Argentine concentrated apple juice industry is formed basically by PyMES (Small and medium-sized companies), and historically, 90% of production is exported to the United States. The increase in world offer of this product, led by China, implies higher quality requirements our country will have to satisfy.

  • 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 sweetener of soft drinks, and the so called “with pulp” or “cloudy” (45° 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 from 1.4 to 3%.
  • The industry uses approximately 6.9 Kg of apples to obtain 1 Kg of concentrated juice. This relation varies according to the technological level of the processing plant.

THE WORLD MARKET

  • In 2006, world production was 1.2 million tons, 18% lower than the previous year.
  • In the period 1997-2006 the world production of concentrated apple juice increased 50%, following a growing trend.
  • This increase is explained by the extraordinary progress of China –main producer- which elaborates half of the world total and grows at an average annual rate of 30%, although with a more moderate trend at present.
  • United States production presents a decreasing trend, with an average annual decrease of 2%. The lower price of imported juice, among other factors, explain this trend.

 

World production of concentrated apple juice

..Source: National Food Administration based on data from USDA.

 
  • Argentina is leading the production of concentrated apple juice in the southern hemisphere.
  • Almost all the world production is exported, half by China – the main supplier – with 614,000 tons of concentrated juice.
  • Japan and other European countries demand juice with a high percentage of acidity.
  • In response to these requirements, China is incorporating plantations of high acidity apple varieties.
  • Most of the juice exported by China still has an insufficient degree of acidity, so buyers must mix it with another juice with a higher percentage.
  • The product offered by Poland –second world exporter (20%)- is mostly of medium to high acidity (with values up to 6% and 7%).
  • Argentina is the fifth world producer and exporter and offers 5% of world trade, surpassing Chile by 10%.
  • Germany is the world main importer, with 50% purchasing, followed by the United States with 40 % of world demand.
  • Argentina, Chile and China are the main suppliers of the United States.
  • The growth in world demand of concentrated apple juice doubled during the decade 1997-2006, not only due to an increase in the manufacturing of pure or mixed juices, but also because of the use of this juice as additive in cosmetics and in the pharmaceutical industry.

NATIONAL PRODUCTION

  • In 2006, the Argentine production of concentrated apple juice was 55,000 tons.
  • Variances in the production of concentrated juice are directly related to fruit availability for grinding and to the international price of the juice.

 

Argentine production of concentrated apple juice


..Source: National Food Administration based on private data.

 
  • The volume of apples entering the industry depends on the fruit quality and on the price in the fresh market.
  • Half of the Argentine production of apples –averaging one million tons- is used for industrial purposes, due to the volume of fruit which does not meet the quality requirements of the fresh market.
  • Eighty percent of the volume used for industrial purposes is to be grinded for the manufacturing of concentrated juice.
  • Production is seasonal. The period of higher activity is from January to May.
  • Apple aroma is a byproduct that is recovered in the manufacturing and is sold separately.
  • It is equivalent to 1.5% of concentrated juice production and is used by industries that manufacture drinks and perfumes.
  • Fruit is the factor of higher incidence on the cost structure, followed by enzymes (imported from Germany and France) and packaging.

EXPORTS

  • In average, 90% of Argentine production of concentrated juice is exported, mainly to the United States.
  • This reflects a high dependence on the North-American market which demands clarified concentrated juice.
  • Argentine products enter this market through the port of Philadelphia.
  • Russia is a new buyer of Argentine juice, although the volumes demanded by this market represent only 3% of the total.
  • Argentine concentrated apple juice exports leave the country through the port of San Antonio Este, 450 Km away from the zone of production (Alto Valle del Río Negro and Neuquén).
  • In 2006, exports totaled 49 million dollars and a volume of 55,000 tons.
  • In the period 1997-2006, shipments to the United States decreased at an annual average rate of 3% in volume, while the FOB price per ton fell 30% throughout the period.

