THE PRODUCT

• Concentrated apple juice is the product obtained by the concentration of the juice of different varieties of apples meeting the requirements of the Argentine Food Code. The restoration of the recovered aroma is admitted. Art. 1046 – Resol. 2067/88.
• There are two types of concentrated apple juice: the “clarified” (70º-71º Brix) used in the juice industry and as soft drinks sweetener, and the so called “with pulp” or “cloudy” (45º Brix) for juices and nectars.
• Apart from the Brix degrees, the acidity is another important technical specification considered at the time of selling.
• The concentrated juice produced in Argentina presents mid acidity values oscillating between 1.4-3%.
• The industry uses approximately 6.9 k of apples to obtain 1 k of concentrated juice. This relation varies according to the technological level of the plant.

THE WORLD MARKET

• In 2004, the world production was 1.2 million tons, 2.5% higher than the previous year.
• In the period 1999/2004, the world production of concentrated apple juice increased 30%, with a growing tendency.
• This increase is explained by the extraordinary progress made by China – principal producer – which elaborates half of the world total and grows at an annual rate of 40%.
• Argentina is leading the production of concentrated juice in the southern hemisphere.
• USA’s production presents a decreasing tendency. Among other factors, the lower prices of imported juice explain this tendency, however, this effect was not so marked in 2004.

• Almost all the world production is exported, half from China – the main supplier – with 528,000 tons of concentrated juice.
• Both Japan and other European countries demand juice of high acidity percentage.
• In response to these requirements, China is incorporating plantations of high acidity apples.
• Yet, most of the juice exported by China has an acidity level that makes buyers mix it with another of higher percentage.
• The product offered by Poland – second world exporter- is mainly of medium to high acidity (with values up to 6% and 7%).
• Argentina is the fifth world producer and exporter, offering 4% of the world trade, and just over Chile.
• Germany is the main world importer, with 50% of purchases, followed by the USA, with 40% of world demand.
• Argentina, Chile and China are the main suppliers of the USA.
• In 2005, so far, the international price went down by 20%, mainly due to the higher world offer.
• The growth in the world demand of concentrated apple juice, is not only due to an increase in the elaboration of pure or mixed juice, but to its use as additive in cosmetics and in the pharmaceutical industry.

NATIONAL PRODUCTION

• In 2004, the Argentine production of concentrated apple juice was 45.3 thousand tons.
• The variations in the production of concentrated juice, are directly related to the fruit availability for grinding and to the international price of juice.
• The apple volume entering the industry, depends on the fruit quality and on the price in the fresh market.

• Half of Argentine apples production – averaging one million tons – is devoted to the industry, due to the volume of fruit which does not meet the quality requirements of the fresh market.
• 80% of the industrial production, is to be grinded for elaborating concentrated juice.
• Production is seasonal. The period of higher elaboration is between January and May.
• Apple aroma is a subproduct which is recovered in the elaboration and is sold separately. It is equivalent to 1.5% of concentrated juice production. It is used by the industries that elaborate drinks and perfumes.
• The fruit is the factor of higher incidence on the cost structure; followed by enzymes (imported from Germany and France) and packaging.

EXPORTS

• In average, 95% of Argentine production of concentrated juice is exported, mainly to the USA, showing a high dependency on the American market, demanding clarified concentrated juice.
• The product enters the USA through the port of Philadelphia, and leaves Argentina through the port of San Antonio, 450 km away from the production zone.
• In 2004, exports totaled 42 million Dollars and a volume of 44,000 tons.

• In the period 1999-2004, shipments to the USA decreased at an annual rate of 10% in volume, while the FOB price per ton grew 3% during all the period. In 2004 the ton of Argentine juice was paid US$ 950.
• During the first quarter of 2005, shipments were tripled in volume and value as regards the same period of the previous year; notice that these shipments are mainly conformed by stocks of the previous year.
• The Chinese presence in the international market, has been a determinant factor in the price fall.
• Two companies export 70% of total volume, while the first four companies total 90% of shipments.
• The sale is made in bulk, in plastic or tin drums, of 307 k or in wooden bins with a capacity of 1,535 k net.
• Reefer ships are used to transport the product at a temperature of 0ºC for clarified juice and of -20ºC for juice with pulp.
• Some exporting companies get together to negotiate the rental of ships, as from December and January. However, there is no association for selling the product.
• The increase of the world offer, implies greater demands for Argentina as to quality and the need for new alternatives to reduce costs.
• Apart from traceability requirements, HACCP and good manufacturing practices (GMP) imposed by the USA, it is necessary to comply with the Bioterrorism act that has been in full force since December 2004.
• The export tax for concentrated juice is 5%. Furthermore, the exported product has an extrazone reimbursement of 5% on FOB value, plus a reimbursement of 1% for leaving through a Patagonian port.

