Prunes magazine nº01 (english version)

Santiago de Chile - junio 2017

magazine

nยบ01

Numbers of the chilean global industry Chilean Shippings: rise in returns of 9,13%.

We continue to make progress in size and volume 2017 outlook for international prune markets

“Your add could be here”

info@chileprunes.cl

02

Editorial

A Forum for Sharing this Great Industry

A

s representatives of Chile’s prune industry, we belong to a vigorous agribusiness sector that’s growing day after day, an industry that will doubtless continue its dynamic growth given the recent discoveries regarding the nutritional and health benefits associated to this fruit.

It is precisely the notable drive shown by the sector on the global stage, as well as the leadership Chilean prunes have attained in terms of export volume and quality, that leads us to believe in our decision to launch this digital magazine, which we hope will generate content that can help our readers make their business decisions.

Through these pages we want to reach out to all of the audiences involved in the prune production chain all over the world: growers, machinery and input suppliers, entrepreneurs, exporters, importers, distributers/dealers and others.

Editorial Board Pedro Pablo Díaz Andrés Rodríguez María Paz Soto Christian von der Forst Jorge English General Publisher Christian von der Forst Edition and Design PuertoC Comunicaciones & Marketing.

A magazine of Chile Prunes Association AG.

In this forum, you’ll find opinions regarding the present and future of the industry, news about trade exchange, issues linked to agreements and conventions, annual statistics and perspectives on production volumes, pricing, exports and a series of comparative data to help you in your day-to-day business activities.

As a stakeholder within the Chilean fruit sector, we have been able to witness its many accomplishments and how the country proudly boasts its products in every continent on the globe, all thanks to an open economic policy best illustrated by the 26 Free Trade Agreements Chile has subscribed to. Today, it is a serious, driven industry that is proud of the contribution it makes towards the development of the country. This is the context prunes are currently in, and we wish to promote its growth through this magazine.

In this issue, we provide a snapshot of the world stage the prune industry is immersed in during the first half of 2017, taking a look at the different markets, including California, France and Argentina, not to mention Chile, of course. We will also discuss future events, export statistics, and other interesting topics.

So, without further ado, we invite you all to make the most of this communication channel; share it, make it your own and give us some feedback to help us improve every day.

Andrés Rodríguez Managing Director Chile Prunes

Chile Prunes Association, address Cruz del Sur 133 of. 703 Las Condes - Santiago - Chile (56 2) 24724783 - info@chileprunes.cl

03

Briefs Chilean Exports Improve in terms of Volume and Returns over the First Four Months of the Year

Amidst Low Global Stocks, Good Volume, Size and Quality in Chile.

The world is experiencing low stocks. Large sizes such as 50/60 and 30/40 have been selling increasingly fast since April and the United States should supply its domestic market first. France and Argentina faced low yields, while Chile produced more and better fruit, which will allow them to quickly sell their products over the next two months. “For the second half of the year, we expect the market to be stronger, and we also expect shipments to be 20% to 30% better than last year for the entire year”, said a Prunesco executive.

The Chilean prune industry expects to grow from 70.000 tons produced in 2016, to close to 80.000 this year, which would constitute a record for the industry and an increase greater than 14% from one year to the next.

If we compare the first quarter of 2016 versus the same period in 2017, we can already see a significantly positive trend in terms of volume and pricing. While the 2016 January to April period witnessed exports for 12.400 tons, adding up to $33.6 million dollars, this year, we moved up to 16.6 million tons worth $36.700 USD. This represents an annual increase of 34.12% in terms of volume and returns increasing by 9.13%.

In 2016, our fruit reached 77 different destinations (the same as in 2015).

Article in pages 6 to 9 Article in pages 10 to 11

Prune Trade Union Represents Entire Chilean Fruit Industry in “One Belt, One Road” Global Forum during Presidential Visit to Asia The top representative of the trade union that gathers the country’s prune processors and exporters, chairman Pedro Pablo Díaz, addressed the audience to discuss the outlook for the Chilean fruit industry during the “One Belt, One Road” global forum (also known as “the new silk road”), an event held in China that was attended by a series of businessmen and high-level dignitaries from different countries from around the world. It was one of the most important activities held during

04

President Bachelet’s Asian tour.

