The 10 billion business behind Chilean cherries: China almost "chartered" more than ninety percent
Cherries, which are produced 20,000 kilometers away, have become the "sales champion" in China's fruit market around the Spring Festival.
Cherries are sweet and delicious, ruddy in color, and happen to be listed at the end of the year and the beginning of the year, further consolidating its position in the Chinese New Year market. The vast majority of these fresh cherries come from Chile in South America, which is actually one of the farthest countries from China from a geographical point of view. But the distance does not hinder its hot sales in the Chinese market.
According to the latest data released by the Chilean General Directorate for the Promotion of Exports (Prochile), in January 2024, 93% of cherries exported in Chile were shipped to China, generating US$1.447 billion (about 10.4 billion yuan) in revenue for Chile, a year-on-year increase of 30.8%.
The popularity of Chilean cherries is due to the deepening of trade cooperation between China and Chile. In 2017, the China-Chile Free Trade Area upgrade negotiations reached an agreement, and more than 97% of the products of both sides have achieved zero tariffs, and cherries are one of them.
Over the past seven years, Chilean cherry exports to China have grown at an average annual rate of about 29%. Yue Yunxia, director of the Economic Research Office of the Institute of Latin American Studies of the Chinese Academy of Social Sciences, told the first financial reporter that although the tariffs on agricultural and sideline products are not high, after the signing of the free trade agreement, more products will enter with zero tariffs, and the Chinese people can enjoy more foreign high-quality products at lower prices and enrich our table, which is of great significance.
Send out the Cherry Express and special plane
Chile's El Niño phenomenon last year caused a reduction in cherry production due to torrential rains in the spring, but this did not affect the export value to reach a new high. According to data from Chile's General Directorate for the Promotion of Exports, Chile's cherry exports hit a record high of $1.555 billion in January, of which $1.447 billion came from sales in the Chinese market.
It can be said that China and Chile have achieved each other in cherries. China offers a vast market, while Chile offers quality products. In the past 20 years, Chile's cherry exports have increased by more than 5,000%, from an initial export value of about 36 million US dollars, to 2 billion US dollars in 2023, becoming the world's main supplier of cherries.
Iván Marambio, president of the Chilean Fruit Exporters Association, said that the huge growth potential of the Chinese market has injected important confidence into the Chilean cherry industry, and has also benefited many Chilean farmers.
According to the Chilean Office for Agricultural Research and Policy, cherries cultivation in Chile has grown rapidly from 3,241 hectares in 2000 to 61,559 hectares in 2022 and a record 67,570 hectares in 2023.
Although Chile is located in the far southern hemisphere, it is precisely because of the advantage of being out of season that the fruit supply period coincides with the winter market when fruits are scarce in China. China's local cherries will not be available until May or June, while cherry suppliers such as the United States and Turkey are also in winter and are out of stock. Therefore, Chilean cherries occupy the advantage of "time of day".
In terms of "geographical advantage", Chile is a long and narrow country in the north-south shape, with the vast Pacific Ocean and Coast Mountains to the west and the Andes Mountains to the east. The central valley between the two mountain ranges is fertile ground for fruit growth and is also the main producing area for cherries, and the suitable climate combined with the fertile volcanic ash soil makes cherries sweet and of high quality. Today, the fruit industry is an important part of Chile's economy.
In order to explore the Chinese market, in fact, as early as 1991, Chilean businessmen came to China to promote Chilean wines and fresh fruits, but limited by China's consumption power at that time, they failed to open up sales. It was not until 2008 that China and Chile signed the Protocol on the Quarantine of Chilean Cherries and Prunes Exported to China, and Chilean cherries were officially allowed to enter the Chinese market.
Cherries are perishable fruits that have a shorter age when they are fresh. In order to ensure the taste and quality of cherries at the time of sale, transportation routes, storage, and preservation are all difficult problems. At present, Chile's cherries to China are divided into two routes: one is refrigerated by sea, which generally has to be adrift at sea for about 25 days, which is the mainstream of Chile's cherries exported to China;
A large number of cherries are picked from the fields in Chile, forcing logistics companies to change the traditional transportation mode and step up logistics reform. For example, COSCO SHIPPING has opened the "Cherry Express" connecting the port of San Antonio in Chile and Shanghai, which has reduced the original 32-day voyage to 23 days, so that the supply of cherries by sea can be increased by 1.8 times.
