Required Report - public distribution

**Date:** 10/13/2006

**GAIN Report Number:** AR6037

AR6037

**Argentina**

**Dried Fruit**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Kari Rojas

U.S. Embassy

**Prepared by:**

Francisco Pirovano

**Report Highlights:**

Calendar Year (CY) 2007 plum production is forecast at 125,000 metric
tons (MT) of which 115,000 MT will be processed. Exports are expected to
increase due to high international prices. Imports are almost
non-existent and domestic consumption is expected to remain at a level
similar to that of previous years.

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)

[Varieties 4](#varieties)

[Consumption 4](#consumption)

[Trade 4](#trade)

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

[Prices 4](#prices)

[International Prices 4](#international-prices)

[Section II. Statistical Tables 4](#section-ii.-statistical-tables)

# Section I. Situation and Outlook

## Production areas

Ninety percent of Argentine dried plums are produced in the Province of
Mendoza, which is located alongside the Andes Mountains. According to
official numbers, 12,400 hectares are currently planted with plums in
this province. Since Mendoza is a very dry province, with annual average
rainfall of 8 inches or less, all plantations are irrigated. The main
source of water is melted snow 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 9,550 hectares, 77 percent of the total
planted area in the Province of Mendoza. Farms in this area are small,
not over 2.8 hectares, and are generally subsistence in nature.
Production is characteristically low tech with yields no greater than 6
MT per hectare. With regards to the age of the plantations, 6,500
hectares are in the productive range between 6 and 30 years old, 2,500
hectares are younger than 5 years and 550 hectares are older than 30
years old.

In the eastern zone, with 2,600-planted hectares, the average farm size
is three hectares. Yields in this zone go as high as seven metric tons
per hectare. Plantations between 6 and 30 years old occupy 2,000
hectares, those younger than 5 years old occupy 500 hectares, and those
older than 30 years old occupy 100 hectares.

The last zone, the Uco Valley, is where better-trained and
entrepreneurial farmers have settled during the past 20 years. With a
total planted area of 250 hectares, the average farm size in this area
is 5.2 hectares and yields reach 15 MT per hectare.

The other ten percent of the Argentina dried plums are produced in the
southern valley of Rio Negro and Neuquen where the main variety is
President.

## Production 

In Argentina the harvest season begins on January 15 and ends on
February 15. This short period makes it difficult to plan processing
activities. Farmers are obliged to sell their produce to processors
sometimes at not very good prices. Sources in the industry inform that
the Argentina National Agricultural Research Institute (INTA) is working
on the promotion of new varieties with which would allow to extend the
harvest period.

Currently, trees are still in blossom, and the CY 2007 crop is
developing. Sources in the industry report that the CY 2007 crop will
probably be similar or slightly superior to the previous season's
production due to more plants entering into production. Fresh plums
production is forecast at 125,000 MT with a dry plums production at
38,000 MT. (See statistical tables).

Total production of fresh plums in CY 2006 reached 115,000 MT. Total
production destined for processing was 105,000 MT. According to sources
in the industry, three kilos of fresh plums yield one kilo of dried
plums. Therefore, total production of dried plums for CY 2006 has been
estimated at 35,000 MT.

In Argentina, drying technology is still very traditional with 73
percent of the prunes dried in the sun on nets hanging from a frame, and
only 23 percent in ovens, which run mainly on natural gas.

According to official data, in Argentina there are 3,900 farmers that
produce plums with an average grove size of 7 hectares, and 20
processors of which only seven export 70 percent of the total
production.

Another hey characteristic of this sector is the lack of associations or
cooperatives that help farmers and processors work better.

## Consumption

Domestic consumption of prunes in Argentina is limited to prunes in
syrup. Domestic consumption of dried prunes is estimated at 40 grams per
capita per year, which means a total of 1,600 MT, destined to direct
consumption. Also, the processing sector purchases between 400 and 600
MT per year.

