Chile’s opportunistic raid cut across a gentlemen’s agreement by Australian and South African citrus growers to divide the US market: Australia sells to retailers in the western US, while South Africa targets the east.

The huge volume of Chilean fruit, which included mandarins as well as navels, collapsed retail prices across the US, costing Sunraysia and SA Riverland citrus growers millions of dollars.

Representatives of Florida-based DNE World Fruit Sales and the Vancouver-based Oppenheimer Group flew into Mildura last week to brief local growers on the 2009 US export season.

Growers went into the meeting at the Murray Valley Citrus Growers office in Pine Avenue wanting an explanation for what appeared to be a costly failure of market intelligence.

One Sunraysia grower estimates the Chilean invasion cost him about $200,000 in lost profits.

He said if DNE had used its contacts in Chile, or sent an employee to make inquiries, Australian exporters might have been forewarned, and could have sought alternative markets.

In fact, when the damage became clear, Australian exporter Riversun cancelled its last shipment to the US, and sent it to Europe instead.

Chilean exporters belatedly decided to pull out of the European and Japanese markets and try their luck in the US.

US marketers had been expecting around 650,000 boxes of navels from Chile, but received more than twice that volume – 1.5 million boxes.

DNE’s national sales officer, Stuart Monaghan, said the problem was not just the sheer volume of Chilean fruit, but exporters’ failure to stagger its arrival over a longer interval to maximise and stabilise prices.

The bulk of the shipments arrived within a three to four-week period, collapsing prices at the height of Australia’s export season.

DNE president Greg Nelson said, “For the Chilean fruit, it takes about two weeks from picking to reach US supermarkets, which includes a transit period of seven to 10 days at sea.

For more of this story, purchase your copy of Wednesday’s Sunraysia Daily 20/01/2010.