Chilean cherry production has risen by 60%, causing oversupply and price drops in the primary market, China. Logistical delays have compounded these issues, prompting Frusan to seek alternative markets like India and Europe, although challenges remain in volume absorption. Quality management and establishing long-term customer relationships are key strategies for navigating this complex situation.
The cherry season in Chile has faced challenges due to a drastic 60% increase in production coupled with falling prices, resulting in oversupply in the Chinese market, which consumes 95% of Chilean cherries. This situation significantly threatens the profitability for producers.
Pablo Bravo, of Frusan, noted that the record production levels are partly responsible for the difficulties currently faced in Asia.
Additionally, logistical problems arose when a shipment containing 1,300 containers of cherries failed to arrive before Chinese New Year, potentially causing significant financial losses. With a limited product shelf life, Bravo mentioned that the company is assessing actions to mitigate the situation.
To address these supply chain issues, Frusan is exploring new markets, including India, the Middle East, Europe, and the US, to reduce their dependence on China. Bravo emphasized that transitioning to these alternative markets is complex, particularly since they cannot currently handle such a large volume of cherries.
The European market, for instance, has a limited demand for cherries after the Christmas season. Redirecting even a small portion, like 5% of production to Europe, could lead to market collapse, as warned by Bravo.
Frusan, with over 45 years in the industry, also exports various fruits and vegetables. The company actively maintains high quality standards throughout its production chain while managing resources efficiently and fostering long-term customer relationships.
Bravo concluded by stating, “We must adapt to new market conditions and diversify our destinations. It won’t be easy, but it’s what we must do.”
In summary, Chilean cherry producers are navigating increased production and market saturation challenges, particularly in China. Logistical delays further exacerbate these issues, prompting companies like Frusan to seek diverse markets for their cherries. Despite these obstacles, maintaining product quality and exploring new export avenues are critical to the industry’s future.
Original Source: www.freshplaza.com
