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Chile
Report Team Narrative

Whilst this report strives to achieve a certain diplomatic decorum in its pursuit of industry improvement and giving credit where it’s due, the use of strong language from industry insiders – both from within and outside Chile - to describe the 2021-22 Chilean blueberry season cannot be ignored, including such terms as “catastrophe”, “disaster”, and “a call to action”.

Notwithstanding a heatwave in the first week of December in Chile’s Central Valley in regions such as Ñuble and Maule, followed by a few rain events in that month and January, conditions in the field were good - albeit with less-than-ideal labor availability - and most growers reported a good crop. In fact, the warm weather experienced throughout the country meant that growers in southern Chile were theoretically in a favourable position with harvests two weeks earlier than usual, which in a normal year would have helped reduce the late season overlap with early Mexican and Moroccan blueberries in the U.S. and Europe respectively.

But this was not a normal year. At the start of the campaign exporters were experiencing minor delays, but as time went on, the congestion in ports, quarantine arrangements for crewmembers on ships, longer stopovers and unloading delays all added up and started to intensify around December and into 2022, coinciding with the peak harvest. This shipping backlog meant that many of those growers who expected to be in-market 15 days early ended up with their fruit arriving 15 days late instead, with mixed quality because not all had sorted their pack-outs with such a long journey in mind.

It is extraordinary that Chile’s fresh blueberry export volume only declined by 9% under these circumstances, demonstrating that despite the fragmented nature of the industry and prevalence of older varieties, Chileans are adept at long-distance shipping in a way that would be a great struggle for other blueberry industries globally under the same level of pressure. However, the combination of delays and summer rains did take their toll on quality, weighing down returns and in some cases leading fruit to be either sent to processing or thrown out. Moreover, the delays disrupted retail programs, making it harder to organize promotional activity.

If Chile undergoes another season like this, contributors indicate that the financial strain on smaller growers could be enough to send many out of business, while those that remain could face greater scrutiny on quality from exporters who will be looking to restore the national reputation in the eyes of overseas buyers. It has also been reported that given a large push towards processing, even IQF operators in Chile itself have become more stringent due to the ample supply available from fresh blueberry growers hoping to avoid the headaches of a problematic logistical environment.

Against this backdrop it appears the trend of consolidation in Chile will continue, reinforced further by the advantage larger, vertically integrated exporters have in securing freight space. In 2021-22 some exporters experimented with bulk and break bulk shipping methods that used to be the norm until container shipping took over in recent decades. Chilean exporters of blueberries and other fruits had previously eschewed this method in favour of more flexible container shipping options, but against a volatile container export backdrop there has been renewed interest in regular, more direct shipments; a channel that brings with it new challenges in terms of how inspections are conducted on arrival and packaging arrangements for clients, but those who have tried the practice view it positively. The charting of boats and aircraft was not uncommon in the face of the challenges of this past season, and there are calls from within the Chilean fruit industry to establish services in the mold of the ‘cherry express’ that was set up for the Chinese market.

The Chilean blueberry industry has also adapted to the competitive pressures of recent years with greater plantings of organics, which now constitute more than 20% of the country’s planted area. Nonetheless, fresh organic blueberry exports from Chile took a sharper dive of 24% in 2021-22, attributable in part to improved pricing for frozen organic blueberries.

This is in stark contrast to a 32% rise in fresh organic blueberry exports from Chile in 2020-21, which was driven by the approval of a systems approach without fumigation for the U.S. market from the regions of Ñuble and BioBio, which account for almost a third of Chile’s organic plantings. It must also be noted that the systems approach regarding the Lobesia Botrana pest has also made life easier for conventional blueberry exporters, although for organics the effect is more pronounced as it is impossible to sell under the organic label if fruit is fumigated. Around three-quarters of fresh organic blueberries were shipped to the U.S., with most of the remainder exported to Europe.

In terms of markets, whilst Chilean blueberry exports declined 9% overall in 2021-22, volumes varied significantly by destination. As referred to in the country member report prepared by ASOEX, the USA had a decline of 14%, compared to Europe and Asia which saw declines of 3% and 2% respectively. It is worth clarifying the decline in Europe was attributable to a 26% reduction in shipments to the United Kingdom, in contrast to continental Europe where volumes actually rose by 4%. Even though exports to Asia were down overall, they were up in mainland China (+4%), South Korea (+2%) and Taiwan (+1%). The reduction in exports to the continent was mainly attributable to a 70% drop in emerging Asian markets due to the logistical challenges. Even in the United States, where port congestion in California has become synonymous with pandemic shipping problems, the decline was much more significant on the West Coast at -35% versus -6% on the East Coast.

With a dominance of varieties such as Legacy, Duke and Brigitta, it is estimated that around only 10% of Chile’s planted area is dedicated to newer-generation blueberry varieties, although the percentage is high in more sophisticated, larger farms. It could take 10 years or more for the country’s non-proprietary and/or older less competitive cultivars to be either out of circulation or purely dedicated to processing, but the country has top class soil and climatic conditions for growing blueberries generally, which translates to optimal flavor, firmness and appearance as well as uniquely high yield potential when advanced genetics are planted and managed well. The country’s challenges have not prevented some of the world’s leading breeders from introducing new genetics into the market. Exemplifying that trend is the recent decision by a leading nursery and genetics company to establish scaled wholly owned R&D and nursery operations to serve the Chilean industry.

There is a consensus in Chile that it has become increasingly harder to secure a local workforce and that younger demographics are less willing to do fruit picking than before. There is also greater competition with the cherry industry for workers, though the disruptions to cherry demand in China may change this dynamic. Laborers have returned from other South American countries such as Bolivia now that the borders are open again, but many do not hold the appropriate documentation to work legally in Chile and therefore are not available to more professional growers that have strict governance policies. With long transit times to market and other structural matters to consider, machine harvesting for fresh is also not perceived by most as a possible solution to this dilemma.

The business community, including the blueberry industry, is also awaiting the outcome of a national plebiscite on Sept. 4, 2022 regarding proposed changes to the constitution, which at the time of writing contained drafts that have some potential detrimental to impact agriculture but are too speculative for further comment at this stage.