Chilean citrus exporters are likely to diversify their markets in the future, shifting focus away from the U.S. and onto places like Europe to fill the space left by South African growers. 

Fruit market consultant Decofrut told www.freshfruitportal.com South Africa was giving more attention to the U.S. market due to EU import restrictions due to citrus black spot (CBS).

"An important situation is what's happening in Europe with the South African production. As a result of these restrictions the EU has put on South Africa, two things will happen," Decofrut president Manuel Jose Alcaino said.

"Firstly, South Africans are going to try and compensate by sending more fruit to other markets like the U.S, and secondly, it is going to create a demand and dissatisfaction in the European market.

"You have to be very alert with what is happening in Europe with South Africa, because that can upset the citrus supply and demand balance completely."

Alcaino expressed concern Chile had become too reliant on the U.S. market, which he said received around 90% of Chilean orange, clementine and mandarin exports.

"There's a risk that they're putting all their eggs in one basket. And I think there is a responsibility to diversify their markets. The problem is the other main market, the EU, is already well covered by Argentina, Uruguay, Brazil, and partly by Australia," he said.

Early citrus variety producer Atunguayco also voiced its desire to reduce dependency on one sole destination, adding more work was needed to facilitate exports for some important emerging markets.

"I think there's always a need to diversify the markets a bit. I would like to get all the paperwork done to open up exports to Asia, to places like China where there is a huge population, and I think it is a market that we have to develop," said Atunguayco commercial manager Mathias Oteiza.

Oteiza added Chilean fruit was able to travel for up to 30 or 40 days and still arrive in good condition, so the time taken to cross the Pacific Ocean would not be an issue.

About 90% of Atunguayco's total production is made up of clementines whose harvest season runs from early May to mid-June. This means it faces little competition from South Africa which sends its biggest volumes in July.

Alcaino agreed Asia looked like a good region to focus on in the future, and echoed Oteiza's eagerness to work towards cutting the red tape.

"This is another option which we have to investigate - Korea, China - we have to work harder both on our protocols and to resolve the issue of the tariffs which are not well defined," Alcaino said.

"So there is still work related to the state or the Ministry of Foreign Affairs along with exporters and private companies. But I think that producers are comfortable where they are now."

Exportadora Crispagold president Pablo Osses said his citrus company was also going to seek new markets for some citrus varieties in the coming years, adding South Africa would likely play a key role in how everything pans out.

"The orange business is going to diversify in the future. Though it will depend a lot on how much of its production South Africa sends over to the United States, along with Australia. It will be a question of restoring balance to any changes," Osses said.

"We're going to have to wait and see what happens with the U.S. and obviously look into alternative markets like Europe, Latin America and the Far East."

Despite his desire to find alternative markets, Oteiza also said for now he was happy in the U.S. market due to the high prices the fruit was fetching.

"At the moment it is paying more, and we have a lot of experience there. We have experience in Europe too, but right now it is full of fruit from spring and doesn't pay what the United States does," Oteiza said.

Severe winter frosts in California, one of the U.S.'s largest citrus growing regions, led to producers in the state losing on average 30% of their total crops. The lower supply has led to attractive prices for Chilean exporters.

Alcaino said although this was good news for growers in one sense, there was a serious risk Chile's export volumes could be excessively high early in the season, meaning much lower prices for growers later on.

"The worrying thing is that now when we have high prices there is a strong tendency to send fruit sooner than normal when it isn't fully ripened or doesn't have the suitable internal quality," he said.

"This impacts negatively on demand and then when more volume arrives later in July, August and September, the higher prices will have worn off. The market will have deteriorated with poor quality products that were sent early to receive high prices.

"So what we have to do is to look after and maintain these high prices. We must take precautions and not send over bad quality fruit. There have been several other cases of when markets have started off well but too much fruit has been sent early and the market ended badly."

While last year's frosts in Chile and droughts in the some of the country's northern regions affected this season's production, total yield is said to have only slipped by around 10%.

Exportadora Crispagold reported that despite the climatic issues and lower production, fruit quality had fortunately remained largely unaffected.

"The clementines were generally a smaller size, but there weren't too many problems. Overall our quality was fairly normal. For oranges there was also a tendency to be a bit smaller," Osses said.

Osses added he had noticed growers attempting to minimize the damage of any future winter frosts by shifting their focus toward earlier citrus varieties harvested between April and June.

Oteiza also said he expected Chilean producers to move into earlier season production, but emphasized the weather would play a huge role in the citrus industry over the coming years.

"It all depends on the climate - the whole future of the industry is dependent on the climate," he said.

Undoubtedly, many of the world's top citrus-producing countries will be watching Chile closely to see if and how it moves its attention to other world markets.

The good phytosanitary conditions that result from the nation's geographical isolation between the Andes and Pacific Ocean, coupled with the fruits' ability to travel for a long time while retaining much of its quality, mean the potential market opportunities are vast for Chilean exporters.

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