The 2021/22 Chilean Cherry Export Season: A Recap, Plus the Way Forward

Chilean sweet cherry exports set another record volume in 2021/22 at 355,000 metric tons. Despite a meagre 0.5% increase in volume, quality was reported better than that in 2020/21 due to enhanced field management (pruning and thinning). This helped to increase the average unit export value (see Figure 1). But this was not the case for all the fruit that arrived in China. Airfreight exports of Chilean sweet cherries, which occur mainly at the beginning of the export season, presented a 23% YOY decline in volume in 2021/22, due to Chinese restrictions on fruit from orchards presenting PNSRV¹ (see Figure 2). This led to a decline in the share of airfreight in the total sweet cherry volume exported by Chile (4% in 2021/22).

Market Diversification Is a Must Going Forward

In 2021/22, for the first time in six seasons, China’s share of the total Chilean cherry exports declined (see Figure 3). Market diversification is a major objective² for the Chilean sweet cherry industry in order to reduce its concentration in one major market. Diversification has started with greater exports to both traditional (US, Europe, and Latin America) and new markets in Asia (see Figure 4).

The US is the second largest destination for Chilean sweet cherries, receiving 13,100 metric tons in 2021/22. This is the highest figure since 2011/12, showing room to continue growth in seasons to come.

Prices in the US for Chilean cherries followed the typical pattern, with high prices at the beginning of the export season followed by a gradual decline as maritime volumes arrived (see Figure 5).

The European market remains tough terrain for Chilean cherries. Europeans mainly consume cherries in their spring and summer period, as stated in our previous report. Toward the end of the US and European winter period, prices significantly decrease (see Figure 6). Attractive winter prices will incentivize further export growth, but high-quality fruit and promotional campaigns are needed to encourage sales.

The two previous Chilean sweet cherry marketing seasons in China (2019/20 and 2020/21) saw extraordinary events – namely, the start of the Covid-19 pandemic and the fake news that traces of Covid-19 were detected in boxes of Chilean cherries – that led to low prices in the period after the Chinese New Year. The 2021/22 season was no exception, this time due to delays across all parts of the supply chain, including in: harvesting, packing, port loading, transit, custom clearance, port unloading, and transport to point of sale.

Each stage presented longer-than-usual times that led to a quality reduction of the Chilean sweet cherries in China. In some cases, delays resulted in 60 days³ between harvest and sale, when the normal time is half that. This also led to periods of scarcity at the wholesale markets in China, which explains the higher prices obtained by the Chilean cherries in the period before the Chinese New Year (see Figure 7).

Lower airfreight volumes led to higher prices for the first part of the season, which benefited early varieties such as Royal Dawn (see Figure 8). The better quality of the 2021/22 harvest led to high prices for mid-season varieties, such as Santina and Lapins, that arrived before the Chinese New Year and avoided the logistic constraints (see Figures 9 and 10). On the other hand, one of the varieties most affected by the extended supply chain times was Regina, which saw record low prices, especially in the period after the Chinese New Year (February 1, 2022) (see Figure 11).

Similarly, clear segmentation was observed in terms of sizes (see Figure 12), especially in the period before the Chinese New Year, which saw higher prices for bigger sizes.

It is worth noting that observed prices during the peak of arrivals in China closely followed the estimates we provided in October 2021. At the end of the season, actual prices were below our average estimate due to quality issues resulting from the logistical bottlenecks.

Headwinds and Tailwinds Await the Expanding Chilean Production

As production in Chile is expected to increase, some challenges and opportunities remain for the seasons to come. On the production side, investment in sorting ang packaging lines and efficiency-improving technologies will be a must, as well as logistic measures to reduce transit and custom clearance times. Provided these investments and improvements are made, production and exports of Chilean sweet cherries will remain profitable for the long term.

Both US and European markets present untapped commercial opportunities for Chilean fresh sweet cherries. The main segment of buyers is older people (empty nesters and retirees) and consumption is mainly concentrated in the summer season. However, there are opportunities for producers and exporters of high-quality Chilean cherries to take advantage of different promotional dates throughout the season, such as Christmas, Chinese New Year, the Super Bowl (in the US), and Valentine’s Day.

Last but not least, the Chinese market will remain the primarily destination. Despite a turbulent 2022 so far, due to the zero-Covid policy, Chinese demand for Southern Hemisphere (counter-season) cherries is still high, but below the consumption of the summer months. However, logistics times and costs will remain as the main challenges to overcome in the next season.

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