Chile: cautious enthusiasm

I had called our good friend Manuel Alcaino at Decofruit in Santiago, inquiring about the effect of currency swings on Chile's exporters. He was out when I called and I didn't get a chance to include his thoughts in a story I did for The Packer this week. I've posted this email to me on the topic for the benefit of Fresh Talk readers. From Manuel:


I think there is some cautious enthusiasm regarding the devaluation of the peso.

Today reached 650!!!

It is obviously an interesting scenario provided that there is no cataclysm.

The industry needs capital to operate, liquidity and the fruit needs to be sold upon arrival.

We still think that we are in better shape compared to other industries, such as high priced wines, expensive (gourmet) products, or industrialized goods.

People in the US and in Europe will continue eating, and our products (across the board) are first necessity. Still I believe that buyers will enter supermarkets with a restrictive attitude which might affect demand.

Oil is another interesting aspect, 70/80 U$ the barrel impacts positively the freight costs.

All in all they look as good things happening to the fruit export business (compared to other industries), provided as I said the conditions allow the system to operate.

In relation to diverting volumes, I see a recuperation of the volumes in the US but within normal overall figures. No radical changes. Don´t forget that the whole economy of the country is indexed to the dollar, so sales to Asia or Europe, are mostly conducted in US currency.