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Latin America’s Fresh Produce Exports Unscathed by Covid

COVID-19 and Fresh Produce Value Chains: A Latin American Supply Response

By Gianluca Corinaldesi and Rohini Thakkar

Last March, when news of food dumping and of shortages of agricultural workers started spreading panic around the world, we were all left wondering about an imminent food security crisis.

But nothing of that scale happened. The global supply chains, responsible for bringing food around the world, adapted quickly to absorb the disruption.

How did that happen?

International consultants and Duke Global Value Center affiliates, Penny Bamber and Karina Fernandez-Stark (Duke alumna) recently spoke at ‘COVID-19 and Fresh Produce Value Chains: A Latin American Supply Response,’ an event organized by the Duke Center for International and Global Studies (DUCIGS). Based in Chile, Bamber and Fernandez-Stark have conducted research in various regions of the world and consulted for major international organizations, including regional development banks, OECD, and the World Bank. They noticed that during the COVID crisis, Latin American countries (LAC) – a region that represents the world’s largest, extra-regional trader of fresh produce – were able to protect their exports and, in a few cases, even increase their fresh produce shipments.

Such resilience, they explained, is a byproduct of a whole industry having adapted—before COVID—to the complexities of a demanding global market.  “They have really come to manage uncertainty well,” Bamber said. International firms developed skills to cope with traditional shocks affecting food supply chains such as weather, diseases, and natural disasters. They have also vertically integrated their production, she added, which “allowed these companies to have full control, full flexibility within their supply chain.”

The second element is geographical and product diversification. “You have to supply from a large number of places around the world,” she continued. “So they [expanded] their sourcing operations into new countries.” This way, they had a heads-up from the first regions hit by the virus and were able to adapt their production elsewhere. Product diversification, on the other hand, set them up to respond to changing consumer demands under COVID.

Finally, Bamber concluded, what is “quite surprising is the degree of automation that’s already happening amongst the Latin American suppliers.” Having fewer workers in large factories helped comply with the COVID restrictions.

The Latin American labor market also contributed. “What has been [quite] different than in the U.S. and Europe,” Karina Fernandez-Stark remarked, “is that Latin America relied on their own labor. The U.S. relies [more] on immigrants: they closed the borders, and workers couldn’t enter.” Even in Chile—the Latin American country with the highest number of immigrant laborers—” the majority of them live in the country. So that was not a problem.” “In the packing plants, what really changed is that they started operating 24 hours [a day], organizing in shifts,” Fernandez-Stark also added.

Both speakers also pointed out that before the pandemic, the whole Latin American region pushed agricultural production towards high-value products (cherries, figs, berries, as opposed to low-margin ones like apples): yet another factor that allowed them to make the most out of the pandemic response.

Duke professor Gary Gereffi (director, Global Value Chain Center) and DUCIG’s director, professor Giovanni Zanalda moderated the discussion.

The webinar was the fifth in the DUCIGS/Rethinking Diplomacy Program: “COVID-19 and Global Supply Chain Series,” supported by the Josiah Charles Trent Memorial Foundation Endowment Fund.

Penny Bamber and Karina Fernandez-Stark are the founders of “Trade Upgrader(link is external),” an international consulting firm dedicated to enhancing the competitiveness of developing countries in the global economy.     

Comments from the audience

Duke students who attended the seminar appreciated Bamber and Fernandez-Stark’s first-hand knowledge of the impact of COVID-19 on food availability and distribution, very different from what they have been reading in the general press.  Jennifer Li, a senior in Economics, commented that,  “it was particularly interesting to learn about the Reefer shortage and its connection to China’s demand for imported pork because while the world was panicking in March over borders being closed and schools shutting down, there were these huge disruptions to the supply chain going on behind the scenes. Pork is pretty popular in China and Lunar New Year is an extremely popular holiday in China with massive movements of food and people travelling home. To think about these major issues that were disrupting supply chains such as shipments of perishable meats and fruits being stuck within Chinese ports when the country locked down was very insightful.

Another senior, Blake McCann, remarked that he is “curious to see how Latin American producers continue to evolve their packing and product type as we go further into this COVID-19 plagued supply chain, but experts Bamber and Fernandez-Stark provided great insight into where they have been so far.” 

Here are some excerpts from the webinar:


Karina Fernandez-Stark

“The supply chain has been able to adapt very quickly. And this has been very beneficial for a lot of the countries around the world that have been able to not only supply food, but also receive the imports from other countries.”

“Why this happened is because more people started eating and cooking at home, not only in the United States; there was a change in China, in Europe and in many countries around the world.”

“And this has been driven also by E-commerce. (Use of) certain E-commerce platforms from supermarkets increased by 300%.”


