Brazilian consulting and processing company Agropar has historically been involved with mango and grape projects, but its main focus at the moment is the country's growing litchi industry. Despite competition with low-cost processed Chinese litchis at home and South African fresh exports in Europe, the company has penned a deal with four Brazilian producers to find commercial opportunities domestically and abroad. Agropar owner André Briso tells www.freshfruitportal.com about a São Paulo processing plant in the works, and the country's varietal advantage.

Briso estimates Brazil's current litchi production at 5,000 metric tons (MT) each year, with his clients accounting for 10%. However, with young trees building up to full production, he expects the national annual figure to double to 10,000MT over the next two years.

Agropar's clients - in Brasilia, Minas Gerais and São Paulo - will make up 2,000MT of that amount.

He says the growing volume will be difficult to commercialize, which is why Agropar is making steps right now to find alternatives and opportunities.

"For example, the Chinese can deliver pulp here, with all the transport costs and everything, for exactly the same cost that we have; so we need to be able to squeeze costs we can compete with the Chinese locally, and that’s the idea behind what we’re doing with this project.

"We will have to reduce grower remuneration for the fruit and increase efficiency."

He says client deals for processed lychees will be sealed up by July next year and the 3,000sqm plant built before the season starts in November. Only 10% of Brazil's litchi production goes to processing at the moment, but in two years time Briso thinks this could jump to 40%, with Agropar processing 1,000MT of litchi pulp annually.

"We would have liked to be able to go to Europe with the processed fruit, and I was in contact with three companies in the Netherlands who were interested in the fruit, but they were still looking for the same price as the Chinese. For that reason we will look to competing with the Chinese locally here in Brazil."

Comparative advantage

Briso describes processed Chinese litchi pulp as "tasting like water" with lower sugar levels at around 17 brix. He says South African growers, who also have faced difficulties from low-cost Chinese fruit, produce a slightly better quality product, but still with brix rates between 17-18.

"When we have our fresh litchis the Asian production is finished and we compete with South Africa and Madagascar, although the Madagascan fruit quality is not very good. Competition is mainly with South Africa.

"The variety we have in Brazil though, the Bengal, is very different to what they produce in South Africa and Madagascar; our variety not as big as theirs, but the brix is higher at a level between 22-23.

"That will be our advantage in the European market, despite the smaller size fruit."

He hopes to sign export deals to France, the Netherlands and the U.K., with the fresh export share of Brazil's litchi production to rise from 5% now to 30% in two years. This equates to a 50-50 split between local and overseas markets for the fresh fruit.

"The local market in Brazil for fresh fruit is growing. In fact there are many more companies now that import more than they export, whether its apples from Chile and Argentina, or plums from Spain.

"The exchange rate at the moment in Brazil is very favorable for importers; it’s a bit better now at BRL1.99 to US$1, but last week it was BRL1.60, which makes it very difficult to export.

"In the end the ability to commercialize processed fruit will depend on the exchange rate."

Related stories: Exotic fruit from the Philippines could be on U.S. shelves

Vietnam to take chunk of U.S. exotic fruit market

SA litchi growers upbeat after U.S. approval

U.S. West Coast in sight for Aussie litchi growers

www.freshfruitportal.com