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Santiago de Chile -July 2018

magazine Important international events such as IPA Congress and INC, analyze the situation of the world industry.

International situation in crops and markets

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Editorial

O

ver the past 50 years, global prune consumption has had its ups and downs, but after tallying the numbers, prunes have experienced an annual growth rate of 1%. This upward trend reached its peak in 2012, only to begin declining the following year for a number of different reasons, but mainly due to drops in domestic markets in Russia, China and Brazil, and to a lesser degree, Europe. With the first half of 2018 come and gone, all signs are indicating that the trend seen over the last five years will remain unchanged.

Editorial Board Pedro Pablo Díaz Andrés Rodríguez María Paz Soto Christian von der Forst Jorge English General Publisher Christian von der Forst Edition and Design PuertoC Comunicaciones & Marketing. A magazine of Chile Prunes Association AG

We saw proof of this at the events attended by – and featuring – Chile Prunes in the month of May: the International Nut & Dried Fruit Council (INC) Congress, held in Seville, Spain, and the International Prune Association (IPA) Congress in France. After both events, I can safely say that despite the problems we may be facing in terms of global consumption, along with certain sporadic cases of overstocks in France, or specific, localized weather problems in California and Argentina, as an industry, we have everything we need to succeed. The product we offer the world is perfectly aligned with global trends aimed at better, healthier nutrition. Few foods can offer as many benefits as prunes, not to mention its great taste and many different forms of consumption. This is why we are the creators of a new upward trend in terms of global consumption. Let’s conquer new markets and rekindle interest in the ones that are lagging behind. We have a tough, but challenging task ahead of us.

Andrés Rodríguez Chile Prunes Executive Director

Chile Prunes Association, address Cruz del Sur 133 of. 703 Las Condes - Santiago - Chile (56 2) 24724783 - info@chileprunes.cl

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Briefs Save the date: 6th ExpoCiruelas Save the date: on November 21st, the 6th version of the Prune Expo (ExpoCiruelas) will be held in Chile at the Monticello Convention Center. This is one of the most important congresses in the world for the industry, especially considering that our country is also the world’s number one exporter. During this prune summit, as always, we will take stock of the season and present future challenges, among other issues.

Onsite Pruning Workshop In the Santa Cruz area – Yaquil farm to be exact – Chile Prunes organized and coordinated a field trip to tackle several different issues relevant to growers.

The following topic was discussed: “Winter pruning in the European plum tree: fundamentals for producing high quality prunes; production potential and load regulation”. The activity counted with impeccable facilitation assistance from Tomás Labbe, Juan Pablo Sotomayor, Cristián Valdés and Cristián Vera. The workshop, which was held on May 22nd, was attended by 70 people, including growers and consultants linked to the industry, who showed a great level of interest for these types of activities. Our facilitators provided basic concepts and recommendations to obtain high quality prunes, and, as part of that objective, winter pruning is the task that most directly affects results season after season. In addition, this activity is closely related to each orchard’s production potential and knowing the production history of each particular zone and orchard.

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In the world

Attempting to increase the demand for prunes

Chile Prunes Member Companies Embark on Indian Tour

I

n India, the consumption of nuts and dehydrated fruit has steadily increased over the past few years. However, prune statistics have not reflected this growth, yet. In fact, between 2013 and 2017 – with the exception of 2016 – exports to India from a number of different countries remained in a stable range between 610 and 704 tons, adding up to 620 tons last year. Increasing consumption in this country was precisely the objective of the Indian tour organized by Chile Prunes between the 26th and 27th of June. The trip was attended by Frutexsa, Prunesco, Good Valley, SuperFruit and Onizzo. In order to illustrate just how untapped this market is, Sebastian Plaza, sales and production manager of Frutexsa, points out that 620 tons represents only 5% of the prunes his company exports to the rest of the world.

Mr. Ceroni found it interesting that nuts and dehydrated fruit are not only sold at farmers’ markets (mainly dates), but also in high-end supermarkets that target medium to high income groups (in the case of walnuts). In any case, José Antonio Soffia, market manager for Superfruit, thinks that India’s Meeting with Importers humidity, along with sanitation concerns, make it The delegation met with traders, importers, packers hard to offer prunes in open-air markets or in bulk and authorities, such as Himani Bajaj, ProChile’s trade – as they do in Mexico – making supermarkets the advisor in India. best sales channel. “We met with 6 or 7 industry-related companies, many of which focused heavily on dates, walnuts and raisins, with a low requirement level for prunes because of a lack of promotion or knowledge about the benefits this product has to offer”, said Bruno Ceroni, commercial manager at Good Valley. The Indian companies that met with the group included VKC Nuts, Hindasaia, Best Fruits, Tulsi, Indian Dried Fruit Traders and First Momentum Exportation.