The fact that the Chilean fruit se c t o r – l e d by re n ow n e d executives Ronald Bown and Luis Schmidt – decided to trust and ask Pedro Pablo Díaz to lead the presentation not only shows just how skilled the professionals in charge of Chile’s prunes are, it is also proof that this industry has been doing things right for many years now. Check out the numbers unveiled during the presentation.

Article in pages 12 to 13

Briefs

Chilean Prunes at Passport DC Event For the second year in a row, Chile opened the doors of its official residence in the United States to thousands of families that descended upon Washington DC’s embassy row to take part in the traditional DC Passport Tour Around the World on Saturday, May 6th. This year, neither rain nor cold could keep these thousands of visitors away, many of whom waited for up to 90 minutes in lines that stretched up to five blocks just to gain access to the residence.

Along with 49 other embassies and residences from Latin America, Asia and Africa, Chile welcomed its guests with traditional folk music from the north, south and middle of the country, open access to all of the rooms inside the residence and a tasting session of Chilean products.

Prunes played a major role among the export-grade fruits. After all, the United States was our number one export destination in 2016.

Chile Lays Out Challenges at INC Congress A s they do ever y ye ar, the International Nut & Dried Fruit Council (INC) held their world congress. This time around, they chose Chennai, India, where José Tomás Quezada, the executive in charge of Pacific Nut’s dried fruits division, represented the Chilean prune industry by presenting his views on the evolution of production and consumption over the past few years, as well as laying out the industry’s greatest challenges.

During the conference devoted exclusively to this fruit, he pointed out that global consumption rates continue steady, mainly thanks to the growth of the world’s

population; yet, yields have had their ups and downs, due to weatherrelated issues affecting Argentina and the United States, leading to plummeting harvests. In addition, Mr. Quezada made a call to create more promotional campaigns emphasizing the many qualities that prunes have to counter the drop-off in global per capita consumption (from 40 to 30 kilos a year).

Expo Ciruelas Secas 2017! See You There!

It’s time to schedule a date for this year’s “Prune Expo” (Expo Ciruelas Secas): Wednesday, November 8th.

Since its first version in 2008, this has become a consolidated event, bringing together the prune industry’s entire production chain.

“We’re expecting over 300 people, including foreign visitors, industry representatives from Chile, growers, exporters, processors, suppliers and sector and government officials” said Andrés Rodríguez, executive director of Chile Prunes.

Given Chile’s importance on the world stage and the high level of interest shown by the industry, starting this year, the Prune Expo will become an annual event. We would like to extend an invitation for you to be part of this gathering as attendee or sponsor. We are putting together a number of different options that will provide you with a one-of-akind opportunity to connect with industry leaders and make your brand more visible. See you there!

More information in info@chileprunes.cl

05

2017 World Outlook for Prunes

Less Stock Around the World, and good Sizes and Volumes in Chile

International markets have experienced low stocks, which has boosted prune sales, especially larger sizes, which are becoming more and more scarce.

06

Cover Topic

T

he 2017 season has been bittersweet for prune producers and exporters around the world. If the weather was Chile’s agricultural sector’s best ally during the spring of 2016, much to the contrary, early rains, frosts and wind have decimated yields in the United States, France and Argentina.

In the United States, rain, frost and strong winds during pollinating season took their toll on plum orchards, cutting down production.

This meant going from 100,000 tons a year down to only 41,000, a 57% drop compared to the previous season.

The French didn’t fare much better.

They suffered major frosts that not only affected prunes, but their vineyards as well.

Argentina – specifically, the southern region of Mendoza – also had to

battle frosts during the spring, right in the middle of the flowering period, affecting harvests and only adding up to 13,000 tons, a 69% drop compared to last season. Although, the losses registered in California added value to the product, leading the state to add 10,000 tons to their export volume that were left over from the previous season.

