Required Report - public distribution

**Date:** 10/3/2005

**GAIN Report Number:** AR5028

AR5028

**Argentina**

**Canned Deciduous Fruit**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Robert Hoff

U.S. Embassy

**Prepared by:**

Francisco Pirovano

**Report Highlights:**

Calendar Year (CY) 2006 peach production is forecast at 140,000 metric
tons (MT), 65,000 MT will be processed. Exports are expected to remain
at levels similar to those of CY 2004. Imports will continue at low
level. Domestic consumption is forecast to increase as domestic prices
decrease in line with the international market price.

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)

[**Production areas 3**](#production-areas)

[**Production 3**](#production)

[**Consumption 3**](#consumption)

[**Trade 4**](#trade)

[**Imports and Exports Requirements
4**](#imports-and-exports-requirements)

[Prices 5](#prices)

[**Domestic Prices 5**](#domestic-prices)

[**International Prices 5**](#international-prices)

[**Production Cost 6**](#production-cost)

[Section II. Statistical Tables 7](#section-ii.-statistical-tables)

# Section I. Situation and Outlook

## 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 latest census carried out by the
Mendoza Provincial Government, there are 1360 farmers, with an average
farm size of 5.6 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 snow melt from the Andes. There are three main production zones
in the province of Mendoza, called oases.

The oldest and most traditional production zone, the southern zone,
encompasses the departments (counties) of San Rafael and General Alvear.
It has a total planted area of 3,163 hectares, 41 percent of the total
planted area in the Mendoza Province. Farms in this area are small, not
over three hectares, and are generally subsistence in nature. Production
is characteristically low tech with yields no higher than nine MT per
hectare.

The northern and eastern zones, with 2,136 hectares in production, have
an average farm size of five hectares. Yields in this zone reach 17 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 1,550 hectares, the average farm size in
this area is eight hectares, and yields reach 25 MT per hectare.

According to a survey carried out by the Rural Development Institute of
Mendoza (a private/public sector entity closely related to the
provincial Ministry of Economy) together with two industry NGOs, area
planted to peaches increased in CY 2005 by 105 hectares in the
Northeastern zone, and 245 hectares in the Uco Valley. Also, 10 and 41
hectares of old plantations will be eradicated in the northeastern and
southern zones, respectively.

## Production 

Industry sources report that the current development of the CY 2006 crop
will be nine percent lower than CY 2005 due to frost damage. Post
forecast total production at 140,000 MT (See statistical tables). 65,000
MT of peaches will be delivered to canneries.

Total production of fresh peaches in CY 2005 reached 153,000 MT. For CY
2005 total production suitable for canned peaches was 70,000 MT.

## Consumption

Per capita peach consumption fell from two and a half to one can in CY
2002. Domestic consumption is recovering and it is expected to reach one
and a half cans in CY 2005, due to the ongoing economic recovery. For
example, this year the GDP is forecast to grow for the third straight
year at eight percent. Total domestic consumption is forecast to
increase in CY 2005 to 42,000 MT.

## 

## 

## 

## Trade

CY 2006 canned peaches exports are forecast to be at 26,000 MT as there
will be less available fruit. Up to the end of July 2005, registered
canned peach exports reached 9,000 MT, 8,500 MT less than the same
period during CY 2004. Despite previous estimates CY 2005 exports will
not reach 35,000 MT, industry sources now expect CY 2005 exports to
barely surpass CY 2004, reaching 28,000 MT due to lower international
prices and the recovery of local consumption.