## Trade

CY 2007 exports are expected to grow to 35,000 MT as a result of higher
production and the good international market price. Through August 2006,
registered dried prune exports reached 23,000 MT, 10,000 MT more than
during the same period in CY 2005. CY 2005 export volume was 23,000 MT
valued at US\$48 million. However, industry sources expect that in CY
2006 prune exports will surpass CY 2005 numbers by 7,000 MT, reaching a
total of 30,000 MT. In CY 2006 export values increased as a result of
high international prices. Although in CY 2005 the averaged FOB price
was higher than in CY 2006, US\$2.07 per MT and US\$1.98 per MT, this
price is still competitive at an international level.

+-----------------+---------+------+---------+------+---------+------+
| **Argentina     |         |      |         |      |         |      |
| Export          |         |      |         |      |         |      |
| Statistics**    |         |      |         |      |         |      |
+-----------------+---------+------+---------+------+---------+------+
| **Commodity:    |         |      |         |      |         |      |
| 081320, Prunes, |         |      |         |      |         |      |
| Dried**         |         |      |         |      |         |      |
+-----------------+---------+------+---------+------+---------+------+
|                 | *       |      | *       |      | *       |      |
|                 | *2003** |      | *2004** |      | *2005** |      |
+-----------------+---------+------+---------+------+---------+------+
|                 | **      | **Q  | **      | **Qu | **      | **   |
|                 | Value** | uant | Value** | anti | Value** | Quan |
|                 |         | ity\ |         | ty** |         | tity |
|                 | **(     | (M   | **(     |      | **(     | (M   |
|                 | US\$)** | T)** | US\$)** | **(M | US\$)** | T)** |
|                 |         |      |         | T)** |         |      |
+-----------------+---------+------+---------+------+---------+------+
| **World**       | 32,     | 28   | 25,     | 15   | 47,     | 23   |
|                 | 559,105 | ,819 | 117,821 | ,086 | 830,809 | ,014 |
+-----------------+---------+------+---------+------+---------+------+
| **Brazil**      | 8,      | 8    | 9,      | 6    | 15,     | 8    |
|                 | 388,770 | ,575 | 307,118 | ,011 | 265,987 | ,158 |
+-----------------+---------+------+---------+------+---------+------+
| **EU**          | 14,     | 11   | 7,      | 4    | 14,     | 6    |
|                 | 230,930 | ,576 | 181,466 | ,031 | 785,410 | ,578 |
+-----------------+---------+------+---------+------+---------+------+
| **Russia**      | 6,      | 5    | 4,      | 2    | 6,      | 2    |
|                 | 709,892 | ,303 | 525,822 | ,809 | 282,707 | ,564 |
+-----------------+---------+------+---------+------+---------+------+
| **Chile**       | 1,      | 1    | 314,342 | 297  | 2,      | 1    |
|                 | 282,170 | ,487 |         |      | 558,549 | ,739 |
+-----------------+---------+------+---------+------+---------+------+
| **United        | 46,757  | 35   | 2,      | 909  | 2,      | 983  |
| States**        |         |      | 003,003 |      | 404,823 |      |
+-----------------+---------+------+---------+------+---------+------+
| **Algeria**     | 510,166 | 415  | 654,469 | 411  | 1,      | 482  |
|                 |         |      |         |      | 054,279 |      |
+-----------------+---------+------+---------+------+---------+------+
| **Venezuela**   | 6,760   | 5    | 4,100   | 2    | 850,561 | 385  |
+-----------------+---------+------+---------+------+---------+------+
| **Egypt**       | 53,400  | 40   | 0       | 0    | 836,803 | 399  |
+-----------------+---------+------+---------+------+---------+------+
| **Canada**      | 26,802  | 22   | 522,032 | 254  | 747,537 | 316  |
+-----------------+---------+------+---------+------+---------+------+
| **Others**      | 1,      | 1    | 605,469 | 362  | 3,      | 1    |
|                 | 303,458 | ,362 |         |      | 044,153 | ,410 |
+-----------------+---------+------+---------+------+---------+------+

