In Logistics

Latin America’s perishables exports, its traditional staple, is growing steadily during 2019 while manufacturing is also on the rise — a development that the exodus of production from China will accelerate, according to American Global Logistics (AGL) CEO and chairman Jon Slangerup during an interview in August 2019 for

A Chinese Love of Cherries

Latin American perishables exports are driven mostly by Chinese demand. Ninety-five percent of Chile’s cherry crop is flown to China, according to the Chilean Fruit Exporters’ Association. Today, China is the #1 export customer for Brazil, Chile, Peru and Uruguay.

A growing middle class in China and a taste for fresh and organic produce in the U.S., Europe, and Asia is creating an increase in air cargo demand for Latin America’s fresh produce. Air cargo allows consumers in the northern hemisphere to enjoy the same produce year-round. Chinese concern over food quality and safety has grown acute in recent years as episodes of toxic food scandals have tainted the reputation of the agricultural sector in the middle kingdom. Imported organic horticulture and dairy enjoys swift demand among the affluent and professional classes in China.

Chinese per-capita disposable income has more than doubled since 2009, according to the trading economics, to the point where a wider segment of society can now afford imported food. Red cherries, popular for Chinese New Year in January and February, are out of season during that time in China but now are flown in from Chile and on the shelves of Chinese supermarkets within a week of harvest in Chile.

The U.S. Is Still LatAm’s Best Fruit and Vegetables Customer

Free trade agreements between the U.S. and Mexico, Central America, Peru, Colombia and Chile have bolstered fruit and vegetable trade. China may soon become the largest customer of Latin American perishables but for now, that title still belongs to the US. Trade statistics from the USDA (US department of Agriculture) show that U.S. imports of fresh fruits and vegetables from Central America more than tripled from 2000 to 2018, rising from $920 million in 2000 to $2.94 billion in 2018 while imports from South America more than tripled from $1.27 billion in 2000 to $4.37 billion in 2018. Nine Latin American countries represent 92.3% of total U.S. fresh fruits imports, led by Mexico, Chile, Guatemala, and Costa Rica, according to a report from the Organization for Economic Co-operation and Development and the United Nation’s Food and Agriculture Organization.

Latin America has become a global leader in several horticulture product categories thanks to its favorable climate, moderate land costs, competitive labor, relatively advanced mechanization in some areas, and improving air cargo connectivity. Tomatoes and avocados from Mexico, Cherries, apples and grapes from Chile, Asparagus, mangoes, and avocados from Peru, Flowers and bananas from Colombia, Lemons and pears from Argentina are all products that reach global markets. Latin America is home to 30 percent of the world’s potentially arable land and a higher share of renewable fresh water, according to the Food and Agriculture Organization.  

Opportunities in Cold Chain Infrastructure

In spite of its enviable natural resource endowment, the ability of Latin American farmers to feed a world hungry for temperate and tropical foods is hampered by a lack of cold chain logistics infrastructure. Between grower and port of export, be it by plane or ship, insufficient cold chain trucking and warehousing leads to wasteful spoilage. Export taxes and bureaucracy suffered in particular in Argentina and Brazil further delays shipments and spoils food. Given the premium prices fetched for fresh Latin American horticulture in the northern hemisphere, investment opportunities abound to those who can fill the cold chain infrastructure gap in leading horticulture producer nations, particularly: Mexico, Colombia, Chile, Peru, and Ecuador who all look to Asia to drive export growth.

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