“A possible consequence is that a portion of the current production destined for the USA may be forced to exit that market…”
Isabel Quiroz is a founding partner and the executive director of iQonsulting, a Chilean consulting firm focused on fruit farming.
Quiroz is an agronomist from the Pontifical Catholic University of Chile, with a M.Sc. in markets, marketing, and sustainability.
Isabel Quiroz, founding partner of iQonsulting
AgriBrasilis – How will the 10% tariff imposed by the USA affect Chile’s fruit industry?
Isabel Quiroz – In general, this increase will be passed on to the final consumer. From this perspective, and considering Chile’s main fruit exports to the USA, grapes, blueberries, stone fruits, tangerines, and apples will be the crops most affected by the tariff.
The first level of the supply chain to be impacted will be the consumers. Farmers are also likely to suffer losses. It is unlikely that intermediate levels, such as retailers, intermediaries, and importers, will be affected.
A possible consequence is that a portion of the current production destined for the USA may be forced to exit that market and explore new alternatives. Therefore, it is very likely that Chile will experience a decline in exports of its main products, focusing only on high-quality items capable of absorbing the increased tariff costs.
AgriBrasilis – What were the outcomes of the international mission held in March to strengthen agricultural relations between Brazil and Chile?
Isabel Quiroz – The relationship between Brazil and Chile is very close, and this is reflected in the systematic increase in exports between the two countries.
The international mission can be considered highly successful, with significant progress made toward facilitating the exchange of goods and services and expanding the scope of existing agreements between Chile and Brazil.
Brazil is currently Chile’s main trading partner for fruit exports in Latin America. It is a highly diverse country, with varied market niches, capable of consuming a wide range of products. Chilean farmers’ and exporters’ growing knowledge of this market will enable them to better position their products. An example of this was the expansion of apple varieties in Brazil, which was the case that varieties once considered popular only in the USA or Europe, such as Honey Crisp and Pink Lady, have also found a market in the country.
“…it is now possible to irrigate with half the water used 15 years ago in many sectors, without affecting productivity.”
AgriBrasilis – How is the sector innovating to reach new markets?
Isabel Quiroz – Currently, the main line of innovation is the transformation toward sustainable agriculture. Increasingly, both farmers and exporters are embracing this, and it will certainly be the major future impact Chile will have on the market.
In Chile, it is possible to practice agriculture with minimal negative impact or even positive environmental impact when it comes to regenerative agriculture. Looking at current projects, most are in the area of regenerative livestock farming, but fruit farmers are also moving in this direction.
Another point is technological innovation, which includes managing production with real-time data and introducing new genetics with varieties better aligned with market interests. We know that consumers seek products that not only offer flavor and quality but are also practical, easy to consume, healthy, and nutritious.
Markets are constantly evolving; therefore, more diversification and Chile’s strong market positioning can facilitate product reallocation when a specific market is problematic. In this regard, Latin America — and Brazil in particular — has renewed the interest of Chilean exporters, due to its consumption capacity and market proximity.
AgriBrasilis – What have been the consequences of the drought for fruit production in the country?
Isabel Quiroz – The drought has caused a reorganization of productive areas. A significant number of productive hectares have been removed from the system, including areas once used for the cultivation of table grapes, avocados, walnuts, and almonds. Nevertheless, technology has come to aid of farmers: it is now possible to irrigate with half the water used 15 years ago in many sectors, without affecting yields.
AgriBrasilis – Why has innovation through the development of new apple varieties not produced the expected results?
Isabel Quiroz – The introduction of a new variety, whether productive or commercial, carries many risks. A variety will not necessarily yield good results simply because it is new.
The challenge lies within the difficulty of conducting testing while simultaneously scaling up the supply of a variety that meets market demands. Most often, these processes occur in parallel. When a variety is highly accepted, it is very positive for farmers.
However, in some cases there is no market acceptance, as we have observed in Chile with some of the newly introduced apple varieties. Among these is the Kanzi variety, which possesses all the characteristics thought to be suited to the European taste. Nevertheless, this was not the case. Even Kanzi’s European production is struggling. Prices have reached levels that are no longer attractive for local farmers or for imported supplies.
Ultimately, the Chilean industry opted to strengthen its basic or commodity lines and to operate with high efficiency. Varieties such as Gala, Fuji, and Pink Lady in Chile have reached such high production volumes that they are almost considered commodities. Other basic varieties, like Red Delicious and green apples, are also being revalued as there are few alternative options.
Nonetheless, new varieties continue to be tested, and we will certainly see significant changes in the apple market in the future.
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