The Grape Divide

The fruity battle between Peru and Chile for global dominance.

In the realm of South American agriculture, the battle for table grape supremacy between Peru and Chile is heating up, and it’s a story that’s ripe with twists and turns. In a surprising turn of events during the 2022/2023 season, Peru took the crown from Chile as the top exporter of table grapes in the Southern Hemisphere. With a staggering 30% market share, Peru boasted exports of 592,847 tonnes, raking in a mouth-watering USD 1,423 billion in FOB revenue. Meanwhile, Chile’s exports plummeted by 19%, struggling against climatic challenges, fierce competition and the ever-looming spectre of shipping costs. Despite shipping woes, Chile managed to pull in USD 794 million from 495,939 tonnes of grapes.

Chile’s traditional dominance in the grape market is being challenged by Peru’s rapid adaptation to new varieties. “In recent years varietal replacement has played a very important role in the positioning in the markets, where Peru has had a more rapid role than Chile,” informed the general manager of a multinational agribusiness company.

Chile faces the prospect of reduced grape areas and increased competition from South Africa and China. “Chile is losing ground on grapes,” reported a Chilean agrobusiness expert, “many people believe the areas planted with grapes in Chile will be dramatically reduced in the near future and leave only produce for the local market.” To regain market share, Chile plans to export new grape varieties tailored to international markets’ preferences and its own growing conditions.

“many people believe the areas planted with grapes in Chile will be dramatically reduced in the near future and leave only produce for the local market.”

Expert in agrobusiness, Chile  

This strategic shift aims to enhance competitiveness and ensure a continued presence in key markets like North America. “The fact that Peru is closer to Ecuador means they can run earlier production that can get to Northern Hemisphere markets by the end of the local production.” The expert in agrobusiness continued, “so they may get the attention of those markets a couple of months earlier than Chilean produce.” 

Now, let’s also peek at the blueberry battleground. In the 2023/2024 season, Peru faced a 25% contraction in blueberry exports due to pesky climate contingencies. But fear not, for experts predict a swift recovery, thanks to Peru’s knack for adapting to market demands with new and improved blueberry varieties. “As with grapes, and more markedly so with blueberries, varietal change has become a crucial factor for competitiveness in the markets,” cited the Asian region general manager for a multinational agribusiness company. The Chilean agrobusiness expert also added, “geographies close to Europe, such as Morocco, will have an increasing influence on the European market, which could lead to rearrangements in the supply of fruit origins.”

Meanwhile, Chile – the world’s fourth-largest fresh blueberry producer – finds itself in a bit of a pickle. While Peru pivots and adapts, Chile’s blueberry sector is losing steam. “Different origins are entering the competition with increasing volumes and outstanding qualities; such is the case in China.” Moreover, “Peru is also working in advance to open new markets in Asia, specifically access to Japan and Korea,” noted the general manager of the Asian region. Hopefully, with strategic adjustments such as redirecting exports to the frozen sector and investing in new genetics, Chile aims to maintain its blueberry dominance.

Yet, despite their individual successes, both Peru and Chile face a slew of challenges on the road to fruit and vegetable export expansion. From adapting to climate change as “the world is facing several challenges and part of those challenges put the focus on fruit exports.” The agrobusiness expert exampled, “producing fruit on the other side of the world, that needs a lot of technology and high investment. The environmental movements pressure agriculture to be clean (something challenging for a product that needs to keep for 60 days transit time) and finally, the “local production” trend that ends in avoiding the consumption of far-origin-produce because of the carbon footprint.”

Now, also battling new competitors like Mexico and Southern China to grappling with logistical nightmares and labour concerns, for instance “Peru has lower salary levels, that let them keep under control the highest cost of agriculture,” the road ahead is fraught with obstacles. Success hinges on incorporating technology, introducing new varieties and responding to changing market preferences.

“Peru has lower salary levels, that let them keep under control the highest cost of agriculture.”

Expert in agrobusiness, Chile  

Collaboration between Peru and Chile in fruit exports is limited. Relations primarily revolve around integration within the same industry and “a good part of the production sites from Peru have relations with big companies in Chile and they all run high-technology projects,” confirmed the agrobusiness expert.

“Chile entered the world of fruit-exports in the mid 70`s and Peru only came into the picture in the 2000’s” and despite the current focus on complementarity, opportunities exist for deeper collaboration. At the 2024 Global Grape Convention, producers from Peru and Chile convened to tackle common challenges and explore potential synergies. While many hurdles remain, the battle for fruit supremacy is far from over as Peru and Chile vie for that juicy pole position in the global market.

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