In terms of air transportation, Cherries originally used a mixed passenger and cargo loader. Such flights, in addition to transporting cherries, also take on the task of carrying passengers, and the loading and unloading time is longer. Coupled with problems such as flight transfers, it takes at least 100 hours to transport by air. Now, in the all-freighter mode, the time for direct shipping from the origin to China has been reduced to 30 hours, which means that the volume of shipments in the same time can be increased by a factor of three.
It's not just about cherries
For the hard-won market, Chile attaches great importance to maintaining the reputation of Chilean cherries, and every year the Chilean government and relevant export agencies are willing to spend money in China to promote cherries. However, the quality of the product is very important for the quality of the reputation.
According to the "Quality Guidelines for Exported Cherries" issued by the Cherry Committee of the Chilean Fruit Exporters Association, from December 1, 2021, the minimum size of cherries sent to China has been increased to XL grade, which means that Chilean cherries with a fruit diameter of less than 24 mm will not be seen in the Chinese market in the future.
Today, Chilean cherries of "JJ" (28 to 30 mm in diameter) and "JJJ" (30 mm or more) are the mainstream in the market. "J" is a commonly used unit for grading Chilean cherries, and generally the larger the fruit diameter, the higher the price.
According to data from the General Administration of Customs, more than ninety percent of domestic cherries imported in 2023 will come from Chile. In May and June, the domestic import cherry market was mainly supplemented by Central Asian countries such as Uzbekistan, while the import sources in July, August and September were mainly the United States and Canada. The price of these imported cherries has generally decreased in recent years.
In fact, not only cherries, the price of many high-end imported fruits has become more and more "affordable" in recent years. This is inseparable from the gradual improvement of cross-border logistics and cold chain logistics, and the sharp reduction of transportation costs. For example, after the opening of the China-Laos Railway in 2022, durian and other fruits from Thailand can enter China through multimodal transport, with stronger timeliness guarantee and large and stable supply, which will gradually reduce the terminal price.
China is Chile's largest trading partner, largest export destination and largest source of imports. The two sides have continuously deepened cooperation in many fields such as economy and trade, mining, energy, agriculture and fishery.
In October 2023, the General Administration of Customs of China issued the Announcement on the Plant Quarantine Requirements for Imported Chilean Fresh Stone Fruits. In December, the General Administration of Customs updated the fruit access list, and Chilean nectarine, peach, apricot, plum and other fresh stone fruits were officially approved for import. At the same time, Marambio said that in recent years, the Chilean market has also accepted Chinese agricultural products, and Chinese fruits such as apples, pears and lychees have been exported to Chile.
In December 2023, the Ministry of Economy of Chile officially passed the certification of the first batch of 2.3 tons of fresh coho salmon exported to China, marking the official start of Chile's fresh coho salmon export to China. Previously, most of Chile's aquatic products were frozen, but after the signing of the agreement, this species will also be included in the list of chilled salmon exports, which will further expand the trade volume with China, consolidate the market in China, and bring more economic growth and jobs to Chile. Former Chilean Ambassador to China Juan Mata said that in the past 20 years, the Chinese market has injected important confidence into Chile's export trade.
According to Xinhua News Agency, in 2023, the customs will newly allow 146 kinds of high-quality agricultural and food products from 51 countries and regions to be exported to China, continuously meeting the diversified needs of domestic consumption and the people's yearning for a better life.
Chen Bangxun, director of the Department of Development Planning of the Ministry of Agriculture and Rural Affairs, said at a press conference of the State Council Information Office on January 23: "At present, the mainland has been deeply involved in the international agricultural product market. The import value of agricultural products ranks first in the world, becoming the world's largest market for agricultural products, and the export volume of agricultural products ranks fifth in the world, and the export value of agricultural products from the mainland will reach 98.93 billion US dollars in 2023, an increase of 0.9% over the previous year. ”