The Flipside of the Coin While all of this was happening to some of the world’s greatest producers, Chile recorded one of its best ever seasons for prunes.

“Favorable weather conditions, along with a production culture that focuses more and more on quality, allowed Chile to enjoy excellent prunes this year. Prunes with a fine appearance, good size and good sugar levels”, said executive director of Chile Prunes, Andrés Rodríguez.

“We expect the market to be much stronger during the second half of the year, and we also expect shipments for the entire year to be 20% to 30% more than last year (in Chile)” Pedro Monti, Prunesco

When we talk about a production culture – according to the director’s remarks – we are referring to improvements in the use of

Bittersweet have been last season for the prunes producers and where weather factors played against in many countries.

07

Cover Topic

irrigation, the mechanization of certain tasks, good nutrition and knowledge regarding production potential, all of which is achieved, for example, with proper pruning to allow the right lighting and distribution of the fruit.

Fruit size has shown interesting improvement. While the average Chilean caliber in 2016 was 88, this year it’s been 75. Likewise, smaller fruit (size 80 and below) represented 47% of the total yield in 2016, a number that dropped to 41% this period, added Rodríguez.

Pedro Monti, Sales Manager for Prunesco points out that Chile “has become an important and validated source for the mid-sized to large prune market, leading to a rise in demand for this fruit, which in turn dropped the levels of carry-in stock for these sizes to practically 0. In the past, Chile was only recognized as a small fruit supplier, today on the other hand, mid-sized to large fruit sales have become a major sales component”.

Chile is the world’s number one prune exporter, with $200 million US dollars in sales, and is also the main

producer of this fruit, thanks to over 70,000 tons produced during the last period. This year, we are expecting numbers between 75,000 to 80,000 tons.

Growers need to understand just how vulnerable they are to the over-supply of small fruit, and, they have to understand how to mitigate their risk and maximize their returns by becoming producers of high value fruit. (Joe Turkovich) Joe Turkovich

California Dried Plum Board

(IPA Conference, nov. 2016, Chile) Harvest and Price Estimates The world is experiencing low stocks. Large sizes such as 50/60 and 30/40 have been selling increasingly fast since April and the United States should supply its domestic market first. France and Argentina faced low yields, while Chile produced more and better fruit, which will allow them to quickly sell their products over the next two months. “For the second half of the year, we expect the market to be stronger, and we also expect shipments to be 20% to 30% better than last year for the entire year” said a Prunesco executive.

Regarding prices for mid-sized to large fruit, the same executive states that levels have remained high, with only slight increases during the year, “although we are already starting to feel a shortage in certain sizes, such as 40/50, which could lead to a price increase over the next few weeks. In terms of small-sized fruit, prices have stayed low and highly competitive”.

Joe Turkovich, producer and chairman of the California Dried Plum Board said: “one thing is certain, growers need to understand just how vulnerable they are to the

08

Cover Topic

over-supply of small fruit, and, they have to understand how to mitigate their risk and maximize their returns by becoming producers of high value fruit� at IPA Conference in Chile, 2016.

Chile has earned standing as global provider of middle and big prune, helping to impulse the global demand of this fruit.

“Growers and processors cannot blindly insist upon a strategy that strives to maximize production at the expense of quality, because small fruit quickly surpasses the limited global demand that exists in the market . Prices drop dramatically, creating a domino effect that drags prices down for all sizes. Industry processors need to provide incentives to producers to rewards them for larger sizes�, added the chairman

09

Analisys

First Quarter 2017

Chilean Prune Worldwide Exports Increase in Volume and Returns

T

he Chilean prune industry expects to grow from 70.000 tons produced in 2016, to close to 80.000 this year, which would constitute a record for the industry and an increase greater than 14% from one year to the next.

If we compare the first quarter of 2016 versus the same period in 2017, we can already see a significantly positive trend in terms of volume and pricing. While the 2016 January to April period witnessed exports for 12.400 tons, adding up to $33.6 million dollars (Fob), this year, we moved up to 16.600 tons worth $36.7 million USD. This represents an annual increase of 34.12% in terms of volume and returns increasing by 9.13%.

