International Trade and Food Markets in Chile
Chile, like other Latin American nations, has experienced positive economic growth over the last decade and reported a gross domestic product (GDP) of more than US$400 billion for 2015. Similarly, during 2015, Chile’s GDP per capita was of US$23.500 and the national poverty level was of less than 8%, compared to almost 14% of the population in 2005. Because of Chile’s diverse economy and its numerous free trade agreements (FTA), the country has managed to successfully insert itself into the global economy. Due to its economic prosperity, the purchasing power of Chile’s middle and upper classes has increased, opening the way for high-end food products to be sold throughout the country. This article explores the status of food and agriculture markets throughout Chile.
International Trade and Food Markets in Chile
The import into Chile of high-value food and beverage products produced in the United States has gone from a total of US$38.000 in 2000 to more than US$470 million in 2016. The US is Chile’s second largest trading partner, after China, and during 2015 Chile imported an aggregate of almost US$11 billion worth of US-made goods. Meanwhile, Chile exported a total of US$8.5 billion to the US. Since January of 2015, the final clauses of the US-Chile FTA, signed during the early 2000’s, came into full force, which means that agricultural products traded between the two countries pay no customs taxes or duties. One of the key benefits that non-regional suppliers can draw from trading with Chile is that it serves as an entryway to other South American markets. Firstly, Chile’s business friendly environment and transparent legislation allow foreign investors to easily enter the national markets. Similarly, due to the highly developed distribution channels, such as supermarkets and hypermarkets, consumers are familiar with quality foreign brands.
Domestically, the Chilean retail markets for food products totaled US$9.5 billion in sales during 2015 for a population of 17.7 million citizens. During 2014, supermarkets chains with an annual income above US$1.5 billion accounted for little under 50% of all commercial food products sold in Chile. This percentage represents a substantial decrease from 2006, when these supermarkets accounted for more than 62% of all commercial food sales. Mid-size supermarkets increased their market share from 5.6% in 2006 up to 12.1% in 2014. Likewise, small corner stores also increased their sales to account for more than 20% of the total market during 2014. In terms of national presence and proliferation throughout the territory, today there are estimated to be more than 69.000 small corner shops and almost 17.000 supermarkets in Chile.
In term of imports, the largest agricultural goods supplier to the Chilean market during 2015 was Brazil with approximately US$500 million worth of consumer goods. Brazil is followed by the US with a total of US$472 million worth of imports, Argentina accounting for some US$450 million, and Paraguay with approximately US$346 million worth of imported goods during 2015. Given the large amount of trade partners that Chile has, consumers within the national market benefit from a wide array of product varieties as well as competitive prices.