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Chilean fruit industry warns about “cheap” dollar and costs

Wednesday, January 17th 2007 - 20:00 UTC
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Chile's fruit producers had a tough year in 2006, suffering from unfriendly exchange rates despite the association of Chile's Fruit Producers (Fedefruta) appealing for the government to push for a higher-valued U.S. dollar.

Chile is currently awash in U.S. dollars, the result of record high copper prices. The abundance of dollars in the country has lowered the dollar value, hurting fruit industry profits, which are mostly paid in U.S. dollars. "It is not acceptable that a non-renewable primary sector (copper), due to a bad policy, can have such serious consequences for the whole productive domestic sector," Fedefruta stated in a press release this week. Fedefruta warns that labour costs are 60% of the fruit production costs; therefore it is likely that dismissals will increase and fewer contracts will be renewed. This could mean a reduction of 100,000 jobs. "It is not just the fresh fruit sector, but rather the nation's export model that is endangered by the shadow of the low-valued U.S. dollar," said Fedefruta president Rodrigo Echeverría to a gathering of more than 500 fresh fruit growers at a conference in October last year. United States is the principal destination for Chile's 2 billion US dollars fresh fruit exports. In the recently ended 2005-2006 season, Chile exported more than 230 million cases of fresh fruit to markets around the world, with about 35% of all exports shipped to North America. Chile's industry supplies about one-half of all fresh fruit consumed in Northern Hemisphere countries during their winter months. The Santiago Times

Categories: Economy, Latin America.

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