Asia, a gigantic market for the Chilean food industry

In recent years Chile set itself the goal of becoming a world agro food power. To achieve this end it is playing a key role in the huge markets of the Asian economies, where Chile is developing a powerful strategy aimed at positioning Chilean food products in the countries of that region.

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In 2009, Chilean exports to the Chinese market amounted to US$ 11.89 billion, which represented a growth of 18.9% in comparison with 2008. Exports to Japan amounted to US$ 4.48 billion, making Japan Chile’s third largest trading partner, accounting for 9% of total exports and 8% of non-traditional shipments. In turn, South Korean imports from this South American country amounted to US$ 2.91 billion.

Thus Asia has become a key market for the Chilean economy, which has been able to position its products among the main economies of the region. As a result, one of the productive sectors that has intensified its exchange the most is the agro food sector. In 2009, exports from this sphere of the economy to China represented 5.67% of Chilean supply, a figure only outperformed by mining, whereas in Japan, the sector increased its share to 29.8% of national supply, also coming in second after mining. Lastly, 9.21% of Chilean exports to South Korea were from the agro food sector.

The Chilean presence responds to the country’s strategic vision of becoming an agro food power at a world level. In order to bring this about, the project depends to a large degree on positioning Chilean products in those countries which, together, represent a potential market of more than 1.5 billion people. Aware of the importance of this region, Chile has carried out a vigorous and ambitious campaign in Asia – including signing Free Trade Agreements (FTA) with China, South Korea and Japan – in order to become one of the main providers of food products to the Asia-Pacific zone.

Thus, starting in 2007 and under the auspices of ProChile, Chile’s export promotion organization, local companies have been able to make their gastronomic fare known in South Korea and China (as well as Vietnam). This gave rise to more than 600 programs aimed at allowing the Asian public to become acquainted with the variety and quality of Chilean agro food products.

Among the most promoted products were wine, gourmet foods, nuts, berries, organic products and exotic meats. Japan was not overlooked in this enterprise: whereas in 2009 it imported mainly salmon and trout, boneless pork and wine, this year it intends to give priority to processed and frozen meat, fruit such as grapes and kiwis, as well as avocado and dehydrated fruit and vegetables. In the course of 2010, China will be importing meat, seeds, fruit and wine, among other products, whereas South Korea, in addition to the above products, will also import canned goods, concentrated fruit and vegetable juices and pulp.

Furthermore, the Chilean government organized a week dedicated to “Chile, Food and Forestry Power” at the country’s pavilion at the Expo Shanghai 2010, where representatives of the main vineyards and large companies of the forestry sector were able to exhibit their products along with entrepreneurs from other productive sectors of the Chilean economy.

Chile’s comparative advantages

Although up until 2008 Chile ranked 17th among the food-producing countries of the world, its recent strong presence in the Asian markets and the positive reaction there has been to Chilean products is now causing the country to be viewed in a different light, as is demonstrated by the increase of Chilean exports to Asia.

In addition to this positive scenario, Chile has major advantages to offer that allow it to compete and gain a solid position in the region. First of all, Chile’s sound entrepreneurial culture and the responsible support of successive governments have transformed the project “Chile, an agro food power” into a state policy. Moreover, the Chilean economy is one of the most open in the world, expediting trade exchange and investment with the rest of the world.

The country is also noteworthy for its unbeatable phytosanitary conditions and a geography that is protected by the Pacific Ocean and the Andes Range. This allows it to enjoy enviable sanitary conditions and also to develop a wide array of excellent quality, safe and reliable food products.

Chile is also one of the few countries in the world that has an extensive area blessed with a Mediterranean climate, making it possible to cultivate fruit and vegetable products of top quality, color and taste. In addition, its location in the southern extreme of the American continent allows it to export its produce – mainly fruit – during the counterseason to the countries of the northern hemisphere (where the markets with the greatest demand for these products are situated, such as the United States, Europe, China, Japan and South Korea).

Lastly, the Chilean export sector has incorporated international regulations and standards that ensure nutritional safety. Given all these advantages, the goal to export more than US$ 20 billion by 2015 set by the Asociación de Empresas de Alimentos de Chile (Chile’s Association of Food Companies) does not appear to be an unrealistic prospect.