SAT Royal

The signing of an import protocol paving the way for exports to China in April heralds the advent of a new era for Spanish stonefruit exports and one company in particular believes the market could be a perfect fit for its products.

With an annual turnover of €100m, SAT Royal is one of Spain’s leading grower-exporters of stonefruit and berries, with production spread across Huelva, Portugal and Morocco. With demand for both these products growing strongly in China the company is wasting no time in exploring what the market has to offer. Under the terms of the protocol Royal has already registered several stonefruit orchards for export, specifically for yellow and white-fleshed nectarines and various pluot varieties.

Initially, the focus will be on airflown shipments which are due to get underway in June. “Technically, seafreight is also a viable option, although this does present challenges with early varieties,” says Diego Pozancos, who oversees quality and product development at the company.

“The regulations require shipments to be subjected to cold treatment for a two-week period and while this doesn’t affect quality, it does significantly reduce the shelf-life of the fruit.”

Pozancos says the fact that European fruits and vegetables are so highly prized by China’s burgeoning middle class for their safety and quality makes the country highly attractive.

“Chinese consumers are very aware of the link between nutrition and health and are wary of domestic produce as it is often perceived as being contaminated,” he explains. “It’s important to note, however, that when we talk about China, we are not talking about a potential market of 1.3bn people. Around 40 per cent of the population lives in cities but less than 10 per cent – around 95m people – has the purchasing power to be able to afford imported produce. Nevertheless, this represents a decent sized market where our produce is in high demand – our biggest challenge will be overcoming the obstacles imposed by the import protocol.”

A key feature of the Chinese market is the dominance of regional importers and wholesalers, very few of whom operate at a national level. This, together with the country’s underdeveloped cold chain infrastructure, will impose certain limitations on the company’s market development strategy, Pozancos says.

Royal hopes that gaining a foothold in the Chinese market will smooth the way for the company to start exporting blueberries once the protocol is in place, although Pozancos doesn’t think this will be any time soon. “European agriculture commissioner Phil Hogan has made it clear that while negotiations with China are advancing positively we should not expect to see great progress in the short term,” he says. “For Spain, the next protocol up for negotiation is for table grapes. In terms of volume, blueberries come a long way behind grapes, which suggests that it comes way down the government’s list of priorities.”

Nevertheless, the company is one of several Spanish berry suppliers preparing the way with investments in imported varieties and new technologies to ensure that they are fully prepared when the market does eventually open.