We are in week 3 of the year, and the Chinese New Year is approaching. This year, it will fall on Wednesday, January 29. Chilean cherries have become a symbol of the celebration and are recognized as an excellent gift for the occasion. However, Manuel Alcaino, president of Decofrut, told Freshfruitportal.com that 85% more fruit has been sent to China than last year, affecting prices. 

“Not all the volume has arrived yet,” he said, “but the Chinese know that the fruit is going by ship.”

He added that on the same date last year, the industry sent 58 million boxes, “and today we have sent 111 million."

“An important point is that this year, the Chinese New Year is earlier, and in 2024, volumes were generally rushed and advanced to arrive before the holiday.”

In this context, he explained, “All this has translated into lower prices. The fruit, in general, has arrived reasonably well, and today, the last volumes of Santina are being sold, which is the early variety that had an increase of 125% more than last year.”

Alcaino clearly said that it is unfair to compare it with 2024 because it was a year more affected in volume. “Despite this, it shows that there has been much more early fruit than 2024, and prices have been 30 to 60% lower than last year.”

Chilean cherry strategy

As markets usually work, the greater the supply, the lower the prices, which is now a reality in the Chinese market with the arrival of significant volumes of Chilean cherries.

The president of Decofrut pointed out that the smaller sizes are not yielding the returns needed to cover the costs, so the business needs to be rethought.

“The strategic thing is to cut the shipment of small sizes to China, such as XL, which can no longer continue to be exported,” he said.

He added that it is crucial to consider the prices obtained in alternative markets, which are becoming attractive today. This was an unusual reality before because prices in China were so attractive. Exporters were not interested in looking at other markets that paid good prices because they covered more than the cost of production and still generated profits.

Chinese New Year

Alcaino specified that two factors not good for price effects this year came together. “On the one hand, the early Chinese New Year, which makes everything rush to arrive before the celebration, means less time to sell, and the fruit is concentrated in these weeks.”

Chinese New Year is week 5, on a Wednesday, “then you have to arrive on week 4 to have time to land and distribute the fruit. Then week 3 and 4 will be the weeks with the highest arrivals. After the celebration comes a very strong volume of fruit, with a history of very low prices,” said the president of Decofrut.

He added that the Chinese festivity increased the productive capacity. “I believe that we will not finally reach 130 million boxes; we will be over 100 million boxes, but closer to 120 million.”

He said, “This season, these two elements came together to complicate the situation, but this does not mean that this has forever derailed the cherry business in Chile; on the contrary.”

He added that if the Chinese New Year were later, Chile would be in a very different situation with the same volume.

Despite a particular economic scenario, Alcaino valued the work that Chile is doing in terms of reaching new ports and diversifying the arrival of the fruit. “The promotional work that Frutas de Chile has done to take out the concept of Chinese New Year, but a broader view, because we have early and late fruits, so we must be attentive to how the market develops after the holiday.”

He added his belief that prices will not return to their current levels since “they were crazy, but this will also make it attractive to send to other destinations.”

Chilean cherry business

Alcaino continued the analysis of the cherry business, specifying that the southern hemisphere makes it a particular, unique business. Chile has not taken care of it properly due to the tremendous temptation of sending fruit to the Chinese market, where the prices were double or triple what could be obtained in alternative markets. “Now, we have to start taking care of the business."

Regarding alternative markets, he explained that North America consumes between 50 and 60 million boxes of its fruit during the season at prices that generate a positive return for growers.

“If we do a good job, we can place between 15 to 20 million boxes in the North American market, not from one day to the next, because it is slow. This year, I estimate that we will ship 5,000 million boxes, with reasonable return prices, which will generate a profit regarding production costs.”

He commented that the market consumes 120 million boxes of local fruit in Europe. “So, we are not talking about an unknown product; it is a deeply rooted fruit at a different time. And that is what we have to work on. We can do that, but it is a slow job.”

He pointed out that many American chains stopped importing Chilean fruit “because they did not meet the volumes, because the Chinese arrived and paid crazy prices.”

Projection

Alcaino said the industry will grow again in volume next year, “so we must send to China the fruit that has good results, such as the super Jumbo and the extras.”

Similarly, the sector's strategy must include developing business in the United States and Europe. "The latter market is complicated because ship transits take up to 32 days, so it has 10 days less shelf life. To China, it takes 20 days,” explained Alcaino.

There are still weeks of cherry exports, so the president of Decofrut points out that “we have to sit down and analyze the season, what was done, what was not done, and what could be done. I believe that China could still develop more in domestic markets, and it is being done.”

He added that all exporters are rethinking what they will do if they slow down plantings. “I think we should stop a bit because last year we were going crazy; you couldn't plant because you had run out of plants.”

In Alcaino's view, the 2024-2025 season “will be a pivotal time to rethink what we are doing and consider alternative markets viable alternatives. The markets that are interesting in volume are the United States, and Latin America is an interesting alternative.”