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A View from the Top.

Article from Luisa Cheshire from Trade Latin America

A view from the top.

Brazilian apple supplier and apple producer organisation ABPM chairman Pierre Nicolas Pérès gives his view of Brazil’s 2011 apple season

The 2010-2011 growing season started very well with a good winter for our latitude. The problems started in the spring. A cold and rainy period during blooming with some severe frost in high altitude orchards was the first setback.  Then widespread and intense hailstorms in most apples regions badly hurt growers. Heavy and prolonged rain followed during the summer months, making it the wettest summer on record.

This succession of climate events has reduced Brazil’s 2011 apple volumes. Take Fuji as an example: the 2010 Fuji crop was the largest ever produced. 2011 will be a non-bearing year.  

Across the board, though, crop losses average out at around 18 per cent compared to last year. The continuous rain has increased Gala sizes to far bigger than average, so for the second consecutive year Brazil will be short on small sizes.  This fact has helped to reduce the impact of the bad weather; we were expecting a bigger decrease in production.  

Gala quality is good, with a good colour and a good crunch. Shelf-life will be affected by the excess of water apples have received.

Thanks to our fast-growing economy, the domestic fruit market is very dynamic. Our shorter crop, coupled with the serious problems of unfavourable exchange rates and rising input costs, have led most exporters to significantly reduce their exports to Europe this year and focus on supplying the local market.  

This is never an easy decision, but one that makes financial sense in the circumstances.

Table: Appreciation of the Brazilian real, source: http://www.portalbrasil.eti.br/indices.htm

 Year Reals per US$1 on February 1
2011 1.664
2010 1.861
2009 2.324
2008 1.746
2007 2.099
2006 2.226
2005 2.608
2004 2.932
2003 3.505

 

The only way to make exports profitable is through the devaluation of the real. This is unlikely to happen any time soon.

Another challenge facing the Brazilian apple sector is industry fragmentation. There are too many packhouses offering the same products to the same few buyers. And even with a shorter crop, this puts tremendous pressure on prices.

Brazil’s apple producer association ABPM is leading efforts to create a consortium of apple growers to concentrate their offer, standardize quality and bring order to the market.

Despite higher sales prices over the last few years, grower returns are falling. The successful creation of this consortium is the key to the sector’s sustainability. We can’t change the past, but we can influence the future.

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