INTERNAL CONSUMPTION

• Unexported concentrated juice is sold to local drinks manufacturers to be dissolved, mixed or used as sweetener for soft drinks and to be packed under tradenames.

IMPORTS

• Imports – coming from Uruguay and Brazil – are 1,400 tons and are limited to purchases by soft drink manufacturers using the product as sweetener.

RAW MATERIALS

• The total number of apple producers is around 9,900, concentrated in 19 chambers. Half of them run farms of less than 20 hectares.
• The Argentine production is about one million tons.
• The total cultivated area is 71,000 h.
• The apple producing region is located in the Valley of Rio Negro (Alto Valle del Rio Negro) (Neuquén and Rio Negro have 80% of the implanted area), and in the Valley of Uco (Mendoza).
• Other minor zones are 25 de mayo (La Pampa) and the Valley of Tulum (San Juan).
• The province of Rio Negro produces 65% of Argentine apple and Neuquén, 15%.
• Different varieties are used for grinding, mainly Red Delicious and Granny Smith.
• The industrial fruit price responds to the free game of offer and demand. The industrial idle capacity, generates a price competition with the fresh market, in order to cover fixed costs with greater fruit volumes.
• In the 2005 campaign, the average price paid by the industry to the producer was $ 0.11 per kilo of apple.

THE COMPANIES

• The industrial sector is formed by PyMEs, which mainly produce clarified juice with the quality required by the North-American market.
• There are 10 manufacturing companies operating 11 industrial plants.
• Most of the firms are concentrated in CINEX (Camara Argentina de la Industria y Exportación de Jugos de Manzana, Peras y Afines) (Argentine Chamber for the Industry and Export of Apple, Pear and others Juice), located in Cipolletti (Rio Negro).

Manufacturers of concentrated apple juice

• The capacity installed is approximately 100 thousand tons. There is some idle capacity for being a seasonal production.
• The employment level of the industrializing sector is between 1,000 to 1,100 labor positions. Labor is skilled.
• The investments made by the companies during the past decade, aimed to improve the process efficiency. The technology used is of Italian and North-American origin.
• There are cases of vertical integration in cooperatives and packaging plants moving forward in the chain by industrializing the production.

BIBLIOGRAPHY

SAGPyA - Boletín Oficial de la República Argentina - . Cámara Argentina de la Industria y Exportación de Jugos de Manzanas, Peras y Afines (CINEX) - Dehais, F.; Comunicación personal - IEERAL de Fundación Mediterránea, Filial Comahue – INDEC - Jorge, J.; comunicación personal - Patagonia Norte S.A.- http://www.fas.usda.gov.

CHAMBERS

Cámara Argentina de la Industria y Exportación de Jugos de Manzana, Peras y Afines (CINEX); Tel. 0054-299-478-4090; E-Mail: jmjorge@infovia.com.ar - Cámara Argentina de Fruticultores Integrados (CAFI); Tel. 0054-011- 4866-1136/4861-1227; E.Mail: cafiba@speedy.com.ar (Bs. As.) o cafi@speedy.com.ar (Río Negro). Productores de Neuquén E-Mail: rappazzorv@patagonia.com.ar - Cámara Valletana de Insumos Agrícolas (CAVIA); Tel. 0054-2941- 43-2899/42-4503; E-Mail: psvrocaventas@infovia.com.ar - Federación de Productores de Fruta de Río Negro y Neuquén; Tel.0054-299-477-7747 E- Mail: fpfrnn@yahoo.com.ar - Cámara de Comercio, Industria y Agricultura de Tunuyán; Tel.0054-2622-42-3131/ 2686; E-Mail: camtyan@slatinos.com.ar.