Agustín Marín, commercial manager at Onizzo Southern Sweetness, highlighted India’s large population as its main source of value. “If we could reach just 1% of India with our prunes, we’d be taking about a population of 13 million people. Nobody in the prune export world has taken this market very seriously. They don’t know our product very well, but they have celebrations and festivals where prunes could easily be sold”.

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Chile Prunes Attends INC Seville and IPA Congress in France

Challenges for Prunes: Increase Demand, Better Quality and Dissemination of Nutritional Benefits

Is necessary supporting research into health and nutritional benefits, allowing us to position this product as a Super Food

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Cover Topic

T

wo important events for the prune sector took place in the month of May. Between the 21st and 23rd of May, the International Nut & Dried Fruit Council (INC) Congress was held in Seville, Spain, while in Villeneuve-Sur-Lot, France, a new version of the International Prune Association (IPA) Congress was carried out between the 28th and the 31st. After both events – in which Chile Prunes had a leading presence – conclusions were drawn regarding the major issues facing prunes throughout the world: - Increase global demand.

Ante cientos de asistentes, Andrés Rodríguez expone en el Congreso del International Nut & Dried Fruit Council (INC), llevado a cabo en Sevilla, España

- Improve quality, focusing on size and sugar content. - Promote prunes’ nutritional benefits. Regarding the increase of demand – an issue discussed at both Congresses – “we are currently undergoing a worldwide situation in which there is an ever-increasing demand for healthy foods. This implies significant enhancements for the entire nut and dehydrated fruit category. However, we also have to increase the specific demand for prunes, which has remained relatively flat since the nineties, except for some spikes between 2009 and 2012”, says Andrés Rodríguez.

According to Mr. Rodriguez, there are three paths for increasing demand: promotion, developing new markets and research, in other words, promoting the results regarding the health benefits provided by prunes. Andrés Rodriguez – who participated in a round table session on dehydrated fruit as a worldwide prune representative at INC Seville – provided an overall snapshot of the product, pointing out that “prunes have been gaining more and more importance at this world congress. We had the chance to discuss the current situation and the great challenges ahead of us”.

PRUNES WORLD CONSUMPTION (MT) 300.000 250.000 200.000 150.000 100.000 50.000 0

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

YEARS

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Cover Topic

Quality and Benefits Regarding the overall global prune season, we’ve noticed a drop in production in California. Due to weather problems, 68 thousand tons are being projected compared to last year’s 95 thousand.

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birthplace of the French prune and its main pioneers, a place renowned all over the world for its great tradition and quality in prunes.

Chile will also suffer a slight drop, moving down from 73,700 to 71,000 tons, while France will see a larger production than in years past; however, they have to deal with another problem: a high amount of accumulated stock. Finally, the fourth largest producer in the world, Argentina, will move from a low harvest in 2017 (12,600 tons) to an estimated 35,000 tons this period.

Among these idyllic surroundings, with the smell of fruit wafting in from a distance, a deep debate was held regarding prunes’ current situation. It was agreed that nowadays, apart from demand, another major issue is “continuing to enhance quality in all countries, and supporting research into health and nutritional benefits, allowing us to position this product as a Super Food”, says Andrés Rodríguez.

After Seville, we attended the IPA Congress in Villeneuve-sur-Lot, in the French commune of Agen, the

In the past few years, IPA has carried out studies to show the contributions prunes have to offer as a bone


Cover Topic

density regenerator. These studies and other similar efforts are financed by all of the IPA’s member countries. Regarding the consensus that we have to continue working hard on quality, which mainly implies larger sizes and greater sugar content, Chile has a long-term plan through a technical committee that involves a number of different organizations to improve the work performed in orchards, especially in terms of pruning and thinning. Diversification of the world’s markets is another highly relevant topic. “Over the past few years, we have seen some countries go through certain economic difficulties that have had repercussions on prunes, such as Mexico, Brazil and Russia. For this reason, it is important to

diversify the amount of client countries as much as possible. The easiest route would probably be to focus on countries that have a tradition of nut consumption, and, if possible, countries with low tariffs. One thing is certain: it is hard to find both traits in one single country”, adds Jean-Luc Jagueneau, representative of the IPA and France’s Comite Economique du Pruneau. A day and a half of conferences was followed by visits to plants and orchards and an exhibition on the history of the prune and the IPA, proving once again just how successful these IPA-organized meetings are, as they bring together the world’s main prune producing nations. We would like to extend an invitation to everyone to the next congress, which will be held in South Africa during the first week of November, 2019.

