Required Report - Public distribution

**Date:** 10/7/2008

**GAIN Report Number:** AR8040

AR8040

**Argentina**

**Canned Deciduous Fruit**

**Canned Peaches**

**2008**

**Approved by:**

![](media/image1.wmf)David Mergen

U.S. Embassy

**Prepared by:**

Maria Julia Balbi

**Report Highlights:**

CY 2009 peach production is estimated at 159,500 MT, of which 84,000
will be processed into canned peaches. Canned peach exports are expected
to increase to 41,500 MT, compared to CY 2008, primarily due to
increased production and because the local industry is actively working
on gaining access to new foreign markets. Domestic consumption for CY
2009 is forecast to continue increasing gradually due to a higher
purchasing power.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Buenos Aires \[AR1\]

\[AR\]

Table of Contents

[**Section I. Situation and Outlook
3**](#section-i.-situation-and-outlook)

[Executive Summary 3](#executive-summary)

[Production areas 3](#production-areas)

[Production 3](#production)

[Consumption 4](#consumption)

[Trade 4](#trade)

[Import and Export Requirements 5](#import-and-export-requirements)

[Fresh Peach Farm-Gate Prices 5](#fresh-peach-farm-gate-prices)

[Production Costs 5](#production-costs)

[Domestic Retail Prices 6](#domestic-retail-prices)

[International Prices 6](#international-prices)

[Section II. Statistical Table 7](#section-ii.-statistical-table)

# Section I. Situation and Outlook

## 

## Executive Summary

## 

Post forecasts an increase in production for CY 2009 of 1,000 MT to
84,000 MT due to higher efficiency and new plantations entering
production. Domestic consumption is expected to increase as a result of
a sustained recovery of purchasing power, and exports are also estimated
to increase due to increased production and the search for access to new
foreign markets.

## 

## Production areas

Canned peaches are mainly produced in Mendoza Province, located
alongside the Andes mountains. According to up-to-date official numbers,
7,600 hectares are currently planted with cling peaches in this
province. Based on data from the 2007 census carried out by the Rural
Development Institute of Mendoza (IDR, in Spanish - a private/public
sector entity closely related to the provincial Ministry of Economy) and
the Processed Fruit Chamber of Mendoza (CAFIM, in Spanish), there are
1,129 producers, with an average farm size of 5.7 hectares.

Since Mendoza is a very dry province with an annual average rainfall of
8 inches or less, all plantations are irrigated. The main source of
water is snowmelt from the Andes. There are three main production areas
in the Province of Mendoza, called oases.

The oldest and most traditional production area, the southern zone,
encompasses the departments (counties) of San Rafael and General Alvear.
It has a total planted area of 2,724 hectares, of which the Mendoza
Province accounts for 36 percent. Farms in this area are small, not over
3 hectares, and are generally subsistent in nature. Production is
basically low tech with yields no higher than 14.9 MT per hectare.

The northern and eastern zones, with 2,080 hectares in production, have
an average farm size of 8.7 hectares. Yields in this zone reach 15.1 MT
per hectare, which reflect the use of yield improving technology.

The last zone, the Uco Valley, is where more developed and active
farmers have settled during the past 20 years. Also, larger plantations,
most of them owned by canneries, have been established in this zone.
With a total planted area of 2,813 hectares, the average farm size in
this area is 16.5 hectares, and yields reach 31.6 MT per hectare.

According to a survey carried out by IDR together with two industry
NGOs, in CY 2007, area planted to peaches decreased by 57 hectares in
the northeastern zone and 438 hectares in the southern zone, and
increased by 515 hectares in the Uco Valley. Also, 51 and 26 hectares of
old plantations were eradicated in the northeastern and southern zones,
respectively, while only 19 hectares were eradicated in the Uco Valley.
Although the area planted remained stable, the quality of crops improved
significantly.

