Chile is the tenth global apple producer and the fifth in global fresh apple exports. Reports for this MY forecasts an increase of about 4% in production and exports due to favorable weather in winter and spring. However, heavy rains in producing regions at the end of January will affect the results negatively. The Royal Gala apples are the most produced and exported variety. Its average price for April 2021 is up by 31.8% in comparison to the same period last year due to lower availability, better quality, and an increase in labor costs. About the production trend, although there is a negative production trend of conventional apples, the Chilean organic exports show a positive trend for the last five years, with a growth of 36.8%.

Chile was the tenth in global apple production in 2019 and the fifth in fresh apple exports volume (HS 080810) in 2020. The main importing countries of Chilean apples were Colombia, the US, Ecuador, Saudi Arabia, and Brazil. The main exported varieties were the Royal Gala, Pinky lady, Granny Smith and Fuji respectively responsible for 48.4%, 15.6%, 12.6% and 9.4% of the exports share in 2020.

USDA forecasted YoY increases in production by 4.1% and in exports by 4.0% of commercially grown apples for MY2020/21 due to the satisfactory amount of rain during the winter and favorable weather during the spring. The Chilean apple harvest is between February and October, with chilled apples available up to November. Exports for this marketing year are about to enter their peak, which is usually between May and July. The average wholesale price of Royal Gala apple in April 2021 in comparison to the same period of the previous year, shows that the price is up by 31.8% for the Extra Fancy grade and up by 18.8% for the Choice grade.

According to Tridge’s Regional Manager in Chile, Jorge Neira, who has spoken to several major Royal Gala apple producers, he explains that there are three major reasons for the high prices this year:

The heavy summer rains that hit many fruit-producing areas at the end of this January, (see more here), also affected apple orchards, causing premature fruit drops. In some areas, the production volume is said to have decreased by 15 to 18% due to this event.

Higher quality fruits than last MY. The apples that remained in the tree even after the heavy rain ended up having a very good quality in terms of color and bigger sizes compared to last year. The cold winter benefited the red coloring and the humid summer helped in fruit growth.

Increase in labor costs. COVID-19 has hindered the employment of workers in the farms, limiting the available workforce. Moreover, apple orchards compete against cherry fields for labor, where cherry fields usually offer a better wage due to their higher profitability.

The rain damage in January might have a negative effect on the total production amount for this marketing year. However, the high quality of the fruits will increase international interest in the Chilean apples for this season, with possibly a higher export growth than expected with a good margin to the producers.

Chile: Apple export volume by month (in MT)

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Source: USDA

Competition with Cherries

The apple production in Chile faces a gradual drop in production over the years. According to Neira, this negative trend is due to competition with cherries for the fields. It is estimated that over 3,000 apple trees need to be replaced annually due to the aging process of the trees, which negatively affects the yield. Thus, instead of a new apple tree, cherry trees are being planted due to its higher profitability and faster returns of the crop.

Chilean organic apples

Although there is a negative production trend of conventional apples, the Chilean organic exports show a positive trend for the last five years, with a growth of 36.8% from 19 thousand MT in MY 2015/16 to 26 thousand MT in MY 2019/20.

The organic apple exports totaled 151 thousand MT in MY 2019/20. Chile is the second-largest exporter with 17% of total global exports of the sector in MY 2019/20, coming after the US which is responsible for 56% of total organic apple exports. This niche market is attracting the attention of conventional apple growers with aging trees, who are changing orchards to organic production. The niche apple production is expected to grow as a way to overcome the stagnation of the segment.



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