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prices could rise over the rest of the year, especially for medium to large sizes, of which there is currently a shortage on the market.

In 2016, our prune reached 77 different destinations (the same as in 2015), while ten years ago it only reached 59 countries.

This percentage increase in returns is very significant considering there was only a 0.62% increase when comparing the first quarter of 2015 versus 2016.

Import Increase

Nevertheless, there is work to be done in order to improve the average price of prunes in the world’s different markets. Prices experienced a slight drop from 2.25 to 2.21 dollars a kilo. However, the curb should soon display an upward pricing trend. If we also factor in the drop-off in production of two of the world’s major suppliers (California and Argentina) and the lack of stock in destination markets, international

Regarding the destination countries for our fruit, one can’t help but be surprised to see the United States in the number one spot in 2016, especially considering that they hadn’t even cracked the top ten over the past four years. Another interesting point is the distance between first and second place in terms of exported volume and revenue: Chile’s shipments to the United States add up

Analisys

First Quarter Each Year YEAR

UNIT

VOLUMEN

ANNUAL VARIATION

FOB IN U$

ANNUAL VAR. 2

2017

Kgr.Net

16.647.100,00

34,12%

36.749.500,00

9,13%

2016

Kgr.Net

12.411.670,00

35,58%

33.675.707,00

0,62%

2015

Kgr.Net

9.154.242,00

ND

33.469.455,00

ND

to 10.800 tons and 19.2 million dollars, while Mexico, number two on the list, received 6.500 tons of our fruit for 13.2 million dollars in revenue.

Along with Mexico, the United Kingdom, Poland, Russia, Italy, Germany and Spain usually round up the top ten destinations for our prunes. Although the most important prune importers have kept their purchasing

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levels fairly steady – except for the explosive growth seen in the United States – quite on the contrary, Russia has displayed a much more erratic behavior, with significant decreases ever since 2013.

In 2016, our fruit reached 77 different destinations (the same as in 2015), while ten years ago it only reached 59 countries

In the world

“One Belt, One Road” Global Forum

Outstanding Presentation on Chilean Fruit from Top Prune Trade Union Representative during presidential trip to Asia

A

s part of President Bachelet’s visit to Asia, the top representative of the trade union that gathers the country’s prune processors and exporters, chairman Pedro Pablo Díaz, addressed the audience to discuss the outlook for the Chilean fruit industry during the “One Belt, One Road” global forum (OBOR, also known as “the new silk road”), an event held in China that was attended by a series of businessmen and high-level dignitaries from different countries from around the world.

The fact that the Chilean fruit sector – led by renowned executives Ronald Bown and Luis Schmidt – decided to trust and ask Pedro Pablo Díaz to lead the presentation, it is a proof that this industry has been doing things right for many years now.

On the occasion, the executive highlighted what Chile represents in the fruit market. “Chile exports over 60 billion dollars a year in a variety of products, 16 billion of which come from the food sector. We mustn’t forget the fresh fruit sub-sectors, which contribute over 5 billion dollars; the salmon industry, with over $3.5 billion and wine, worth $1.5 billion. But now I’d like to pause and highlight the nuts and dried fruit industry, which has also broken the 1 billion dollar barrier in exports. This is a huge number for our country, a number that is tremendously important and implies a tremendous public and private responsibility”

012

Pedro Pablo Díaz with Chile’s President of the Republic, Michelle Bachelet.

Domination in the Southern Hemisphere Pedro Pablo Díaz highlighted the fact that Chile is the number one exporter of fruit in the southern hemisphere and the number one world exporter of table grapes, blueberries, cherries and prunes.

“We are a highly organized industry, with several associations of exporters and producers, which not only helps improve our competitive position, but also helps generate knowledge for our authorities in terms of just how important we are for the development of the nation. Chile’s economic engine is the forestry, agriculture and livestock industries. The Chilean

In the world

countryside lives and breathes the deepest roots of our traditions”, emphasized the Chile Prunes chairman.