## 

## Production 

CY 2009 production is estimated to increase marginally to 159,500 MT,
compared to the previous year, due to higher efficiency and new
plantations entering production. Of that amount, 84,000 MT will be used
for canned peaches. Post estimates total production for CY 2008 at
159,000 MT, of which 83,000 MT will be canned peaches. However, frosts
may still occur in October; therefore, total peach production may vary
largely depending on the weather conditions in the next few months.

## 

## Consumption

Total domestic consumption for 2009 is forecast to increase slightly to
43,000 MT due to a sustained recovery of purchasing power. In CY 2008,
domestic consumption will also show a slight recovery, compared to the
previous year. Annual per capita consumption is expected to reach 1.75
cans due to the improved economic situation. Total domestic consumption
is forecast to increase in CY 2008 to 42,500 MT.

## 

## Trade

CY 2009 canned peach exports are estimated to increase marginally to
41,500 MT, primarily due to increased production and because the local
industry is actively working on gaining access to new foreign markets.
CY 2008 exports are forecast at 40,000 MT, down 2,000 MT compared to the
previous year, as domestic consumption is competing strongly with
exports**.**

Mexico and Brazil are the main markets for Argentine canned peaches. An
agreement between the Governments of Argentina and Mexico establishes an
annual quota of 10,000 MT at a zero tariff (the import tariff in Mexico
is seven percent). This quota is allocated by the Secretariat of
Agriculture of Argentina which gives priority to those canneries that
have exported canned peaches to a third country in the past four years.
Only 15 percent of the quota will be allocated to companies that have
not previously exported their product. Representatives of the Federation
of the Processed Peach Strategic Plan (FEPEDI, in Spanish) have recently
traveled to Mexico to negotiate an increase of the 10,000 MT-zero tariff
quota to 15,000 MT.

  ------------- ------------- ---------- ---------- ------- -------------- ---------- ---------- ------- -------------- ---------- ---------- ------- -------------- --
                **Canned                                                                                                                                             
                Peach                                                                                                                                                
                Exports**                                                                                                                                            

                **Country**              **2005**                                     **2006**                                     **2007**                          

                                         **USD**            **Quantity**              **USD**            **Quantity**              **USD**            **Quantity**   

  Total                       12382922              18187                  25658833              34358                  30587972              32473                  

  Mexico                      4403432               6319                   7261170               9852                   13466269              14295                  

  Brazil                      2059936               2718                   9123252               11365                  6189601               6306                   

  Paraguay                    928757                1393                   1512748               2011                   2968727               3033                   

  Uruguay                     1135662               1685                   2072982               3042                   2604076               2816                   

  Bolivia                     661444                895                    947160                1207                   1948130               1934                   

  Thailand                    485963                864                    638678                1055                   1472524               2109                   

  Chile                       579501                815                    1556415               2052                   788420                823                    

  Guatemala                   382063                561                    500869                704                    295017                311                    

  Colombia                    0                     0                      274912                319                    274165                215                    

  Peru                        48215                 56                     60228                 72                     255583                209                    

  United States               64747                 97                     1007814               1715                   93780                 162                    

  Canada                      0                     0                      11019                 18                     67515                 93                     

  Ecuador                     57944                 88                     114564                149                    43025                 48                     

  EU                          104679                152                    102726                142                    38524                 39                     

  Panama                      56568                 89                     190912                236                    18438                 10                     

  Costa Rica                  12403                 18                     25400                 36                     18109                 25                     

  Venezuela                   4557                  7                      23946                 35                     17835                 17                     

  Puerto Rico                 17235                 20                     23542                 28                     10276                 13                     

  Dominican                   2648                  4                      15120                 20                     9600                  9                      
  Rep.                                                                                                                                                               

  Angola                      36180                 53                     87563                 134                    1092                  1                      

  Honduras                    13518                 18                     8441                  11                     0                     0                      

  Egypt                       59400                 106                    0                     0                      0                     0                      

  South Korea                 187337                300                    10146                 17                     0                     0                      

