canned deciduous fruit

Canned Deciduous Fruit Situation
in Selected Countries

For the last two years world production and exports of all canned fruit have been below the previous five year average due to unfavorable weather conditions in Europe. Production of canned fruit in selected countries for 1998/99 is forecast at 1.48 million tons up 5 percent from last year’s estimated output of 1.41 million tons. Increased canned fruit production in Greece and South Africa more than offset lower output in Spain, Italy and the United States. However, exports of all canned fruit are forecast to decline by 1 percent to 802,871 tons, due to lower than average supplies of canned pears, canned apricots and canned fruit mixtures. Lower canned fruit exports from South Africa, Spain and Italy are expected to more than offset expanded canned peach exports from Greece. U.S. canned peach supplies are expected to be up slightly in 1998/99, as larger beginning stocks offset smaller U.S. production. U.S. canned peach exports in 1998/99 are forecast to increase sharply.

Regional and Country Highlights

Unfavorable weather conditions reduced production of canning fruit throughout Europe. The poor growing conditions not only reduced the size of the crop but also reduced the quality. Peaches, which recently comprised about 70 percent of total European canned fruit output fell to about for 64 percent. As a result of the poor quality and sourcing of less expensive inputs by two leading canners, Greek output of canned mixtures increased from 1,800 tons to 7,500 tons. In Italy, the unfavorable weather conditions put additional pressure on domestic canners already facing rising costs and increasing competition from Greece and South Africa. Imports from South Africa have increased due to favorable exchange rates.

South African canned fruit exporters continue to be competitive because of the constant devaluation of the Rand against all major currencies. Since 1995 the Rand has devalued against the dollar from R3.63 per dollar to R6.24. Without considering inflation, these devaluations s reduce the price of South African canned fruit by 42 percent. South Africa has recently negotiated but has not yet signed a Free Trade Agreement with the EU. The Agreement ,which would enter into force next January, should benefit the South African canned fruit industry. The EU would grant South Africa a global tariff rate quota of 40,000 tons on imports of canned peaches, pears and apricots, 18,000 tons of imports of fruit mixtures and 2,000 tons of tropical fruit mixtures. EU duties on canned peaches, pears and apricots which currently range between 19 and 22 percent, and duties on fruit mixtures which range between 10 and 13 percent would be reduced by 50 percent for the quota amount. South Africa will be the only country receiving preferential treatment for these products.

Excellent weather conditions boosted Chilean production of canning fruits in 1998/99. However, exports of both canned peaches and canned mixed fruits are expected to decline, reflecting sluggish demand in Asia and Latin America. Due to growing competition from subsidized Greek exports, the Chilean industry is seeking to expand its share of the Brazilian market by enlarging its Mercosur quota. Under the current quota, Brazil allows 3,000 cases of canned fruit to enter under a reduced duty rate of 7 percent. The full duty is 28 percent. Chile is seeking to expand the quota to 500,000 cases. However Brazil is also the largest market for Argentine canned peaches and any changes to the quota will most likely accommodate Argentina too. During the last three calendar years Greece dominated Brazil’s canned peach import market accounting for two thirds of the value of imports from all origins. Argentina’s market share of Brazilian imports increased from 19 to 33 percent while Chile’s market share declined from 10 to less than 1 percent. Chile’s principal export markets are Mexico, Peru, Colombia, Ecuador and Argentina.

Argentina’s canned peach production increased 45 percent over the last two years due to new plantings of improved varieties and the introduction of modern technology which has greatly improved efficiency and yields. Unlike Chile, however, most of Argentina’s production is destined for domestic consumption. Thus, imports have declined dramatically while exports have only marginally increased. Brazil is the only country that Argentina exports to consistently.

Australian production and export of all canned fruits, peaches, pears, mixed fruit and apricots has been remarkably consistent for the last four years. Low yielding trees are being replaced with new varieties, a depreciating Australian dollar helps keep exports competitive, inefficient canners are leaving the business while antidumping duties on subsidized competition from Greece and China have been either removed or reduced and the promotion of "snack packs " and production of "natural fruit" packed in fruit juice rather than in syrup has helped maintain domestic consumption.

U.S. canned peach production in 1998/99 is forecast down nearly 4 percent due to freeze damage and late bloom. Total U.S. supplies though may be the same as last year due to large carryover stocks. U.S. canned peach exports to date (June 1998- February 1999) are 64 percent above shipments during the same period a year ago. Expanded sales to Europe and Mexico are the reason for this growth.

(For further information on canned fruit production and trade contact Robert Knapp, 202-720-4620. For information on marketing contact Yvette Wedderburn-Bomersheim, 202-720-0911.)

Last modified: Thursday, April 06, 2000