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Russian demand drives Argentina fruit export growth

Russian demand drives Argentina fruit export growth

The production and sale of Argentinian fruits and vegetables is beginning to rebound after a year in which the sector's problems continued to deepen; loss of competitiveness due to rising costs and lower demand, especially internationally because of the global economic crisis.

According to a report by consultancy IES, the first quarter of 2013 yielded results that show an improvement, for starters, in the quantities produced.

As for the harvest, the data show a 3.8% rise in fruits, driven by the increase in the harvest of apples and pears.

Moreover, the projected production of vegetables for 2013 shows a production increase, which would lead to volumes similar to the ones in the last five years, the report explains. Projections for the 2012/13 campaign are that it’s going to be 3.3% higher than the previous one, according to the IES.

The first quarter numbers are positive for fruit exports: joint external sales of fruits and vegetables totaled US$ 477.4 million, a 12.9% improvement over the same period of 2012. There was a slight 1.3% increase due to a rise in shipments of fruits (11.2%) and a fall in vegetables (12.7%) compared to the same quarter of 2012. The current situation contrasts with the trend of 2012. Last year, foreign sales of fruits and vegetables totaled US$ 1 billion 572.5 million and a 13.6% decrease compared to 2011. Export volumes in 2012 were 15.6% less than in 2011.

During the first quarter, the main export destination of vegetables continued to be Brazil, which in the first quarters garnered 52.1% of foreign sales, a distant second, Algeria, with 8.9% of the total. In this context, this year’s accumulated sales to Brazil, up to March, were $93.3 million.

Regarding export destinations of fresh fruits in the first quarter of 2013, Russia, Brazil, the Netherlands, Italy, and the United States, in that order, top the list.

Shipments to Russia totaled US$ 72 million in the first quarter. The destiny accounted for 24.1% of total shipments, a strong 43.6% rise in value and 38.2% in quantity. Brazil is the second destination, with shipments totaling US$ 62.8 (21.1% of the total) although, in dollars, sales fell 8.2% compared to the accumulated up to March 2012 while the decline in quantity was of 11.5% in the period.

In 2012, there was a lower harvest of fruits coupled with a lower demand from Europe because of its crisis, which brought the average export prices down and outlined a bad picture of quantity and prices, which affected exports.

In turn, the constraints imposed by Brazil affected fruit shipments to the neighboring country, closing a negative context for external sales.

As for the sales of fruits and vegetables in the domestic market, IES research shows an increase in 2013 so far, after three years of losses.