresh fruit (40%). There is no breakdown on the volume of clingstone versus freestone production or consumption in Chile. Like most fresh fruit consumption, domestic consumption of peaches and nectarines is mainly lower quality fruit that does not make it to the export market. 

Trade: 

Close to 50 percent of Chile’s total peach and nectarine exports are bound for the United States. 

Latin America is the second largest export market with a 23 percent of total exports, followed by deliveries to Europe with roughly 15 percent. The relatively short shelf life of peaches and nectarines and is the major factor influencing the search for nearby markets. Some stone fruits are imported; these come mainly from the United States. Among them, peaches and nectarines have been arriving during offseason and are successfully marketed in large supermarket chains. Over 95 percent of peaches and nectarines are exported from December through April with largest amounts during the month of February when almost 30 percent of the total volume is delivered yearly. 

Fresh Cherries,(Sweet&Sour) 

Production: 

The cherry production area continues to expand significantly every year. Industry sources have indicated that during last few years between 1,500 to 2,500 hectares yearly have been planted, totaling almost 18,000 hectares today. Close to 40 percent of the total planted area is still not in production or is in the incremental stage of production. As a result cherry production should increase significantly during the next few years if we have favorable weather patterns. Cherries are one of the few fruits that producers are increasing their planted area significantly in spite of the continued fall of the dollar value against the peso which is hurting the fresh fruit industry in general by increasing production costs which are in pesos and diminishing returns which are in dollars. 

Producers have expanded the production period by introducing more weather resistant varieties and planting these further souths. 

The main varieties planted are Bing, Sweet Heart and Santina which together represent over 88 percent of the total cherries exported. Among the main new-planted varieties are Lapins, Van, Stella and Summit. A total of over 70 varieties are planted in Chile. 

Although Chile has great potential for cherry production, every year the total output is affected by both climatic factors and/or the extreme delicacy of the fruit. A pre-harvest rain or other adverse weather conditions can damage the delicate skin of the fruit. These factors make the fruit production very expensive, as it requires extreme care and specialized labor. The harvest can only be done by hand; there is no mechanization. Chile has great potential because it is one of the few countries that can produce off season in the southern hemisphere for the large quantity of consumers of the northern hemisphere. Chile has an advantage over other countries like South Africa where there is cheap labor, but average temperatures are too high. New Zealand does not have enough suitable land for cherry production and Australia has water problems. Chile produces 2 percent of total world production but it meets almost 80 percent of the off-season demand.  

Weather has been bad during last winter, mainly because of a lack of cold days, hail and rain during the blossom period; as a result total cherry production in MY2012/2013 fell significantly when compared to both, our previous estimates and last year’s output. For MY2013/2014, as new planted areas are coming into production and weather has been more favorable for stone fruit during this winter months, a rather large production expansion is forecasted, although it is still too early for a good prediction. 

Trade: 

As for other stone fruit, the US is one of Chile’s most important fresh cherry export markets. As production expands in the coming years, industry expects to increase exports to the EU, Japan and mainly China. Since 2007 Chile exports its cherries duty free to the EU and the agreement with Japan will lower the current 8.5 percent duty in five years to zero. The agreement with China calls for a duty reduction in 3 years of the present 10 percent duty. Although cherries are exported from early November through February, over 90 percent are exported during the months of December and January of each year. 

As a result of a smaller production in volume and a large production area which was affected by off season rain which damaged some crops and cracked the fruit, exports in MY2012/2013 resulted a 30 percent smaller than the previous year. For next season an 80 percent expansion is expected in exports

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