The commercial success of Chilean cherries has had an unexpected beneficiary: the D’Agen plum grown in the country. This is what Cristián Tagle, commercial manager of the exporter Garces Fruit, the largest exporter of cherries in the country and which has also embarked strongly on plums. “What has helped us the most is the recognition we have thanks to cherries in China: we are known, which has helped to position D’Agen as a quality fruit,” he said.
The executive thus presented the important progress that shipments of the also known as European plum to China have had during the Expo Dried Plums 2023, a meeting that brought together more than 200 people at the Monticello Hotel in the O’Higgins Region. “It is a unique variety of plum: it is sweet and low in acidity, which Asians like a lot,” he says. “Chile ranks as the leading exporter of this fruit in the southern hemisphere: more than 80% comes from our country.”
Tagle noted that Chile exported 53,500 tons of D’Agen plums in the 2022-2023 season, with 80% of it going to China. The figure is a 10.5% increase over shipments in the 2018-2019 season (48,613 tons), prior to the drop implied by the covid pandemic.
Tagle, who also serves as President of the Cherry Committee of the Chilean Fruit Exporters Association (Asoex) said, “We as Garces have witnessed how the industry has changed: since the 2018-2019 season that exports of D’Agen plums have been on the rise. At that time, shipments reached 48,613 tons, mainly directed to China. However, due to the Covid-19 pandemic and China’s restrictions, shipments dropped in 2019-2020 to 28,943 tons and 27,179 tons in 2020-2021.”
“We are still shipping, but there was a reduction. This changed, in the last two years, when we exceeded 50,000 tons. In the 2022-2023 campaign we reached 53,500 tons of shipments. In the case of planted hectares, they have remained stable between 11,000 and 12,000. In the 2022-2023 season, we reached 12,530 hectares planted. The volumes are clear. They are record volumes,” says Tagle.
Despite the strengths, the industry’s main challenge is to improve quality, which is unstable during harvest. “At the beginning, the fruit is a little greener, which impairs the flavor. In the middle of the season there is a little bit of everything and in the final period we have problems of browning, soft fruit, which the Chinese do not like, so prices and movement in the market go down. Therefore, we have to improve the quality and consistency of the fruit. We have a high quality product, but we need to improve it.”
Another key issue is shipping delays. Unlike cherries, which have three, four ships leaving per week to China. Fresh plums only have one, which causes the volume of fruit to be concentrated on that ship to get to market sooner.
“If that ship is delayed, what has happened to us. It creates problems for us with the fruit. These are issues we have pending. But the main thing is to guarantee and maintain quality. When we talk about quality, it means flavor and firmness. Chinese people want a sweet, juicy, firm and crunchy product. And with a maritime transit that does not take more than 24 days”, says Cristián Tagle, commercial manager of Garces Fruit.
CHINA: DOMESTIC PRODUCTION ON THE RISE
If the production and exports of these fresh plums have been increasing in Chile, China’s production is reaching volume levels that Tagle describes as “impressive”. “If we add local Chinese production plus imports, we will reach 390,000 tons in 2022, which is an impressive growth,” he says.
“The Chinese are looking to reach 2,300,000 tons in the next five years. There is an expected growth in hectares of 56% per year. We are talking about 20,000 hectares that are already planted. The volumes expected for the season are tremendous. They have a window, a little bit longer, that goes from July to September. And that takes place in the province of Jiangxi, the main producing province of this fruit in China, which is located in the southeast of the country. There is a lot of doubt as to whether the market will be able to withstand it, but China seems to withstand everything,” says Tagle.
“In 2021, the market was already US$810 million in size. Therefore, by 2026, domestic production is projected to reach 1,500,000 tons. The local volume of local production will multiply 7 to 8 times in 5 years. That is impressive,” says Tagle.
MARKETS
As for the consumption of D’Agen plums between 2017 and 2021, consumption grew from 80,000 tons to 275,000 tons, equivalent to an average of 36% per year. Thus, the share of fresh consumption stands at 69.9%, while dry is 25.7% and the juice industry is only 4.7%.
In the 2021-2022 season, China’s domestic production reached 189,000 tons (74%) and imports totaled 65,000 (26%). Chile leads imports to the Asian country. In 2021, these reached 80.50% (52,325 tons). Followed by Australia with 10.50% (6,825 tons); USA with 8.10% (5,265 tons) and Spain with 0.90% (585 tons).
Tagle comments: “It is very similar to what happens with cherries, where 90% is destined. But here it is 80%. I understand that Australia, USA and Spain are not growing. Therefore, the opportunities are there for Chile. The potential clearly exists.
Last season, Tagle explains, “In the 2J caliber, the price per box was 175 yuan, which generated returns per kg US$ 1.28. In the J caliber, the price per box was 175 yuan, with returns per kg of US$ 0.93, and in the XL caliber, the price per box was 140 yuan, which left returns per kg of US$ 0.45. This reflects the values that D’Agen has in the Chinese market.
OPPORTUNITIES AND THE FUTURE OF D’AGEN
Chile today has key opportunities in China. One of these is promotions, which Asoex is promoting. Tagle says that the volume is already known and the customer knows the product, which makes promotions have an impact on the market. “Undoubtedly, that promotion is only going to add to D’Ageny Chile become stronger. Therefore, it is an opportunity that we have to take into account.”
Another fundamental issue is the fervor that the Chinese have for fresh produce, which is very striking according to Tagle. “It gives the impression that whatever the Chinese have, they are going to spend it on fresh food. That’s why we have to highlight the health benefits of the product. This is what we have done with cherries and it has gone very well and I believe that everything is in place to continue with the same line with D’Agen”.
The commercial manager of Garces Fruit concludes: “The potential is there. The demand for fresh and healthy products will continue to be the main source of opportunities. We cannot lose sight of the fact that markets are becoming more and more demanding. If we send a low standard box, the impact will be greater and greater and the industry has to understand this. One mistake in fresh changes your return from positive to negative overnight.