President Obama’s plans to visit Brazil and Chile in March are bringing renewed media attention to the region, but South America has been seeing steadily increasing trade levels, especially with Asian nations, even while countries there have been laboring outside the global spotlight.
China replaced the U.S. as Brazil’s biggest trading partner in 2009, and since 2007 has been Chile’s biggest export market. The two Latin American nations have been negotiating trade agreements; Chile says it has more bilateral or multilateral trade agreements in place than any other nation in the world.
The trade gains are evident in the growing exports of farm and food products, from seafood, beef and poultry to a variety of fresh fruits and vegetables.
The volume of exported apples from countries in the Southern Hemisphere is expected to grow 8 percent in 2011 to reach 1.8 million metric tons, according to preliminary estimates from iQonsulting, a market consulting company based in Santiago, Chile.
The company expects export increases in all countries except Brazil, where it’s anticipated that strong local demand will keep the produce from foreign markets. Argentina could see an export increase of up to 21 percent, reaching 211,233 metric tons. Chile is expected to sell 4 percent more, with an apple export volume of 869,411 metric tons, iQonsulting said.
South American growers have kept a close eye on global trends and have successfully increased their market share in the hot “superfoods” category of produce.
The Chilean Blueberry Commission said blueberry exports are set to exceed last year’s level of 49,793 tons by more than 28 percent. The commission reports actual blueberry shipments to date are running nearly 4 percent ahead of earlier estimates, with 27,453 metric tons shipped through the middle of January. The U.S. is expected to receive about 82 percent of the current export crop.
Another global trend in high-value farm commodities is in organic produce, and Chile is making a concerted effort to gain market share in that sector as well, according to the U.S. Department of Agriculture.
The USDA report said the Chilean organic market totaled US$35 million last year with about 94 percent entering the export market.
“Chilean production of organic products is gaining momentum with apples, blueberries, onions, raspberries, blackberries, avocados, olives, rosehip and wine,” the USDA said. European markets were the main destination for the 14,587 metric tons of organic fresh fruits sold in the 2008-2009 crop year.
Ocean and air carriers are noticing the growth. CCNI, CMA CGM, Maersk Line and Hamburg Sud have introduced new services from South America in recent months, with more calls on both the east and west coasts.
“Maersk is coming back in with direct service to the west coast of South America that we hadn’t had for a few years,” according to William C. Duggan, vice president of reefer for Maersk North America. “We want to cater to the growth in the market, particularly with perishables.”
Although much of the demand is in transport seasonal products, Duggan said there is increased interest in the year-round banana trade.
“Grocery retail chains are looking to buy directly, a trend that has accelerated since last year,” Duggan said. That retail trend to cut out the middleman means more bananas are moving by container rather than specialized reefer vessels, he said.
Maersk may be known for its giant ships, but its string of vessels for the weekly service from Peru and Ecuador to the East Coast of the United States uses ships with about 2,000-TEU capacity because of draft restrictions at the Port of Guayaquil, Ecuador. Service from Chile is headed to Asia, but a Maersk terminal in Balboa, Panama, serves as a transload hub in both directions.
“What we have is a big effort to refocus efforts on good markets in South America where there is growing trade. And we are preparing ourselves for the canal expansion, because we think trade will increase even more from both coasts,” Duggan said.
Henrik Simon, Hamburg Sud’s director-reefer cargoes for the east coast of South America, said the overarching trend in South America is that the economic crisis is over and volumes are back to normal.
“We are back to volumes we had before August or September 2008,” Simon said. “After two very difficult years, we can see the return in all segments: poultry, meat and fresh fruits.”
Brazil is the busiest market by far on the east coast of South America, with poultry being shipped to Russia, the Mideast and Asia. Trade from Brazil to the U.S. is largely limited to fresh fruit, Simon said, with volumes of mangoes and grapes growing.
Virtually all reefer trade in the lane moves south to north. “There are some shipments of french fries from Central Europe to Brazil, along with clementines and kiwis and some American apples, but those are all in very small volumes.”
That imbalance means “90 percent of our containers are empty repositioned,” he said.
Unusual weather has meant the Chilean fruit shipping season started late, but shows typical volumes, according to Howard Posner, general manager for Seatrade USA, which operates specialized reefer vessels.
Chile’s citrus season hasn’t started yet, but produce in season includes stone fruit, grapes, avocados and apples, Posner said.
Seatrade is bucking an industry trend and has ordered four new breakbulk reefer vessels. The Atlantic Klipper, the second in the series, was scheduled to be christened Feb. 4 in Valparaiso and will be put into the fruit trade between Chile and Europe, Posner said.
He said market trends show Argentina and Peru are increasing their foreign sales of fresh fruits and vegetables, with Peru becoming an important player in citrus, avocado and asparagus trade. Growers in Argentina are seeking approval to sell lemons to the U.S. “If they get that, it will change the situation quite a bit,” Posner said.
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