He also pointed out our most impor t ant markets: “Mexico and Eastern and Central Europe have historically been our main destinations, while China is growing by double digits year after year.

The advances Chilean prunes have achieved in this last country have been ama zing ever since authorization was obtained in 2010 for “tenderized” prunes, meaning, prunes as a finished product.

Although, we still had to fight for shipments in “natural condition”, dried, but not tenderized – the version China imports the most –, which are used as a raw material in their processes, something China finally authorized in 2016

Chile is world lider in table grapes, blueberry, cherries and dehidrated prunes shippings.

013

www.chileprunes.cl

Publirreportaje

The Business Model that Gives Ashlock Company Machines a Competitive Edge The Chilean prune industry has chosen these quality, easy-to-use solutions thanks to their superior service and the post-sale and support that come with its representative, Southern Solutions.

A

shlock Company machinery is not for sale. It is leased or rented in order to constantly develop improvements that are free of charge for their customers. These rentals are granted with full service included, which involves regular visits and 24/7 service in case of emergencies.

This is one of the main competitive advantages this industry-leading, American company has to offer. They have been making a contribution to agribusiness processes all over the world for over 70 years, specifically through machines for pit ting, de-stoning and deseeding prunes, cherries, dates and olives, be it in the United States, Europe, the Middle East or Chile.

“When you purchase machinery, many times it is rendered obsolete in a matter of years, while with Ashlock’s business structure, which is focused on leasing and rentals, and supported by a permanent stock of spare parts and highly trained staff, we can respond to the market’s requirements”, says Héctor Claro, General Manager at Southern Solutions, the company that represents Ashlock in Chile.

In Chile, this machinery supplier company has 45 clients, mainly processing plants – including 70% of the prune industry and 60% of the cherry industry – and it is represented

by Southern Solutions, a company whose staff doubles as technical service professionals, visiting plants every week, allowing them to stand out from the competition.

“We are constantly incorporating new developments, technology and applications to Ashlock machines.

And with each improvement, we also build-in codes to know what stage the machine is in”, adds Claro.

In addition, this equipment is assembled and designed above and beyond industry standards and their ease-of-use is one of their most important traits.

2017 Forecast The company has not stopped growing in Chile. In terms of cherries, 2016 witnessed a 16% growth of machines placed in the market compared to 2015, and this year, the increase is projected to be around 10%. When it comes to machinery for prunes, there was a 4% growth between 2016

In Chile, this machinerysupplier company has 45 clients, mainly processing plants.

and 2015, and a similar percentage is expected for 2017. In total, between prunes and cherries, 186 machines where placed into the market last period.

Finally, Héctor Claro emphasizes that the most important thing for the company is listening to the complaints and concerns of their customers when it comes time to purchase machinery.

Many times, clients do not know how long they’ll remain operational. If they break down, they can put a halt to an entire production line, something that must always be avoided at all costs

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Sector numbers

Chilean Prune Worldwide Export Between 2015 and 2016, Chilean prune exports increased in volume by 9.06%.

YEAR

UNIT

VOLUME

ANNUAL VARIATION FOB IN U$

ANNUAL VAR.2 MID. PRICE

2017*

Kgr.Net

16.647.100,00

2016

Kgr.Net

70.104.829,94

9,06%

157.948.818,50

-21,2%

2,25

2015

Kgr.Net

64.278.564,14

-0,31%

200.336.443,15

-14,1%

3,12

2014

Kgr.Net

64.478.292,93

2,86%

233.350.663,38

54,5%

3,62

2013

Kgr.Net

62.684.098,89

-18,73%

150.991.753,27

5,97%

2,41

2012

Kgr.Net

77.131.926,87

142.481.542,38

1,85

2006

Kgr.Net

42.052.782,12

94.329.966,89

2,24

36.749.500,00

2,21

*TO APRIL (SOURCE: ODEPA)

First quarter of every year Exports January-April.