## Imports and Exports Requirements 

+------------------------------------------------------------+---------+
| ###### Outside the Mercosur Area                           |         |
+------------------------------------------------------------+---------+
| Import Tariff                                              | 10 %    |
+------------------------------------------------------------+---------+
| Statistical Tax                                            | 0.50%   |
+------------------------------------------------------------+---------+
| Export Tax                                                 | 5.00%   |
+------------------------------------------------------------+---------+
| Rebates: Cases with more than 1 kg.                        | 5.00%   |
|                                                            |         |
| Cases with 1 kg. or less                                   | 6.00%   |
+------------------------------------------------------------+---------+
| ###### Inside the Mercosur Area                            |         |
+------------------------------------------------------------+---------+
| Import Tariff                                              | 0.00%   |
+------------------------------------------------------------+---------+
| Export Tax                                                 | 5.00%   |
+------------------------------------------------------------+---------+
| Rebate: Cases with more than 1 kg.                         | 5.00%   |
|                                                            |         |
| Cases with 1 kg. or less                                   | 6.00%   |
+------------------------------------------------------------+---------+

## 

## Prices

# Farm-Gate Prices

Prunes are paid by the kilo of fresh fruit and not based on dry fruit as
in the rest of the world. This system does not pay for the quality of
the dry product but only for the visual aspect and sugar content of the
fresh fruit.

The prices paid to farmers for their fresh plums reached a record high
of US\$0.32 per kilo during the 2005 season. Average farm-gate price is
around US\$0.16 per kilo.

## International Prices

+--------------------+-------------------+------------------+---------+
| **Prices Table**   |                   |                  |         |
+--------------------+-------------------+------------------+---------+
| **Country**        | #####             |                  |         |
|                    | ### **Argentina** |                  |         |
+--------------------+-------------------+------------------+---------+
| **Commodity**      | **Prunes (Plums,  |                  |         |
|                    | Dried)**          |                  |         |
+--------------------+-------------------+------------------+---------+
| **Prices in**      | **US\$ FOB**      | **per uom**      | **MT**  |
+--------------------+-------------------+------------------+---------+
|                    |                   |                  |         |
+--------------------+-------------------+------------------+---------+
| Year               | **2004**          | **2005**         | **%     |
|                    |                   |                  | C       |
|                    |                   |                  | hange** |
+--------------------+-------------------+------------------+---------+
| Jan                | 1.93              | 2.20             | 12.3%   |
+--------------------+-------------------+------------------+---------+
| Feb                | 1.82              | 2.02             | 9.9%    |
+--------------------+-------------------+------------------+---------+
| Mar                | 2.11              | 2.19             | 3.7%    |
+--------------------+-------------------+------------------+---------+
| Apr                | 2.08              | 2.03             | -2.5%   |
+--------------------+-------------------+------------------+---------+
| May                | 2.14              | 1.90             | -12.6%  |
+--------------------+-------------------+------------------+---------+
| Jun                | 2.05              | 1.98             | -3.5%   |
+--------------------+-------------------+------------------+---------+
| Jul                | 2.09              | 1.96             | -6.6%   |
+--------------------+-------------------+------------------+---------+
| Aug                | 2.09              |  1.97            | -6.1%   |
+--------------------+-------------------+------------------+---------+
| Sep                | 2.09              |                  | -100%   |
+--------------------+-------------------+------------------+---------+
| Oct                | 2.09              |                  | -100%   |
+--------------------+-------------------+------------------+---------+
| Nov                | 2.06              |                  | -100%   |
+--------------------+-------------------+------------------+---------+
| Dec                | 2.11              |                  | -100%   |
+--------------------+-------------------+------------------+---------+
|                    |                   |                  |         |
+--------------------+-------------------+------------------+---------+
| Exchange Rate      | 3.1               | Local            |         |
|                    |                   | Currency/US \$   |         |
+--------------------+-------------------+------------------+---------+
| Date of Quote      | 10/11/2006        | MM/DD/YYYY       |         |
+--------------------+-------------------+------------------+---------+

## Varieties

In the eastern zone, the D'agen variety accounts for 100 percent of the
planted area. In the southern zone, the D'agen variety occupies 98
percent of the area, while the rest is accounted for by Stanley,
President, and others varieties of minor importance. In the Uco Valley,
D'agen covers 60 percent of the area, while the other 40 percent is the
President variety.

Argentina cannot use the name D'agen with exports to the European Union
since D'agen is a geographic indicator that can only be used by France.
Therefore exports of this Variety to the EU are named Mendoza Prunes.

