National production set a record this year
Chile: European hazelnuts have the biggest growth in area
European hazelnuts are in fashion. They went from being almost unknown to becoming one of the fruit crops with the biggest growth in surface in the country. In the last decade it increased by eight times, reaching 13,108 hectares in 2016, according to data from Ciren. The sector, however, says that the growth was greater, that they are planting about 3 thousand hectares per year and that by 2030 there will be 30 thousand hectares.
The rage for this dry fruit is also reflected in the sales of plants. It was the best selling fruit plant in the country in 2014 and 2015, as a total of 1,324,114 units were sold in 2015. The nurseries say they have already sold next year’s production and part of 2019, driven by a growing interest for this plant in the regions of Biobio, Los Rios and Los Lagos, in addition to the areas where most of the plantations are currently concentrated: Maule And La Araucania.
In addition, this year’s national production set a record, as they produced some 20 thousand tons of clean fruit – i.e. shelled hazelnuts – thanks to the good weather conditions of last year’s spring and the one to three weeks advance in the harvests, depending on the production area, which ensured a good quality of the fruit as there were no rains or fungi recorded.
That figure represents a 22% increase over the last season and it is only the first sign of a leap that will accentuate in the coming years, as the new orchards enter into full production.
“It is difficult to understand this year’s number to know if there were more yields from adult orchards or if it they were partly due to orchards that went into production. We have to analyze it more calmly, but if in four years we reach 30 thousand hectares, it means that in 12 years we will be having a production of around 70 thousand tons per season,” said Eugenio Ulrici, manager of AgriChile, owned by the Italian group Ferrero, as hazelnut trees start producing fruits in the fourth year and reach their full production in the eighth year.
In addition to the low labor requirements and to being suitable for the climatic conditions of several regions of the country, producers also choose to plant European hazelnuts because they are more profitable than traditional crops and they have the option of signing a contract for the purchase of the fruit with Ferrero; practically the only big buyer in the country.
However, this factor is also seen as one of the long-term risks for the fruit. As Chile increases its production volumes, other multinationals are expected to arrive to the country, but some producers are already looking for new buyers.
Producers, advisers and nurseries acknowledge that the European hazelnut boom would not have occurred in Chile without the arrival of Ferrero’s agricultural arm, but they agree that the existence of a single purchasing power is one of the risks when entering the sector, as the Italians – considering their own crops and what they acquire – manage around 98% of the national production.
Jaime Armengolli is the owner and commercial manager of Agrícola La Campana, a company that produces pasta and flour from hazelnuts and toasted hazelnuts in Longavi, in the Maule Region. It is almost the only alternative purchasing power that operates in a stable way in the country for AgriChile and, according to him, some producers keep a part of the production for their company to ensure that there is not a single actor in the market.
“There is a market for products made based on hazelnuts, but it is handled with very different codes. We have been growing slowly and it is a market that can be developed, but it takes time, because there are different qualities and you have to validate your product, which takes some years,” he said.
Other large buyers of hazelnuts, such as Cadbury or other chocolatiers who are also strong players in the global market, don’t arrive to Chile because of the high price that Ferrero pays producers, which would be around US $1 higher than the international spot market value, among other reasons.
“They, as end users, can pay a different price than a person buying the product to resell or market it. It is a higher value than the commodity, but it’s not that much higher, and that price is related to what it would cost them to buy from third parties,” stated Jaime Armengolli.
In turn, Eugenio Ulrici said that the interest to close contracts with AgriChile had increase and that they already have long-term contracts with about 140 producers in the country, which this season obtained better prices.
“The producers who have signed supply contracts with us achieved prices of around US $ 3.88 per kilo for the tonda di giffoni variety and US $ 2.98 for the Barcelona variety, for the dried fruit and clean shell,” he said, adding that this season’s values in the spot market were close to US $ 3.62 for giffoni and US $ 2.7 for Barcelona.
New areas and varieties
Nicholas Rohm is German and to Chile arrived 17 years ago. Together with a group of four friends, they created Hanusa Chile and in 2009 began planting European hazelnuts in the vicinity of Gorbea, in La Araucania. They started with 45 hectares and currently have 120 hectares in that area and another 120 hectares in the commune of Los Lagos, that they have been gradually increasing and which they will increase by another 60 hectares this year.
Although they started planting the most known varieties, tonda di giffoni and Barcelona, in last years they have begun to plant new varieties, almost all developed in Oregon, the United States.
“When we left, no one knew much about varieties. In 2011 I went to Oregon for the first time and decided to try some varieties from the Oregon State University because we did not want to put all the eggs in the same basket. I was one of the first to plant them in Chile,” Nicholas Rohm said.
He says that one of those varieties is Yamhill variety, which has given good results in these five years and that in 2016 they sent a sample to Munich, with the idea of exporting shelled hazelnuts directly to Germany, something that he hopes to achieve next season.
According to the nurserymen, the yamhill variety is the one that is being planted the most nowadays, especially in the south, where there is a growing interest to enter the sector and where the giffoni would not yield as good results as in the central zone.
“In our case, nearly 75% of our production corresponds to yamhill and the rest to varieties that complement it in pollination. We’re also testing the Jefferson variety, which has a later harvest and is better for colder areas,” the manager of the south division of the Grupo Hijuelas nursery, Jorge Mohr, stated.
Since they are also producers, about 20% of their plant production is for themselves. According to Jorge Mohr, the Biobio area has the greatest potential to continue growing, as well as Los Rios and Los Lagos.
“Region VIII is going to grow a lot, due to water conditions, climate and soil variability, and I would say it is the one that has grown the most lately, while IX has already peaked. The south will begin to take flight, because it has had few alternatives, but now it has realized this is their alternative,” he said.
By the end of this year AgriChile will add 4,200 hectares of its own orchards in the country and it plans to add another 300 hectares in the south of the Region of Maule and 300 more in the north of Region VIII.
According to Eugenio Ulrici, they are evaluating the option of extending their plantations in the southern zone, encouraged by the strong interest of other producers in that area, although they still don’t have a concrete project.
“We are thinking of the area south of Temuco, in Valdivia or Osorno. Normally, AgriChile would start planting and then the producers followed, but now it has been the other way around,” he said.
According to these plans, the company would also have to expand its processing plant in Region VII in the medium term to be able to absorb the larger volume there will be, or install a new plant, further south.
“It is a logistical decision that we will have to take later, if we expand in the Maule or get closer to where the volume of fruit is and open a second plant, because the capacity of our current plant will only be good for four to five years,” Ulrici said.
For the moment, they plan to expand the Maule plant in the second half of the year, so as to double its shelling capacity, as after two years of operation it’s not enough for the current volume.