Fresh fruit leads Chile's export mix - Chile emerges as major supplier of fresh fruit to world market due to ample natural resources, consumer demand for fresh fruit during winter season in U.S. and Europe, and incentives in agricultural policies of Chilean government, encouraging trend toward diversification of exports and development of nontraditional crops - U.S. Dept. of Agriculture, Economic Research Service Report

Agricultural Outlook, April, 1992

Revenue variability from agricultural exports is also reflected in an index of concentration. If only one agricultural good is exported, the index equals 100. The greater the diversity of exports, the closer the index lies to zero.

From 1962 to 1977, the indexes for total agricultural exports from Chile trended downward, as exports gradually became less concentrated. In 1975 and 1976 the drop was substantial, reflecting a boost in exports of apples and table grapes alongside the traditional agricultural exports.

The index dropped again in 1977, but by 1978 it began to get larger, reflecting an increasing concentration in apple and table grape exports from Chile. By 1987, the final year of the data set, the concentration index was at 16.3, one of the highest levels in the entire time period. (The highest level of concentration was observed in 1985.) After 1985, Chilean exporters began diversifying a second time into other fruit crops such as pears, peaches, and nectarines. Although the index was still high in 1987, it was lower than the peak of 1985.

The value shares of Chile's major agricultural exports in the 1962-67 and 1974-87 periods also show the trend toward diversification into nontraditional crops. In the first period, apples held 12.7 and grapes 10.3 percent of the total value of agricultural exports. In the 1974-87 time period, apples accounted for 27.2 and grapes 44.3 percent. Export shares of pears and peaches approximately doubled between 1962-67 and 1974-87. By contrast, export shares of lentils, beans, and wool declined.

Export data for 1968-73 indicate that as the share of Chile's exports of apples and table grapes increased, their CV's also rose considerably. By the 1974-87 period, exports of table grapes and apples had expanded to a value of 5.7 and 3.5 times greater than traditional bean exports, and the CV's of their export prices grew remarkably, to 67.99 and 12.03.

The increased price variability and concentration suggest the need for a second round of diversification of agricultural exports beyond apples and table grapes.

Looking Ahead

The fresh fruit sector has led the way in showing farmers and investors how to benefit from Chile's market- and export-oriented agriculture. Chilean fruit production for 1992 is forecast slightly above 1991's record levels. But extreme weather conditions during the deciduous fruit growing season negatively affected export availability of some fruits.

Weather-damaged fruit is not exported, so although production of some fruits is up, exports may remain at 1991 levels.

As a result, domestic consumption and processing are expected to increase because of a larger supply of lower quality fruit--the main source of domestic supplies.

Meanwhile, the U.S. remains the largest single market for Chile's fruit exports. However, increasing demand from the EC and Central and East European countries combined may eventually surpass exports to the U.S., spurring further growth in Chile's exports.

Diversification has reduced the price variation of Chile's major agricultural exports, as indicated by a moving coefficient of variation of two different price indexes. The traditional export price index consists of a weighted average of the three traditional export crops. The total export price index represents the weighted average of seven crops, including three traditional and four nontraditional.