Karina Fernandez-Stark

“Latin America is the largest extra regional trader… In 2018, it exported around US$46 billion and nine countries of this region exported more than a billion. So, you can see that it is an industry that is really important for Latin America. So, any effect in this sector is going to have a major impact in their economies. And also, another characteristic of this industry is that it has two types of end products – 85% is traded fresh, 15% is traded processed. In the case of Latin America, this combination is 80 – 20”


Karina Fernandez-Stark

“The number one problem was shipping, in terms of availability and also cost.  There were problems with regard to port clearance, a crew quarantine; sometimes crew had to stay two weeks in port; reduction in sailing and…, a complete stop in air traffic at several airports around the world. “

“Another problem was the reefer shortage (refrigerated containers) – the type of containers in which the fruit and vegetable are transported by sea.”

“Another problem was the protocols to protect labor and produce from COVID 19 and the last challenge was the change in the market channel.”


Karina Fernandez-Stark

“…the sector exports from the region just dropped 1% compared to other sectors like tourism that dropped 70% or certain manufacturing products that dropped 50%. But, in general, the decline in total goods export was 15%. [A 1% decline thus, was] not bad for the region and they were very quick to adapt in their supply chain.”


Penny Bamber

“These agro-industrial companies are a combination of both domestic and foreign firms.…So we have this mix of strong domestic, strong northern foreign direct investment and strong southern foreign direct investment which has created a great culture for capability development. So as the region has worked and competed in the sector, it has become a world class supplier and these firms have become used to operating in a demanding sector… the demand is driven by countries such as the US, Europe….Those markets are dominated by large supermarkets, which have very strict standards. So, in order to be able to compete and supply that region, these companies have had to develop a lot of skills, whether it’s weather, disease, natural disasters that are affecting the supply chain. They’ve come to manage uncertainty well”.


Penny Bamber

“Having this fully vertically integrated operation has really allowed these companies to have full control, full flexibility within their supply chain; they could redirect product both before [shipping] and in transit, work with their packing operations to repackage for new markets and manage product flows to high demand areas. “


Penny Bamber

“…in order to be a 365-day supplier, you have to supply from a large number of places around the world. And so we’ve seen these different companies both expand their own production area…[and]…move their sourcing operations into new countries…to diversify that risk.”

 “…the Latin American suppliers were really… in the third cycle of COVID to come about. They had already seen how different countries were beginning to operate within this context… that gave them a heads up on what they needed to be able to do… make sure by the time COVID became a real crisis in Latin America, to ensure that they had the protocols in place to protect their workers”


Penny Bamber

“Over the course of time, these firms have been doing it to increase the value captured for themselves as well as the quality of the products and to reduce the risk. So, we’ve seen producers diversify across a really wide range of products.”

“…this has given them flexibility in response to changing consumer demands under COVID-19…as well as spread out [production] to reduce impact of a bad season on overall annual profitability…”

“When we look at the producers’ 2019-2020 season, they’re reporting higher profitability than they were in the 2018-2019 season.”


Penny Bamber

“These technological upgrades have been put in place to remain cost competitive [and] efficient, to be able to respond to the really strict [requirements] of the supermarkets that have become more and more demanding over time

“one of the things that’s helped now in terms of COVID is that you have far fewer people in the factories and far less risk of infection or even cross contamination within these pack house operations.”


Penny Bamber

“Companies have upgraded all the way through the end of the value chain into their own distribution and their own marketing and as well as diversified their end markets. They have distributors in major markets and emerging markets worldwide and have sales & marketing teams worldwide (e.g. LAC, Florida, Rotterdam, Shanghai)”

“Their sales are divided across geographic markets which is a unique characteristic of LAC”

“This has been  20-30 years in the making; a very strong upgrading story which prepared them …to be able to respond very quickly to this crisis, and I think this has important implications for other regions around the world.”

Gary Gereffi

“A takeaway that’s very surprising to me is that COVID 19 had caused so much slow down among all world regions, that to have a big industry like this that didn’t lose dynamism that basically, I think, is a real surprise that this is one of the few industries that wasn’t taking a nosedive in terms of output and demand. And I think one of the reasons that you’ve highlighted is just how high tech this INDUSTRY is!”


Karina Fernandez-Stark

“What has been really different from the European Union or the United States is that Latin America relied on their own labor inside the country. And what happens in the United States is that they rely [more] on immigrants. So as soon as the pandemic started in, for example, in the United States or in European Union they closed the borders. And they couldn’t allow workers to enter”

Penny Bamber

“Many industries got hit…hard and ended up laying off their workers, particularly,…their temporary workforces and so there was an ample supply…within the labor market”


“.. it’s of extreme importance to Mexico…because Mexico is by far the largest exporter of these products from the region. And the majority of it, about 85% is going to the United States. So, they are very interconnected with the US and anything that interferes with that flow becomes very important.

Giovanni Zanalda

“DUCIGS was fortunate to recently host two webinars  with Martha Bárcena Coqui, Mexico’s Ambassador to the U.S. and Christopher Landau, U.S. Ambassador to Mexico in which they both remarked that the USMCA trade agreement is working well even in light of COVID 19.”

Gary Gereffi

“Fresh produce exports have to be able to get products all year round to all parts of the world, and both hemispheres. So that means you need as many trade agreements as possible linking all the countries so that you’ve got a continual supply of this fresh produce everywhere.”