 

Argentine exports of concentrated apple juice


..Source: National Food Administration based on INDEC.

 
  • In 2006, that country paid US$ 890 per ton of Argentine juice, 2% less than the average in the last ten years.
  • The presence of China in the international market has been a determining factor in the price fall.
  • In the first four months of 2007, shipments were 25% higher in volume compared to the same period of the previous year, while the average price per ton increased 15%. It must be pointed out that part of these shipments were stocks from the previous year.
  • Eighty percent of total export volume is produced by plants located in Río Negro, 15% comes from Neuquén and 6% from Mendoza.
  • Two companies export 70% of total volume, while the first four total 90% of shipments.
  • The sale is made in bulk, in plastic or tin drums, of 307 Kg or in wooden bins (with double polyethylene bag) with a capacity of 1,535 Kg net of concentrated juice.
  • Export products are transported in vessels with bulks (Reefer system) refrigerated at 0°C and -20°C in the cases of clarified juice and juice with pulp respectively.
  • Some exporting companies get together to negotiate the rental of vessels, as from December and January. However, there is no association for selling the product.
  • The increase in world offer implies greater demand for Argentina as to quality and need of new alternatives to reduce costs.
  • Apart from traceability requirements, HACCP and good manufacturing practices (GMP) imposed by the United States, it is now necessary to comply with the Bioterrorism act that has been in force since December 2004. Export tax for concentrated juice is 5%. Furthermore, the exported product has an extra-zone reimbursement of 5% on FOB value.

LOCAL CONSUMPTION

  • The concentrated juice that is not exported is sold to local drinks manufacturers to be diluted, mixed or used as sweetener for soft drinks and later packed under registered trademarks.

IMPORTS

  • Imports –coming from Uruguay and Brazil- average 1,200 tons per year. Importers are local manufacturers of soft drinks that use the product as sweetener.

RAW MATERIALS

  • Argentine production of apples is about 1 million tons.
  • Total growing area is 71,000 ha.
  • Apple producing regions are located in the Alto Valle del Río Negro (Neuquén and Río Negro have 80% of the planted area) and in the Valley of Uco (Mendoza).
  • Other less relevant zones are 25 de Mayo (La Pampa) and the Valley of Tulum (San Juan).
  • The province of Río Negro produces 65% of total apple production in the country and Neuquén 15%.
  • Some varieties are used for grinding, as Red Delicious and Granny Smith.
  • The industrial fruit price responds to the free interaction of supply 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 2007 campaign the average price paid by juice manufacturers to apple growers oscillated from $0.18 to $0.20 per Kg of apples.

THE COMPANIES

  • The industrial sector is formed by PyMES that produce mainly clarified juice with the quality required by the North-American market.
  • There are 10 manufacturing companies that operate 11 industrial plants. Most of the companies are grouped in the CINEX (Cámara Argentina de la Industria y Exportación de Jugos de Manzana, Peras y Afines) (Argentine Chamber for the Industry and Export of Apples, Pears and Derivatives), located in Cipolletti (Río Negro).

 

Manufacturers of concentrated apple juice
Río Negro Mendoza Neuquén
Coop. Agríc. Jugos de Cuyo S.A. Jugos del Sur S.A.
Colonia Choele Choe    
Coop. De Colonia   Natural Agri S.A.
Julia y Echarren ltda.    
Gold Juice S.A.   Sower S.A.
Jugos S.A.    
Proin S.A.    
Jugos del sur S.A.    
Zumos argentinos S.A.    

 

  • The installed production capacity is approximately 100 thousand tons. There is some idle capacity because this is a seasonal production.
  • The employment level of the manufacturing sector is 1,000 to 1,100 jobs, and the activity requires skilled labor.
  • The investment made by the companies aimed at improving the process efficiency, by using Italian and North-American technology.
  • There are cases of vertical integration in cooperatives and packaging plants moving forward in the chain by industrializing production.

SOURCES CONSULTED

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.