+--------------------+-------+-------+--------+-------+--------+-------+
| **Country**        | **2   |       | **     |       | **     |       |
|                    | 002** |       | 2003** |       | 2004** |       |
+--------------------+-------+-------+--------+-------+--------+-------+
|                    | **    | **    | *      | **    | *      | **    |
|                    | USD** | Quant | *USD** | Quant | *USD** | Quant |
|                    |       | ity** |        | ity** |        | ity** |
+--------------------+-------+-------+--------+-------+--------+-------+
| ######### World    | 6,76  | 1     | 18,8   | 3     | 17,3   | 2     |
|                    | 7,884 | 1,263 | 39,330 | 3,272 | 53,863 | 4,166 |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Mexico**         | 22    | 346   | 2,0    | 3,427 | 4,8    | 6,544 |
|                    | 1,421 |       | 41,976 |       | 73,066 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **EU**             | 10    | 213   | 5,2    | 8,935 | 4,9    | 7,197 |
|                    | 5,332 |       | 17,328 |       | 16,917 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Brazil**         | 3,61  | 5,837 | 2,4    | 4,280 | 1,8    | 2,220 |
|                    | 8,224 |       | 50,869 |       | 07,404 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Chile**          | 51    | 952   | 2,3    | 4,649 | 1,2    | 1,650 |
|                    | 1,754 |       | 66,904 |       | 11,399 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Thailand**       | 0     | 0     | 0      | 0     | 9      | 1,499 |
|                    |       |       |        |       | 36,312 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Paraguay**       | 47    | 802   | 3      | 577   | 5      | 701   |
|                    | 7,579 |       | 32,926 |       | 33,950 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **United States**  | 3     | 56    | 1,3    | 2,185 | 5      | 842   |
|                    | 2,375 |       | 04,754 |       | 18,797 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Bolivia**        | 26    | 444   | 4      | 778   | 4      | 619   |
|                    | 6,651 |       | 78,373 |       | 91,949 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Guatemala**      | 4     | 62    | 2      | 331   | 4      | 616   |
|                    | 0,718 |       | 05,421 |       | 52,459 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Uruguay**        | 1,23  | 2,037 | 5      | 918   | 3      | 452   |
|                    | 4,855 |       | 77,275 |       | 30,939 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Ecuador**        | 7     | 181   | 4      | 658   | 2      | 354   |
|                    | 8,407 |       | 15,186 |       | 91,600 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Israel**         | 3     | 71    | 4      | 858   | 2      | 391   |
|                    | 5,000 |       | 62,050 |       | 65,373 |       |
+--------------------+-------+-------+--------+-------+--------+-------+
| **Others**         | 14    | 263   | 3,0    | 5,677 | 7      | 1,080 |
|                    | 5,568 |       | 76,268 |       | 23,698 |       |
+--------------------+-------+-------+--------+-------+--------+-------+

## Imports and Exports Requirements 

+-----------------------------------------------------------+----------+
| ###### Outside the Mercosur Area                          |          |
+-----------------------------------------------------------+----------+
| Import Tariff                                             | 14 %     |
+-----------------------------------------------------------+----------+
| Specific Minimum Import Tariff US\$/Kg.                   | 0        |
+-----------------------------------------------------------+----------+
| Statistical Tax                                           | 0.50%    |
+-----------------------------------------------------------+----------+
| Export Tax                                                | 5.00%    |
+-----------------------------------------------------------+----------+
| Rebates                                                   | 4.05%    |
|                                                           |          |
| Containers with more than 2.5 kg.                         | 6.00%    |
|                                                           |          |
| Containers with 2.5 kg. or less                           |          |
+-----------------------------------------------------------+----------+
| ###### Inside the Mercosur Area                           |          |
+-----------------------------------------------------------+----------+
| Import Tariff                                             | 0.00%    |
+-----------------------------------------------------------+----------+
| Export Tax                                                | 5.00%    |
+-----------------------------------------------------------+----------+
| Rebate                                                    | 4.05%    |
|                                                           |          |
| Containers with more than 2.5 kg.                         | 6.00%    |
|                                                           |          |
| Containers with 2.5 kg. or less                           |          |
+-----------------------------------------------------------+----------+

# Prices

## Domestic Prices

+------------------+------+-------+--------+--------+-------+--------+
| **850 grams net  | #### |       | **O    |        | *     |        |
| weigh can**      | ## D |       | ctober |        | *Sept |        |
|                  | ec.  |       | 2004** |        | ember |        |
|                  | 2003 |       |        |        | 2     |        |
|                  |      |       | **     |        | 005** |        |
|                  | **   |       | (1US\$ |        |       |        |
|                  | (1\$ |       | = 2.96 |        | **(   |        |
|                  | = 3  |       | A      |        | 1US\$ |        |
|                  | AR\  |       | R\$)** |        | =     |        |
|                  | $)** |       |        |        | 2.90  |        |
|                  |      |       |        |        | AR    |        |
|                  |      |       |        |        | \$)** |        |
+------------------+------+-------+--------+--------+-------+--------+
| **Brand**        | **AR | **U   | **     | #####  | **A   | #####  |
|                  | \$** | S\$** | AR\$** | # US\$ | R\$** | # US\$ |
+------------------+------+-------+--------+--------+-------+--------+
| **La             | 3.19 | 1.03  | 4.44   | 1.50   | 3.65  | 1.26   |
| Campagnola**     |      |       |        |        |       |        |
+------------------+------+-------+--------+--------+-------+--------+
| **Arcor**        | 3.19 | 1.03  | 4.29   | 1.45   | 3.30  | 1.14   |
+------------------+------+-------+--------+--------+-------+--------+
| **Canale**       | 2.99 | 0.99  | 3.39   | 1.15   | 3.00  | 1.03   |
+------------------+------+-------+--------+--------+-------+--------+
| **Alco**         | 2.99 | 0.99  | 3.39   | 1.15   | 3.29  | 1.13   |
+------------------+------+-------+--------+--------+-------+--------+
| **Molto**        | 2.89 | 0.96  | 3.29   | 1.11   | 2.59  | 0.89   |
+------------------+------+-------+--------+--------+-------+--------+
| **Santa Isabel** | 3.09 | 1.03  | 3.59   | 1.21   | 3.20  | 1.10   |
+------------------+------+-------+--------+--------+-------+--------+
| **Average        | 3.06 | 1.02  | 3.73   | 1.26   | 3.17  | 1.09   |
| price**          |      |       |        |        |       |        |
+------------------+------+-------+--------+--------+-------+--------+

