Brazil's political and economic situation has brought most of the country's sectors to a halt, although in the agricultural sector, the biggest problem this year has not been the political uncertainty, but the weather, with high temperatures that have prevented the flowering of mangoes and rains that have ruined some crops.
Rio Doce has been producing a wide range of agricultural products in Brazil for about 35 years. The company exports to Europe, North America and Dubai, and sometimes to Hong Kong. Currently, figs, guavas, limes and persimmons are in season, but mangoes are its main product.
The company exports Palmer mangoes by air to Portugal, Spain, Canada, Germany, Italy and Dubai. "Some countries prefer the Palmer; it's a cultural thing. Portugal and Spain adore it. Its popularity might also be due to the fact that there are more direct flights to Portugal from Brazil than from Peru," as well as to the greater cultural similarity between Brazil and Portugal, explains Celso Claudio Piovesan, of Rio Doce. "Some countries never buy Palmer, such as Belgium, France or Switzerland, because in those markets the Kent variety is the most popular."
Piovesan doesn't believe that this is because of the quality or price, as the Palmer is a little cheaper, or to the variety being unknown, as the company carried out a big advertising campaign a few years, which did not yield good results. "When the Kent comes back to the market, they forget about the Palmer. We have made every effort to sell this variety, but some markets do not want to change. It's a cultural thing." He adds that, even within a single country, there are regional differences. "For example, in Germany, the Palmer is only sold in the south. In Spain, they prefer Palmer in the north and Kent in, for example, Barcelona."
The company is currently not looking for new customers for its mangoes, as it feels it has reached its maximum capacity at the moment, and because this would require an investment which it is not in the best position to make right now. "We have been working with some importers for 20 to 25 years. Some of them are new, but before working with a new company, we conduct thorough research, since it has to be a very reliable company. Our current customers purchase virtually everything we produce during the season, so it doesn't make much sense to look for new customers right now. If we wanted to sell more, we would have to produce more, to increase the size of the company and hire more people, and it is not the best time to do that because of the Brazilian economic and political crisis," explained Piovesan. The country's political uncertainty has led to a halt in investments.
However, he believes that the biggest problem this season is not the political and economic instability, but the weather conditions. He is not worried about the weakness of Brazil's currency. "In fact, the current exchange rate against the dollar and the Euro allows us to be more competitive. Last year, if you wanted to buy one Euro, you had to pay 2 real and 70 cents; now I have to pay 4 real, so my product is more competitive," he explains. "The real problem is not economic; it is the weather. There was too much rainfall and heat earlier this year. We lost virtually the entire mango production close to our packaging plant because of the rain, and in the centre-north and northeast, where Petrolina is located, it was very hot in October, so most flowers fell from the trees. These should have been in production now, but there is no fruit," laments the producer.
The situation has improved, but the season is already over. "The autumn has started and within a month or so it will start getting cold. It is natural for the production to drop every year in April and May. The season is basically over and we'll return in October/November," he continues, adding that during the months of low mango production (May to October), the company exports root vegetables, such as yams or ginger, so you always have something to do.
"Even if we had a lot of fruit available in June, July and August, we could not sell it, because in that period, Europe has its own products," explains the producer.
As for the domestic market, Piovesan expects it to become important for the company as production starts in April in the centre-north of the country. Currently, the Brazilian market accounts for less than 15% of all sales." The domestic market is strong. Although we are in the middle of a crisis, fruit is something that will not be abandoned. People are still buying fruit, as they know that it is both necessary and tasty," he concludes.