  Taiwan                      52258                 89                     0                     0                      0                     0                      

  Philippines                 951864                1714                   0                     0                      0                     0                      

  Russia                      41415                 71                     72450                 124                    0                     0                      

                                                                                                                                                                     

  Others                      35196                 55                     16776                 14                     7266                  5                      
  ------------- ------------- ---------- ---------- ------- -------------- ---------- ---------- ------- -------------- ---------- ---------- ------- -------------- --

Source: Global Trade Atlas

## 

## Import and Export Requirements 

## 

+----------------------------------------------------------------+-----+
| ###### Canned Peaches 2008.70                                  |     |
+----------------------------------------------------------------+-----+
| ###### Outside the Mercosur Area                               |     |
+----------------------------------------------------------------+-----+
| Import Tariff                                                  | 14  |
|                                                                | %   |
+----------------------------------------------------------------+-----+
| Statistical Tax                                                | 0.  |
|                                                                | 50% |
+----------------------------------------------------------------+-----+
| Export Tax                                                     | 5.  |
|                                                                | 00% |
+----------------------------------------------------------------+-----+
| Export Rebates                                                 | 4.  |
|                                                                | 05% |
| Containers with more than 2.5 kg.                              |     |
|                                                                | 6.  |
| Containers with 2.5 kg. or less                                | 00% |
+----------------------------------------------------------------+-----+
| ###### Inside the Mercosur Area                                |     |
+----------------------------------------------------------------+-----+
| Import Tariff                                                  | 0.  |
|                                                                | 00% |
+----------------------------------------------------------------+-----+
| Export Tax                                                     | 5.  |
|                                                                | 00% |
+----------------------------------------------------------------+-----+
| Export Rebates                                                 | 4.  |
|                                                                | 05% |
| Containers with more than 2.5 kg.                              |     |
|                                                                | 6.  |
| Containers with 2.5 kg. or less                                | 00% |
+----------------------------------------------------------------+-----+

## Fresh Peach Farm-Gate Prices

## 

Canned peach prices during January-July 2008 were between 10 percent (in
April) and 47 percent (in January) higher than the same period in
2007**.** According to private sources, CY 2008 farm-gate prices are
higher than in 2007, but net income for producers will decrease
marginally, compared to CY 2007, due to a relatively high inflation rate
and higher production costs. In CY 2008, farm-gate fresh fruit prices
for canned peaches varied between US\$0.37 and US\$0.39 per kilogram.

## Production Costs

The production costs that showed higher increases in CY 2008 were raw
material, manual labor, tin plates, sugar, and corn syrup. In average,
production costs increased by 25 percent.