Before the 1990's, Argentina produced mainly D'agen prunes with pit like
the American style but since 2000 this trend was overturned and now
almost all the prunes produced are pit less D'agen like the European
style.

# Section II. Statistical Tables

<table>
<colgroup>
<col style="width: 19%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><strong>PSD Table</strong></td>
</tr>
<tr class="even">
<td>Country</td>
<td colspan="10"><p id="argentina-1" class="heading">Argentina</p></td>
</tr>
<tr class="odd">
<td>Commodity</td>
<td colspan="6"><strong>Prunes (Plums, Dried)</strong></td>
<td colspan="4">(HA)(1000 TREES)(MT)</td>
</tr>
<tr class="even">
<td></td>
<td colspan="3"><p>2004</p>
<p>Revised</p></td>
<td colspan="3"><p>2005</p>
<p>Estimate</p></td>
<td colspan="3"><p>2006</p>
<p>Forecast</p></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>12500</td>
<td>12500</td>
<td>12500</td>
<td>12500</td>
<td>12500</td>
<td>12500</td>
<td>0</td>
<td>0</td>
<td>12500</td>
<td>(HA)</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>8850</td>
<td>8850</td>
<td>8850</td>
<td>8850</td>
<td>8850</td>
<td>8850</td>
<td>0</td>
<td>0</td>
<td>9200</td>
<td>(HA)</td>
</tr>
<tr class="odd">
<td>Bearing Trees</td>
<td>6000</td>
<td>6000</td>
<td>6000</td>
<td>6000</td>
<td>6000</td>
<td>6000</td>
<td>0</td>
<td>0</td>
<td>6200</td>
<td>(1000 TREES)</td>
</tr>
<tr class="even">
<td>Non-Bearing Trees</td>
<td>2500</td>
<td>2500</td>
<td>2500</td>
<td>2500</td>
<td>2500</td>
<td>2500</td>
<td>0</td>
<td>0</td>
<td>2300</td>
<td>(1000 TREES)</td>
</tr>
<tr class="odd">
<td>Total Trees</td>
<td>8500</td>
<td>8500</td>
<td>8500</td>
<td>8500</td>
<td>8500</td>
<td>8500</td>
<td>0</td>
<td>0</td>
<td>8500</td>
<td>(1000 TREES)</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>4810</td>
<td>4810</td>
<td>4810</td>
<td>3783</td>
<td>3783</td>
<td>3000</td>
<td>3598</td>
<td>3598</td>
<td>3000</td>
<td>(MT)</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>23000</td>
<td>23000</td>
<td>23000</td>
<td>27000</td>
<td>27000</td>
<td>35000</td>
<td>0</td>
<td>0</td>
<td>38000</td>
<td>(MT)</td>
</tr>
<tr class="even">
<td>Imports</td>
<td>173</td>
<td>173</td>
<td>17</td>
<td>15</td>
<td>15</td>
<td>20</td>
<td>0</td>
<td>0</td>
<td>20</td>
<td>(MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>27983</td>
<td>27983</td>
<td>27827</td>
<td>30798</td>
<td>30798</td>
<td>38020</td>
<td>3598</td>
<td>3598</td>
<td>41020</td>
<td>(MT)</td>
</tr>
<tr class="even">
<td>Exports</td>
<td>22000</td>
<td>22000</td>
<td>23000</td>
<td>25000</td>
<td>25000</td>
<td>33000</td>
<td>0</td>
<td>0</td>
<td>36000</td>
<td>(MT)</td>
</tr>
<tr class="odd">
<td>Domestic Consumption</td>
<td>2200</td>
<td>2200</td>
<td>1827</td>
<td>2200</td>
<td>2200</td>
<td>2020</td>
<td>0</td>
<td>0</td>
<td>2020</td>
<td>(MT)</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>3783</td>
<td>3783</td>
<td>3000</td>
<td>3598</td>
<td>3598</td>
<td>3000</td>
<td>0</td>
<td>0</td>
<td>3000</td>
<td>(MT)</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>27983</td>
<td>27983</td>
<td>27827</td>
<td>30798</td>
<td>30798</td>
<td>38020</td>
<td>0</td>
<td>0</td>
<td>41020</td>
<td>(MT)</td>
</tr>
</tbody>
</table>