YEAR

UNIT

VOLUME

ANNUAL VARIATION

FOB IN U$

ANNUAL VAR.2 MID. PRICE

2017

Kgr.Net

16.647.100,00

34,12%

36.749.500,00

9,13%

2016

Kgr.Net

12.411.670,00

35,58%

33.675.707,00

0,62%

2015

Kgr.Net

9.154.242,00

2,21 2,25

33.469.455,00

3,12

So far this 2017 year (january to april) Chilean Prunes exportings shows a volume 34% higher than same period on 2016.

TO APRIL (SOURCE: ODEPA)

Map – concentration of prune exports per country in terms of value List of importing countries for the selected product in 2016 Gloss: 081320 Prunes, dry

> 24.771

SOURCE: TRADE MAP

016

9.908 - 24.771

4.954 - 9.908

2.477 - 4.954

Breaking News

495 - 2.477

0 - 495

N.A.

*Imported Value. Miles of USD

According to the Agricultural Studies and Policies Office (ODEPA, Oficina de Estudios y Políticas Agrarias), part of the Ministry of Agriculture, up to the third week of May, Chilean exports added up to 23.000 tons, a number that was only reached in late June in 2016. The main export destinations to date are the United States of America (5.900 TONS), the United Kingdom (1.990 TONS), Russia (1.600 TONS), Mexico (1.680 TONS), Poland (1.170 TONS), Italy (1.160 TONS) and Germany (1.160 TONS).

Sector numbers

Destinations Ranking

Number of destination countries for chilean exports 72 59

59

74

69

66

61

77

75

2016

77

N°

73

Description Volume

FOB in US$

1

USA

10.790.765,54

19.171.875,17

3

Mexico

6.503.655,00

13.201.944,73

2

U. Kingdom

5.980.358,00

15.488.940,88

5

Poland

4.947.930,00

11.086.134,51

4

Italy

4.200.896,00

11.777.224,66

8

Russia

3.657.120,00

8.206.510,72

7

Germany

3.583.511,00

8.969.937,49

6

Spain

3.410.806,00

10.818.863,39

9

Netherland

1.683.150,00

4.603.491,17

10

Australia

1.584.840,00

4.510.684,55

2015 N°

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

In ten years Chile came from 59 to 77 destination countries in 2016.

Evolution of the volume imported by the world’s major prune importers. (TON)

Description Volume

FOB in US$

1

Mexico

9.197.919,00

25.677.111,66

3

USA

8.938.829,44

24.454.420,98

2

Poland

4.926.390,00

14.839.679,91

5

U. Kingdom

4.562.494,00

15.254.920,82

4

Germany

4.393.460,00

15.669.392,22

8

Russia

4.380.396,00

13.249.530,66

7

Spain

3.700.910,00

13.249.239,18

6

Italy

3.687.430,00

13.314.238,95

9

Australia

1.419.265,00

4.900.197,83

10

Venezuela

1.320.000,00

5.114.046,04

40000

2012

35000

N°

30000 EEUU Federación Rusa

25000

Alemania Brasil

20000

Italia Reino Unido

15000

México Japón

10000

España Polonia

5000

2016

2015

2014

2013

2012

2011

2010

2009

0

Description

Volume

FOB in US$

1

Russia

17.363.203,00

33.283.418,68

3

Mexico

8.204.610,00

13.091.701,98

2

Poland

5.933.515,00

10.871.875,31

5

Germany

5.445.067,50

11.301.756,59

4

Brazil

4.791.741,35

6.509.120,58

8

Italy

3.896.180,00

8.011.353,68

7

U. Kingdom

3.097.015,00

5.861.188,35

6

Spain

2.951.325,00

5.144.896,11

9

Argentina

1.831.020,00

1.684.632,20

10

Lithuania

1.686.140,00

3.035.953,61

017

We invite you soon to read our edition Nยบ 2 and if you want to contribute with topics or to advertise, write us to info@chileprunes.cl

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23-06-17

15:32

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