Ag-Network-Chile

Comparative and Competitive Advantage

The marine ecosystem off the coast of Chile is highly productive, as is its Exclusive Economic Zone (200-nautical mile EEL). Together with the cold waters of the Humboldt Current, this provides a large variety and abundance of resources for carrying out industrial small­ scale extractive fishing activities.

Chile 's water quality, ecosystem and geography have helped to develop a large number of cultivation resources. Substantial investments in leading edge technology have been made in all stages of the process: the fleet, landing, plants and transportation.

The companies involved have done their part by making a significant and efficient effort in marketing which has resulted in the development of new products and markets.

Local shipyards, which have achieved a high degree of quality and efficiency, add value to landings and position Chile as a major supplier for fishing vessels whose main destinations are other nations such as Korea , Norway and Iceland .

Fishmeal, cold-storage and canning plants have been subjected to and approved by rigorous Quality Assurance Programs (QAP) required by the world's most demanding markets, such as the European Union, the United States and Japan .

The ongoing and joint commitment by the fishing industry and regulatory agencies in matters as important as resource sustainability, the adoption of management measures by imposing closure seasons and global catch and landing quotas, are additional factors that help ensure the industry's future competitiveness.

Lastly, intense and prolonged research and penetration work has been conducted, and this translates into growth in terms of production volumes, diversification of marine resources exploited and the processing of new products.

 

 

 

Exports

The Chilean fishing and aquaculture industry has grown remarkably in the last two decades, focusing primarily on foreign markets. Over the past decade, 76 percent of the industry's output has been directed to foreign markets.

 

TABLE 1 : Fishing and Aquaculture Export Figures

Year	Volume (tons)	US$ Millions
1997	1,351,851	1,912
1998	932,187	1,874
1999	1,071,811	1,784
2000	1,052,560	1,874
2001	1,157,501	1,837
2002	1,212,418	1,941
2003	1,185,183	2,217

Source: Fishing and Aquaculture Products in 2003.

 

TABLE 2 : 2003 Fishing and Aquaculture Exports Figures, by Geographical Area

Geographical Area	US$ Value	Market Share (%)
Asia & Oceania	999,302,154	45.0%
North America	704,650,702	31.7%
European Union	368,832,938	16.6%
South America	75,170,807	3.3%
Other	69,060,000	3.1%
TOTAL	2,217,014,232	100%

Source: Chilean Central Bank.

 

TABLE 3 : Main Destinations of Fishing and Aquaculture Exports Products in 2003

Countries	FOB Amount (US$ Thousands)
USA	663,688
Japan	602,643
China	138,364
Spain	135,364
Taiwan	135,513
Germany	81,267
France	68,606
Brazil	60,480
Italy	39,333
Others	390,925
TOTAL	1.941.767.956,84

Source: Chilean Central Bank.

 

Extractive Fishing

Chile stands out owing to its large variety of hydro-biological resources which are due to its geographical features and the particular characteristics of its geography and waters. Down its almost 80.000 kilometers of coastline if one includes the areas surrounding the islands in the southernmost areas three major fishing areas can be identified. The northern zone focuses on anchovy, jack mackerel, sardine and common mackerel, mainly for fishmeal; the central-southern zone is dedicated to fishing for pelagic species and other fisheries like common hake, crustaceans such as nylon shrimp and yellow and red prawn; and lastly, the southern-extreme south zone, where fishing concentrates on demersal resources such as Chilean hake, Golden kingclip, tail hake, Chilean sea bass, and benthic resources such as algae, sea urchins, clams, Chilean loco (Concholepas concholepas) razor clams and others.

 

TABLE 4 : Exports of Extractive Fishing by Geographical Area - 2003 (US$ Millions)

Geographical Area	Value (US$ Millions)	Market Share (%)
Asia & Oceania	508.9	52.4%
European Union	258.9	26.6%
North America	115.8	11.9%
South America	32.0	3.2%
Africa & Middle East	20.6	2.1%
Central America-Caribbean	15.1	1.5%
Other	19.6	20.%
TOTAL	970.9	970.9

Source: Chilean Central Bank.

