Chilean Exports, Post Earthquake
In the News
March 28, 2010
Late last month, an 8.8 magnitude earthquake struck Chile, one of the U.S.’s largest exporter partners, damaging infrastructure and seriously compromising export capabilities. In the weeks immediately following the quake, there were shipping interruptions due to ports lacking electricity and other necessary conditions. And when perishable goods can’t be shipped immediately, they often have to be dumped.
But certain crops may have been spared, thanks to the earthquake’s timing. Berries, table grapes and tree fruit are the predominant food exports to the U.S., other than salmon. Fortunately, the earthquake took place toward the end of the shipping season for these items. Wine, another major Chilean commodity, may not have fared as well though, according to early reports. And other crops, like avocado and kiwifruit, are not shipped this time of year. The Chilean Exports Association (ASOEX) is still in the process of accessing the overall damage.
Meanwhile, many companies had their infrastructure destroyed in both production areas as well as in their corporate offices in Santiago. Hortifrut, one of Chile’s biggest exporters of berries, has had to operate out of hotel rooms. Dwight Ferguson, CEO of Naturipe Farms, which is owned in part by Hortifrut, says that working in this makeshift office has been a challenge, but that their teams in the area are making it work. In fact, once telephone and computer systems were restored, the situation became very functional.
“The impact on crops has been minimal,” says Ferguson. “Three to four week inventories were ‘on the water’ when the first earthquake hit, so those were obviously not affected. Quantities may be limited – for example, the apple growers were just beginning their shipments – but I do not believe any products will disappear.”
Prices won’t necessarily rise in the short term either, Ferguson says, because there was so much inventory already in transit when the quake hit the region. On the whole, Ferguson says it will take years for some of the infrastructure to be repaired or replaced, but interim solutions will be in place in time for the next season.
“Certain contingencies have been and will continue to be in place. All of our storage units have backup generators, and backup computer files are stored in other locations,” says Ferguson. “Chilean growers are very resilient and they’ve been through challenges like this before.”
Chile exports $66.5 billion annually in copper, fruits and nuts, fish and seafood and wood products to the U.S., Japan, China, the Netherlands, South Korea, Brazil, Italy and Mexico, according to the U.S. Department of State.