Visita a los huertos franceses.

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Events

A few words from Juan Pablo Sotomayor, Technical Manager of Frutexsa

A Technical – Professional (and beyond) Look at the IPA Congress held in France

W

e were located in the Villeneuve-Sur-Lot area, a beautiful commune with deeply rooted prune traditions, but where one can also find walnut trees, European hazelnuts, cereal crops and vineyards. The prune culture in this area is enviable. Wherever you go, you see people enjoying the product. We even went to an organic plant where we got to taste a beer made from prunes. The venue chosen to hold the congress was very original and appealing: the auditorium of an agriculture school. As always, each grower nation made their presentations at the venue. In France, this year they are expecting average sizes of between 55 to 60 units per pound. France’s average production is 4 dry tons per hectare (in Chile, it is 7.5 dry tons per hectare). THE MOST RELEVANT POINT OF THE EVENT INVOLVED FRANCE’S STOCK LEVELS. France usually produces around 40 thousand tons, 25 thousand of which are for domestic consumption, leaving 11 thousand for exports and the rest remains as stock. However, thanks to favorable weather and other reasons, the last two harvests added up to 50 and 52 thousand tons, respectively. This had never happened before. We’re talking about good, large-sized fruit; fruit that needs to find an export destination.

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Between Monday, May 28th and Thursday, May 31st, a new IPA Congress was held in VilleneuveSur-Lot, a commune in the south of France. As an active member of the organization, Chile Prunes extended an invitation to the representatives of the Chilean industry to participate in this event as a relevant stakeholder within the global context of the product. Chile was represented by companies such as Sofruco, Prunesco, Frutexsa, Pacific Nut, and Chile Prunes itself as a trade association.


Events

Juan Pablo Sotomayor enjoying a prune beer.

In the United States, they had some rain-related weather issues during flowering that affected some areas in California – it was not a generalized problem – bringing production levels down compared to last year. Argentina (specifically the Mendoza area) showed how they are keeping their production area steady at around 15 thousand hectares, with a production of 40 thousand tons and evenly distributed sizes, mainly between 61/80 and 81/100.

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What I Saw at the Orchards The orchard visits were very nice. They looked wellmanicured and organized. I got the chance to see where the orchards were geographically located, what the tree rows were like, how they were handled and what the trees were like… here they produce 7-8 thousand kilos per hectare. The orchards we saw estimated their production at about 7 to 8 dry tons per hectare with very good sizes. What did we see in terms of production changes? Today, we are seeing 5 x 2.5 high-density plantations arranged in a central axis. They look for precociousness in their production. 60% of orchards are formed in an open center or vase-shaped system, while 40% use a central axis. Traditional tree spacing is 7 x 7 meters, which is seen in older and in-production plantations. This spacing allows plenty of light to reach each tree. We did notice new orchards being planted at high densities of 2.5 x 5 in an attempt to obtain quicker production. Dense plantations grow precociously, which should not affect size. These orchards are planted with a central axis. French orchards generally have grass or green coverage between rows. I believe they manage their trees this way because it rains in spring and summer (between 500 and 600mm) and they need some ground to perform day-to-day activities and harvesting. We even saw orchards with no irrigation. In France, harvesting is done by performing at least five passes through the orchard, gently shaking the branches to ensure that only ripe fruit falls from the trees. Over there, they own their own machinery, unlike Chile, where we rent machines and branch shaking passes are only done once – generally when sweeps are performed – when we can do it, not when we want to do it. Given that it rains a lot in France, everything is dried in ovens. In addition, 60% of orchards are formed in an open center or vase-shaped system and the remaining 40% is arranged in a central axis.

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From left to right. Federico Montes, José Tomás Quezada, Joaquín Tagle, Facundo Lozano and Diego Gil.

Regarding Producer Trade Associations, in France there is a cooperative scheme that trades about 60% of all production.

In France, harvesting is done by performing at least five passes through the orchard, gently shaking the branches to ensure that only ripe fruit falls from the trees.


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Interview

Key Issues for New Chilean Minister of Agriculture, Antonio Walker After Sebastián Piñera’s government’s first 100 days in power, we got to learn some of his opinions and ideas regarding the most relevant agricultural issues for the upcoming four years.

R

lecently appointed Chilean Minister of Agriculture Antonio Walker is a man with a long-standing history in the country’s agriculture sector.