 

TABLE 5 : Main Export Products from Extractive Fishing - 2003 (US$ Millions)

Products	(US$ Millions)
Fishmeal	370.2
Jack Mackerel	101.6
Chilean Hake	95.2
Chilean Sea Bass	52.5
Sea Urchins	48.1
King Crab	16.9
Algae	16.9
Albacore	12.3
Other	257.5
TOTAL	970.9

Source: Chilean Central Bank.

 

Aquaculture in Chile

Chile's aquaculture industry has significant potential for expansion. In 1998 it ranked as the world's number one producer of farmed trout and the second world producer of salmonids while regarding Latin America it ranks second, after the United States in terms of production, a situation that remains the same to date.

Farmed resources are varied and primarily involve exotic species, especially salmonids, which are expected to continue for many years to come to be the most important activity in Chilean aquaculture. There also are other species with interesting growth trends, such as scallops, oysters, turbot, Chilean loco, halibut, hirame, sturgeon and catfish.

Growth over the last decade is due mainly to Chile 's natural conditions, i.e. vast coastlines, lakes and rivers. This situation is optimal since it provides a healthy, pollution-free and virus free environment, ideal for farming.

 

TABLE 6 : Main Aquaculture Markets - 2003 (US$ Millions)

Geographical Area	Value (Thousands of US$)	Market Share (%)
North America	592,4	47.0%
Asia & Oceania	487,4	38.6%
European Union	117,0	9.3%
South America	46,8	3.7%
Africa & Middle East	1,1	0.08%
Central America	0,6	0.04%
Others	14,6	1.1%
TOTAL	1,259.9	970.9

Source: Chilean Central Bank.

 

TABLE 7 : Main Aquaculture Export Products - 2003 (US$ Millions)

Products	Value (US$ Millions)
Salmon & Trout	1,147.0
Algae	59.6
Mussels	25.4
Scallops	20.7
Oysters	2.1
Turbot	1.8
Abalones	1.6
Other	1.7
TOTAL	1,259.9

Source: Chilean Central Bank.

 

Free Trade Agreements Benefits for Fishing and Aquaculture Products

United States :

The Free Trade Agreement signed with United States helps Chile to strengthen and enhance access for its products and services to the largest and most stable economy in the world. It means having clear and transparent rules for trade in goods, services and investment, and facilitating decision-making for Chileans who have business dealings with the United States .

Specifically, in the case of the fishing industry, all fresh, frozen and smoked products will no longer be subject to duties, while most canned and prepared products will enjoy zero duty status either immediately or within a period of four years.

In 2003, 30 percent of Chilean fishing exports were made to the United States . The main products with important increases compared to 2002 were salmon, trout, sea bass, albacore, orange roughy, king crab, snow crab and canned clams, among others.

European Union:

Over 75 percent of the fishing products included in the Agreement with the European Union benefit from reduced tariffs. They became effective as soon as the Agreement came into force or within a maximum period of four years. The other fishing products will enjoy duty-free status in periods ranging from seven to ten years, except for the four percent which will continue to be excluded from this status.

The main fishing products that benefit from the Agreement are: Salmon, hake, frozen fish, fish fillets, king crab, prawns, scallops and octopus. In addition, these include products prepared with salmon, canned crustaceans and mollusks.

In 2003, fishing exports from Chile to the European Union amounted to US$368 million; products from extractive fishing accounted for US$258 million while those from aquaculture amounted to US$110 million.

Korea :

When this Agreement becomes effective, 67 percent of the fishing and aquaculture products shall benefit from instant tariff relief, which covers 80 items.

Among the main products that will benefit from this situation are fresh salmon fillets, canned mackerel, Pacific salmon, sea urchins, fresh hake, fresh sea bass, Gracilaria algae, King crab, Snow crab, clams, albacore fillets, and canned Chilean loco, among others.

Korea represents a US$700 million market for sea products and, specifically for Chile , this trade agreement is intended to increase Chilean exports to the Korean market by U5$75 million.

• E-mail: info@prochile.cl
• Web: www.chileinfo.com

Return to Top of the Page