## International Prices

+--------------------------+--------------+----------------+----------+
| #                        |              |                |          |
| ####### **Prices Table** |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Country**              | ######## *   |                |          |
|                          | *Argentina** |                |          |
+--------------------------+--------------+----------------+----------+
| **Commodity**            | ####         |                |          |
|                          | #### **Peach |                |          |
|                          | es, Canned** |                |          |
+--------------------------+--------------+----------------+----------+
| **Prices in**            | **US\$ FOB** | **per uom**    | **MT**   |
+--------------------------+--------------+----------------+----------+
|                          |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Year**                 | **2004**     | **2005**       | **%      |
|                          |              |                | Change** |
+--------------------------+--------------+----------------+----------+
| **Jan**                  | 740          | 700            | -5%      |
+--------------------------+--------------+----------------+----------+
| **Feb**                  | 700          | 700            | 0%       |
+--------------------------+--------------+----------------+----------+
| **Mar**                  | 670          | 610            | -9%      |
+--------------------------+--------------+----------------+----------+
| **Apr**                  | 700          | 630            | -10%     |
+--------------------------+--------------+----------------+----------+
| **May**                  | 710          | 640            | -10%     |
+--------------------------+--------------+----------------+----------+
| **Jun**                  | 680          | 690            | 1%       |
+--------------------------+--------------+----------------+----------+
| **Jul**                  | 720          | 710            | -1%      |
+--------------------------+--------------+----------------+----------+
| **Aug**                  | 780          |                | -100%    |
+--------------------------+--------------+----------------+----------+
| **Sep**                  | 780          |                | -100%    |
+--------------------------+--------------+----------------+----------+
| **Oct**                  | 780          |                | -100%    |
+--------------------------+--------------+----------------+----------+
| **Nov**                  | 840          |                | -100%    |
+--------------------------+--------------+----------------+----------+
| **Dec**                  | 780          |                | -100%    |
+--------------------------+--------------+----------------+----------+
|                          |              |                |          |
+--------------------------+--------------+----------------+----------+
| **Exchange Rate**        | 2.9          | Local          |          |
|                          |              | Currency/US \$ |          |
+--------------------------+--------------+----------------+----------+
| **Date of Quote**        | 9/30/2005    | MM/DD/YYYY     |          |
+--------------------------+--------------+----------------+----------+

##  Production Cost

+---------------------------+------------------------------------------+
| **PEACH COST - CARTON 24  |                                          |
| X 1 - LIGHT SYRUP (14-16° |                                          |
| BRIX)**                   |                                          |
+---------------------------+------------------------------------------+
| **STANDARD QUALITY - CY   |                                          |
| 2005**                    |                                          |
+---------------------------+------------------------------------------+
| ######### Inputs          | **US\$**                                 |
+---------------------------+------------------------------------------+
| **Raw material**          | 0.147                                    |
+---------------------------+------------------------------------------+
| **Sugar**                 | 0.011                                    |
+---------------------------+------------------------------------------+
| **Corn syrup**            | 0.010                                    |
+---------------------------+------------------------------------------+
| **Tin plate**             | 0.155                                    |
+---------------------------+------------------------------------------+
| **Paperboard**            | 0.012                                    |
+---------------------------+------------------------------------------+
| **Labels**                | 0.008                                    |
+---------------------------+------------------------------------------+
| **Labor**                 | 0.035                                    |
+---------------------------+------------------------------------------+
| **Energy / Fuel**         | 0.005                                    |
+---------------------------+------------------------------------------+
| **Subtotal**              | 0.383                                    |
+---------------------------+------------------------------------------+
| **Other inputs**          | 0.022                                    |
+---------------------------+------------------------------------------+
| **Total direct cost**     | 0.405                                    |
+---------------------------+------------------------------------------+
|                           |                                          |
+---------------------------+------------------------------------------+
| **Indirect cost**         | 0.125                                    |
+---------------------------+------------------------------------------+
|                           |                                          |
+---------------------------+------------------------------------------+
| **Freight to Buenos       | 0.020                                    |
| Aires**                   |                                          |
+---------------------------+------------------------------------------+
| **Total cost**            | 0.550                                    |
+---------------------------+------------------------------------------+

