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South Korea access for Chilean cherries

South Korea’s move to allow fumigation-free access for Chile could see winter demand for cherries take off in the north Asian nation

South Korea access for Chilean cherries

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Chilean cherry growers received a New Year boost yesterday with the news that South Korea has granted fumigation-free access to their fruit.

Chilean Agriculture Minister Carlos Furche announced the breakthrough after receiving official notification from South Korea’s Plant Quarantine Agency (QIA) that Chilean cherries would be allowed to enter the north Asian nation under a so-called ‘systems approach’ protocol.

Furche hailed the breakthrough as a key step forward for Chile’s cherry export industry, which he said had witnessed the most dynamic development in Chile’s fruit sector over recent years, and was set for further standout growth in the years to come.

“The ability to effectively reach Korea with our cherries is great news for our fruit sector,” Furche said. “China is the largest market for our cherry exports, but the opening of the Korean market allows us to effectively diversify, and also allows – given its consumers have different habits to other countries such as China – market space for a portion of our production which will probably have has less room in China or other markets.” 

Chilean cherry exports reached 20m cartons in 2014/15. China/Hong Kong was by far the leading export destination, accounting for 10.2m cartons, or 50 per cent of total exports. Other key markets included the US, Europe, Brazil and Taiwan.

The opening of the market follows four years of joint efforts between QIA and Chile’s Agriculture and Livestock Service (SAG), supported by the Chilean fruit production and export industries and the Chilean Embassy in Seoul. Last October, QIA inspectors visited Chile as part of the pest risk analysis, verifying production and export processes, as well as pest control measures, touring orchard and packhouse operations in the Metropolitan, O’Higgins and Maule regions. 

Chilean Fruit Exporters Association president Ronald Bown hailed the announcement as “an excellent start to the year”, and congratulated all parties involved for achieving access in a “relatively quick” timeframe.

“The news fills us with expectation, because we believe that cherries have a large market in Asia, specifically what we are seeing in China, but obviously there are other countries which, like Korea, may be important from the point of view of the reception of our fruits,” said Bown.

“Together with the Minister of Agriculture, we look forward to later this month announcing in Korea the arrival of the first Chilean cherries to Seoul in what will be a great boost to the national fruit industry.”

Fuelling winter demand 

South Korea’s cherry imports have witnessed significant growth over recent years, but the overwhelming majority of shipments have arrived from the US during the summer season. Cherry import leapt by more than 46 per cent in 2014 to reach 13,360 tonnes. The US supplied some 99 per cent of the volume, with growth fuelled by the KORUS free trade agreement between the two countries, which has eliminated the import duty on US cherries.

Winter demand for cherries has been limited in Korea to date, partly due to the abundant supply of domestically-grown fruits during that period of year, with good-quality local options available at low prices.

New Zealand and Tasmania are the key cherry suppliers during the winter months and both have enjoyed strong gains in recent years albeit off low bases.

Australian exports, all sourced from Tasmania, lifted from just five tonnes to 247 tonnes worth A$2.5m in the 2015 season – a result enabled by the Korea Australia free trade agreement (FTA), which eliminated a 24 per cent import duty.

New Zealand, which supplied 1 per cent (around 133 tonnes) of South Korea’s cherry imports in 2014, has also just seen a 24 per cent tariff on its fruit erased under the New Zealand-Korea FTA. The tariff elimination took effect on 20 December in the middle of the current New Zealand cherry season.

Nevertheless, both Australia and New Zealand remain high-cost suppliers, and Korean importers note that their high prices ultimately curb market demand. With Chile gaining fumigation-free access, there is potential for the South American export giant to ship at lower prices, thereby fuelling winter cherry demand.

Chang Hwa-Oh of leading Korean fruit importer Jinwon Trading, which has a sizeable share of South Korea’s winter cherry market, said fumigation-free access could see sales for Chilean cherries take off, but cautioned that he was waiting to find out what kind of prices Chile would be offering.

“For Chile, we need to check the price: if the price is low enough to cover any quality issues resulting from the long voyage, we’ll have strong demand.”

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