## Domestic Retail Prices

+----------------+--------+-------+--------+--------+-------+--------+
| **820-gram can | **Sep  |       | **Sep  |        | *     |        |
| (net weight)** | tember |       | tember |        | *Sept |        |
|                | 2006** |       | 2007** |        | ember |        |
|                |        |       |        |        | 2     |        |
|                | **     |       | **     |        | 008** |        |
|                | (1US\$ |       | (1US\$ |        |       |        |
|                | =      |       | =      |        | **(   |        |
|                | 3.10A  |       | 3.17A  |        | 1US\$ |        |
|                | R\$)** |       | R\$)** |        | =     |        |
|                |        |       |        |        | 3     |        |
|                |        |       |        |        | .16AR |        |
|                |        |       |        |        | \$)** |        |
+----------------+--------+-------+--------+--------+-------+--------+
| **Brand**      | **     | #     | **     | #####  | **A   | #####  |
|                | AR\$** | ##### | AR\$** | # US\$ | R\$** | # US\$ |
|                |        |  US\$ |        |        |       |        |
+----------------+--------+-------+--------+--------+-------+--------+
| **La           | 3.99   | 1.29  | 6.15   | 1.94   | 7.99  | 2.53   |
| Campagnola**   |        |       |        |        |       |        |
+----------------+--------+-------+--------+--------+-------+--------+
| **Arcor**      | 3.49   | 1.12  | 5.8    | 1.83   | n/a   | n/a    |
+----------------+--------+-------+--------+--------+-------+--------+
| **Canale**     | 3.99   | 1.29  | 6.2    | 1.96   | 7.29  | 2.31   |
+----------------+--------+-------+--------+--------+-------+--------+
| **Alco**       | 3.59   | 1.16  | 5.99   | 1.89   | 6.59  | 2.09   |
+----------------+--------+-------+--------+--------+-------+--------+
| **Molto**      | 4.29   | 1.38  | 6.5    | 2.05   | n/a   | n/a    |
+----------------+--------+-------+--------+--------+-------+--------+
| **Santa        | 3.39   | 1.09  | 5.4    | 1.70   | n/a   | n/a    |
| Isabel**       |        |       |        |        |       |        |
+----------------+--------+-------+--------+--------+-------+--------+
| **Prima        | n/a    | n/a   | n/a    | n/a    | 5.79  | 1.83   |
| (Imported fm.  |        |       |        |        |       |        |
| Greece)**      |        |       |        |        |       |        |
+----------------+--------+-------+--------+--------+-------+--------+
| **Average      | 3.79   | 1.22  | 6.0    | 1.89   | 6.92  | 2.19   |
| price**        |        |       |        |        |       |        |
+----------------+--------+-------+--------+--------+-------+--------+

## 

## International Prices

+--------------------------+--------------+----------------+----------+
| #                        |              |                |          |
| ####### **Prices Table** |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Country**              | ######## *   |                |          |
|                          | *Argentina** |                |          |
+--------------------------+--------------+----------------+----------+
| **Commodity**            | ####         |                |          |
|                          | #### **Peach |                |          |
|                          | es, Canned** |                |          |
+--------------------------+--------------+----------------+----------+
| **Prices in**            | **US\$ FOB** | **per uom**    | **MT**   |
+--------------------------+--------------+----------------+----------+
|                          |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Year**                 | **2007**     | **2008**       | **%      |
|                          |              |                | Change** |
+--------------------------+--------------+----------------+----------+
| **Jan**                  | 675          | 993            | 47       |
+--------------------------+--------------+----------------+----------+
| **Feb**                  | 927          | 1091           | 17.5     |
+--------------------------+--------------+----------------+----------+
| **Mar**                  | 909          | 1117           | 23       |
+--------------------------+--------------+----------------+----------+
| **Apr**                  | 980          | 1079           | 10       |
+--------------------------+--------------+----------------+----------+
| **May**                  | 940          | 1109           | 18       |
+--------------------------+--------------+----------------+----------+
| **Jun**                  | 955          | 1195           | 25       |
+--------------------------+--------------+----------------+----------+
| **Jul**                  | 939          | 1174           | 25       |
+--------------------------+--------------+----------------+----------+
| **Aug**                  | 937          | n/a            | -100%    |
+--------------------------+--------------+----------------+----------+
| **Sep**                  | 926          | n/a            | -100%    |
+--------------------------+--------------+----------------+----------+
| **Oct**                  | 986          | n/a            | -100%    |
+--------------------------+--------------+----------------+----------+
| **Nov**                  | 933          | n/a            | -100%    |
+--------------------------+--------------+----------------+----------+
| **Dec**                  | 1009         | n/a            | -100%    |
+--------------------------+--------------+----------------+----------+
|                          |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Exchange Rate**        | 3.16         | Local          |          |
|                          |              | Currency/US \$ |          |
+--------------------------+--------------+----------------+----------+
| **Date of Quote**        | 10/02/2008   | MM/DD/YYYY     |          |
+--------------------------+--------------+----------------+----------+

**Source: Global Trade Atlas**

# Section II. Statistical Table

![](media/image2.wmf){width="6.496527777777778in"
height="1.8736111111111111in"}

#