# Section II. Statistical Tables

+--------------+------+------+------+------+------+------+----------+
| ######## *   |      |      |      |      |      |      |          |
| *PSD Table** |      |      |      |      |      |      |          |
+--------------+------+------+------+------+------+------+----------+
| **Country**  | ##   |      |      |      |      |      |          |
|              | #### |      |      |      |      |      |          |
|              | ## * |      |      |      |      |      |          |
|              | *Arg |      |      |      |      |      |          |
|              | enti |      |      |      |      |      |          |
|              | na** |      |      |      |      |      |          |
+--------------+------+------+------+------+------+------+----------+
| *            | #### |      |      |      | **   |      |          |
| *Commodity** | #### |      |      |      | (MT) |      |          |
|              |  **P |      |      |      | (MT, |      |          |
|              | each |      |      |      | Net  |      |          |
|              | es,  |      |      |      | W    |      |          |
|              | Cann |      |      |      | eigh |      |          |
|              | ed** |      |      |      | t)** |      |          |
+--------------+------+------+------+------+------+------+----------+
|              | **20 | **R  | **20 | **Es | **20 | **Fo | **UOM**  |
|              | 03** | evis | 04** | tima | 05** | reca |          |
|              |      | ed** |      | te** |      | st** |          |
+--------------+------+------+------+------+------+------+----------+
|              | **   | **   | **   | **   | **   | **   |          |
|              | USDA | Post | USDA | Post | USDA | Post |          |
|              | Offi | Es   | Of   | Es   | Offi | Es   |          |
|              | cial | tima | fici | tima | cial | tima |          |
|              | \    | te** | al** | te** | \    | te** |          |
|              | [Old |      |      |      | [Old |      |          |
|              | \]** | **\  | **\  | **\  | \]** | **\  |          |
|              |      | [New | [Old | [New |      | [New |          |
|              |      | \]** | \]** | \]** |      | \]** |          |
+--------------+------+------+------+------+------+------+----------+
| **Market     |      | **0  |      | **0  |      | **0  | **M      |
| Year Begin** |      | 1/20 |      | 1/20 |      | 1/20 | M/YYYY** |
|              |      | 04** |      | 05** |      | 06** |          |
+--------------+------+------+------+------+------+------+----------+
| Deliv. To    | 12   | 12   | 12   | 15   | 0    | 14   | (MT)     |
| Processors   | 0000 | 0000 | 0000 | 3000 |      | 0000 |          |
+--------------+------+------+------+------+------+------+----------+
| Beginning    | 1    | 594  | 1    | 1594 | 1    | 1594 | (MT, Net |
| Stocks       | 0574 |      | 0074 |      | 0074 |      | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| Production   | 6    | 6    | 7    | 7    | 0    | 6    | (MT, Net |
|              | 5000 | 5000 | 0000 | 0000 |      | 5000 | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| Imports      | 0    | 0    | 0    | 0    | 0    | 0    | (MT, Net |
|              |      |      |      |      |      |      | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| TOTAL SUPPLY | 7    | 6    | 8    | 7    | 1    | 6    | (MT, Net |
|              | 5574 | 5594 | 0074 | 1594 | 0074 | 9594 | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| Exports      | 3    | 2    | 4    | 2    | 0    | 2    | (MT, Net |
|              | 5000 | 4000 | 0000 | 8000 |      | 6000 | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| Domestic     | 3    | 4    | 3    | 4    | 0    | 4    | (MT, Net |
| Consumption  | 0500 | 0000 | 0000 | 2000 |      | 0000 | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| Ending       | 1    | 1594 | 1    | 1594 | 0    | 594  | (MT, Net |
| Stocks       | 0074 |      | 0074 |      |      |      | Weight)  |
+--------------+------+------+------+------+------+------+----------+
| TOTAL        | 7    | 6    | 8    | 7    | 0    | 6    | (MT, Net |
| DISTRIBUTION | 5574 | 5594 | 0074 | 1594 |      | 6594 | Weight)  |
+--------------+------+------+------+------+------+------+----------+