The first Chilean cherries of the current season arrived in China by air in mid-November, at which time preparations were being made for the first maritime shipment of cherries to the Asian giant, which has just arrived at its destination.
The first ship of cherries from Chile was received with great expectation in China. It began its journey in mid-November from the South Pacific Terminal of the Port of Valparaíso, through the “Cherry express” service. The arrival of the 60 containers of cherries marks, as every campaign, an important milestone, especially in the midst of a complex scenario due to the pandemic and the consequences it has brought for maritime transport.
Delays at ports, a product of logistics itself, have generated a greater demand for air shipments, however, in this aspect the first complications also arise due to high demand.
“Within internal logistics we have a problem in our ports, the swells have been much more intense recently and there are times when ships cannot dock and this delays the loading of vessels, so we have to be very attentive to this; the demand for air transport has also increased and, today, for both cherries and blueberries, air transport is not enough; in fact, up until week 49 we still had prices that paid for air transport of cherries, but we do not know how long it will last, or how much we have available for this transport,” he explained. Isabel Quiroz, Founder and Director of IQonsulting.
In China, they are already thinking about charter planes that would allow for increased air transport, an idea that is currently under discussion, but is gaining strength considering also the problems of external logistics; ships with fruit arrive at their destination, but cannot always be unloaded in the optimal and/or established times.
“Ships arrive, but cannot be unloaded; there are delays in China, on November 30th an even longer delay was reported, because the ships could not establish communication with the port control centers, since on November 1st an information security law came into effect and that causes transmissions from the ships to be disconnected, therefore making coordination much more difficult and that increases the delay in unloading ships due to the lack of coordination,” Quiroz explained.
This situation is being analyzed by the Chilean authorities and exporters' associations, with the aim of requesting a solution in this regard.
Despite all the logistical complications of the season, the prices of Chilean cherries in China, the main international market, have been quite attractive, as confirmed by Isabel Quiroz, Founder and Director of IQonsulting: “We started with prices of around 50 dollars per kilo, the selling price in Guangzhou, and that was a similar price or a little higher than in previous seasons. In the second week it went down, I am talking about average prices for all varieties, and prices have remained around 24 dollars per kilo for the last three weeks, that is a very attractive price, but it is an average price. The highest can reach 30 and the lowest 15 dollars per kilo.”
Until week 48, all cherries sold in China had been transported by air, which changed with the recent arrival of 60 containers by sea shipment.
“Everyone was waiting to see how the quality of the fruit transported by boat would be and also to see how the price adjustment would be when this first boat arrived in Guangzhou. Normally, when the first boat arrives, prices drop and are around 15-20, maximum 25 dollars per kilo and then they continue to drop, because the lowest average price is around 10 dollars per kilo.” the specialist explained.
Despite the adjustments, a slight rise in prices is expected before Christmas. Although the Chinese are not tied to the Christian world, there is a significant part of the population that celebrates these holidays for other purposes, and that increases the demand for cherries before December 25. Added to this is the current condition of the food markets in that country, another factor that has benefited the price of Chilean cherries in the current campaign.
“We are also being positively affected by the general rise in food prices in China and, therefore, we should expect that if everything goes well, if we do not have interruptions due to viruses, that many packing plants or many producers close down, to date nothing has happened, or that there is something with Covid, rumors, you know anything can happen in China, we could have one of the most attractive seasons in terms of prices, obviously helped by the higher prices for all foods in China, but also by the quality of our fruit,” Quiroz projected.
In week 48, our country shipped 8,479 tons of cherries to different markets, 62 percent less than last season in the same week. Of these, 5,026 were destined for China, equivalent to 59.3 percent of the total, as opposed to last season, which was 921 TP3T. This is explained by the intention to diversify markets.
“Until last year, 94 percent of our exports went to China and only 6 percent went to other markets, and that has caused us problems when Covid disruptions occurred in the Chinese market. Therefore, as a definitive way of saying 'we cannot continue to depend on China', both exporters and the Asoex Cherry Committee are pushing to improve the position of our cherries in other markets, and particularly in the US, where a promotional campaign is being carried out for the first time, because before it was always concentrated on the Chinese market.” said Isabel Quiroz, Founder and Director of IQonsulting.
The United States is currently the second most important market for Chile in terms of cherry exports. During week 48, the country received 9.31 TP3T of the total exported, Brazil and Korea 71 TP3T and England 41 TP3T. However, in North America there are also logistical problems in the ports, mainly on the West Coast, so Chile is avoiding sending maritime shipments to that sector, prioritizing the East Coast, which to date has not presented major problems.
Average prices in the US at the importer level are currently 11.8 USD/Kg for Royal Dawn and Brooks, while the rest of the varieties averaged 13.76 USD/Kg (prices reported in 5-kilo boxes).
By week 48, our country had exported 21,600 tons of fresh cherries to different markets, 32 percent less than last season at the same date.
