This is a best prospect industry sector for this country. Includes a market overview and trade data
Last Published: 10/24/2018
Overview
Agriculture is one of the main economic activities in Chile, accounting for 28% of the country’s total trade and 11% of its total GDP.  Approximately 20% of the country’s labor force is engaged in agriculture and related services.  Chile’s economy is driven by exports, concentrated primarily in copper and its agricultural sectors:  fresh fruit, forestry and fishery products.   The agriculture sector is projected to grow by approximately 4 % in 2018 (above the country’s economic projected growth of 3.5%), according to SNA, Chile’s National Agriculture Society.   After the sector’s impressive growth by 9.5% in 2015, and 3.7% in 2016, the industry dropped to 2.5% in 2017, mainly due to low production of livestock and poultry, and low crop production, especially corn.  The fruit and forestry subsectors growth were led by dried fruit and kiwi production and exportation, as well as wood and cellulose, who have maintained high prices for the last six months.   

Agriculture faces a difficult scenario due to high labor and energy costs.   Moreover, in recent years, water resources have become more scarce due to droughts in northern and central Chile.  As a result,, farmers and agriculture-related companies have not invested in new projects, machinery and equipment, but mainly purchased replacement equipment. 

The U.S. is the main supplier of agriculture machinery and equipment (21% in 2017), followed by Italy (15%), and Germany (12%).  However, China is a strong competitor and has increased its exports, reaching 9% in 2017.   The importation of agriculture machinery and equipment in 2016 decreased by 8.4%, and by 17.4% in 2017.   Nonetheless, the economic outlook for this sector is brightening.  Chile’s economy is projected to grow by approximately 3.5%, with the agriculture sector expected to grow 4%.  During the first semester of 2018, imports totaled almost $ 200 million, projecting a yearly figure of over $ 400 million since most of machinery and equipment are imported between August and December (spring and beginning of summer).  Agriculture machinery from the U.S. has a high reputation, and is in demand, but U.S. companies must be aware that the market is small and very competitive.   

According to the World Bank, the world’s population will reach approximately 10 billion by 2050, requiring an increase of 60-70% of agriculture production to meet the population’s demand for food.   However, this high production must be carried out on the same surface area with less water, and even greater climate instability due to climate change.   Chile faces an additional problem:  a scarcity of labor for agricultural production, which according to ILO - UN has decreased from 81% in 1950, to 9% in 2017 in Chile.  

Chile is stressing innovative technologies to address the lack of labor and water in the production of its major crops.   Robotic equipment such as unmanned tractors (for planting, harvesting, fumigating, weed removal), and robot/workers will be required in some areas of the country.  Drones are already being used (although not on a massive scale) to collect data on soil condition, hydro availability, harvest conditions, fertilizer presence, etc.  The current market for specialized and energy efficient machinery and equipment is a best prospect since it reduces labor, saves energy, and subsequently lowers production cost.  Productivity has increased in recent years, but needs to increase even more, with the use of new and higher efficiency machinery, technology, irrigation systems, natural fertilizers and soil enhancers.   The industry trend is to mechanize agriculture processes such as harvesting, and to use other labor replacement machinery and equipment, which are in high demand by Chilean farmers.   Chile must reduce production costs to remain competitive in the international market, of which it is an important food supplier. Chile’s agriculture is focusing on sustainability and natural products with the Chile brand.  Organic production has increased and natural fertilizers and pesticides are needed.  Chile’s agriculture production aims at being as ‘green’ as possible, and to remain as such, obtaining better value for its exports, and contributing to a healthy environment. 
 2015201620172018 estimated
Total Local Production20.012.012.013.0
Total Exports9.68.88.89.0
Total Imports483.3442.6365.7420.0
Imports from the US89.276.876.385.0
Total Market Size493.7445.8368.9424.0
Exchange Rates: 1 USD654677649640
(total market size = (total local production + imports) - exports)
Units: Millions of USD
Source: Chilean Customs Data
 
Leading Sub-Sectors
  • Smart agriculture “machine learning” devices for agriculture processes such as planting, watering, fertilizing, collecting data, etc.
  • Equipment/drones to effectively monitor production conditions, propose improvement processes, and increase crop yield.
  • Irrigation infrastructure is required to maximize efficiency of water usage.  There is an important water shortage, and investment in irrigation and other related systems represent an opportunity for U.S. agriculture machinery manufacturers.
  • Water storage systems and water transportation systems (and supplies) to line canals, tunnels and underground reservoirs.  
  • Mechanization of agriculture processes including fresh fruit harvesting equipment.   Machinery to replace labor. 
  • Energy efficient machinery and equipment (decrease energy consumption).   Environmentally friendly machinery and equipment (reduce impact on environment and provide higher sustainability).
  • Equipment, systems and supplies to obtain traceability of crops. 
 
Opportunities
FRUITTRADE 2018, October 3-4, 2018, Santiago, Chile
Fruittrade (www.fruittrade.cl) is the trade event/seminar related to the fruit and vegetable production and exports.  The event brings together producers/exporters, with international buyers of fresh fruit, dried fruit, vegetables and organic products.   Fruittrade includes a business roundtable and an International Convention, featuring technical seminars on trade, technology, production, innovation and management. 

SAGO-FISUR 2018, November 15-18, 2018, Osorno, Chile
Sago-Fisur (www.sagofisur.cl) trade show, whose first version took place in 1917, focuses mainly on dairy and livestock, and regional fruits/berries production.  The event is attended by suppliers, distributors, and service providers related to the agriculture sector, and includes technical seminars, and the most important exhibit of pedigree cattle and equine.  The Chilean Association of Slaughtering Plants organizes a special seminar on the subsector. 

IFT Agro 2018, May 7-9, 2018, Talca, Chile
IFT Agro is the largest and most important agriculture trade show in the country.  The International Trade Show, IFT- Agro 2019, is an industry trade event committed to bringing together leading suppliers of technologies to produce agricultural goods, products and services with decision-makers from small, medium and large producers who need access to technology to become more competitive in this industry.

Web Resources
  • ODEPA, Oficina de Planificación Agraria (Chilean Office for Agricultural Policy Studies): www.odepa.cl
  • MINAGRI, Chilean Ministry of Agriculture:  www.minagri.gob.cl
  • SAG, Servicio Agrícola y Ganadero (Agriculture and Livestock Service):  www.sag.gob.cl
  • SNA, Sociedad Nacional de Agricultura (National Association of Agriculture): www.sna.cl
  • INDAP, Instituto de Desarrollo Agropecuario, (Institute of Agriculture Development): www.indap.cl
  • SOFOFA, Sociedad de Fomento Fabril, (Industrial Manufacturers Association):  www.sofofa.cl
For additional information, please contact CS Santiago Commercial Specialist Mary L. Lathrop, Mary.Lathrop@trade.gov.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Chile Agribusiness Trade Development and Promotion