Born into a family with close political ties, Walker is the founder and general manager of farming company Wapri, chairman of Fruséptima and vice-chairman of Fedefruta. Chile Prunes caught up with the minister at a PMA Chile event and asked him about Sebastian Piñera’s government’s first 100 days in power. Just a few days earlier, a significant increase was experienced in the tariffs paid by Chilean walnuts entering India, passing from discretionary payments of 30% to 100% in response to tax measures carried out by Donald Trump in the United States. Obviously, every single journalist asked him about the situation: “We took quick action as a country at a Treasury level and through the General Directorate of International Economic Relations (Direcon). It is a complex issue and we hope for a favorable decision”, he stated with caution.

014

Executive director of Chile Prunes, Andrés Rodríguez, talks to the Minister, Antonio Walker

Is it possible for this measure to affect other products in the future, such as prunes? No, I see it as a very specific issue, but we will have to wait and see how events play out. In any case, I know that prune exports go to highly diversified destinations, which helps mitigate a larger impact caused by these types of measures (side note: exports reached 80 countries in 2017, adding up to 76,515 tons and US$ 175 million, which represents an 11% increase compared to the previous period).


Interview

Is there a general policy for nuts and dehydrated fruit on your Ministry’s agenda? It is definitely part of our agenda. We are meeting with nut and dehydrated fruit trade associations to get to know their specific needs, but in overall terms, we make no difference between them and fresh fruit, because when we negotiate international treaties, we negotiate with both industries as a whole. Water Availability For the Ministry of Agriculture, availability and proper use of water resources are the greatest challenges the sector will have to face in the short and medium term. “We want to achieve sustainable agriculture. For this reason, the topic of water has two major issues: irrigation security and the Water Code. The first point is critical, as it could be the main obstacle that must be overcome by the Chilean agriculture industry. We also have to make a Water Code that accurately represents the country and is born from a major national accord, including issues such as climate change and the assurance of human consumption”, adds the Minister.

work could be done – with major irrigation projects, like reservoirs, which are highly expensive, around 50 thousand dollars per squared hectare, but we have to streamline the rate of production of these reservoirs. In the last 40 years, we have built 0.8 reservoirs per government. At that rate, we will not achieve an agriculture industry that can satisfy global demand. Will there be greater government support to promote Chile as a food and agriculture powerhouse? I would like to reinforce just how important the Chilean agriculture sector, and the food sector in general, is to this government. It is an area that provides one million jobs, supports regionalization and renewable and healthy resources, and, after mining, it is our economy’s second most important industry, contributing US$ 16.5 billion in exports. Agricultural demand grows much more than agricultural supply, which is great news, but we need to know how to take advantage of that news.

Walke r al so adde d t h at the problem is caused by highly precarious irrigation infr astructure. “ In Chile , we have water, but we need more reservoirs, canal lining, technology-based irrigation. We have to go to Congress with the best possible arguments when we talk to representatives and senators. We need to debate this issue and reach an agreement”. Specifically speaking, we need to complete our aquifer infiltration work – we’ve already detected 80 places in the country where this The Agriculture Minister among representatives from the fruit industry in an event of the area in Chile

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Analysis

Chile Prunes Information

Hard Numbers are in for 2018 Production

T

lhe 2018 harvest came in pretty late in Chile. As the year goes by, new indicators roll in, allowing us to come up with more concrete numbers, which have added up to a grand total of 86,189 tons of production, 82,564 tons of which are earmarked for prune sales, with the remaining 3,625 tons (equivalent weight in prunes) being sold as fresh plums. According to Erick Cea, technical project coordinator for Chile Prunes A. G., up to May 31st of this year, estimates show that the industry had received nearly 73,000 tons, which represents 88.4% advancement in terms of the projected harvest. The expert also added that based on the fruit that has been received and measured to date, the average expected size is 74 units/lb., which is an improvement over last year’s 78 units/lb. “This is an improvement compared to last year, but we still expect to continue improving in terms of size; and in order to do so, our focus and technical work is aimed at improving this parameter”. Pruning and Thinning Regarding pruning and thinning, Erick Cea says they were performed in a better way than last year. “The industry has begun to understand the importance of these kinds of orchard management. Some weather issues led to lower production in a few important areas of the Colchagua valley, which also helped to improve sizing. We have worked hard to promote practices that favor the obtainment of high quality fruit, and in that sense, incorporating better pruning techniques, as well as the mechanization of these tasks, are practices that – along with thinning – have a strong impact on the final size we obtain”.

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Analysis

The estimated average size for this season in Chile is 74 units/ lb., which is an improvement over last season’s 78 units/lb.

According to the expert, it is becoming clear that producers are more and more aware of the impact fruit quality has on trade. They understand that there is a greater demand for this type of fruit. “Growers are constantly searching for management techniques and practices that can help them improve their level of production, and here at Chile Prunes, we are promoting new initiatives to achieve these goals”. Erick Cea also adds that there is still room to improve and implement new techniques and technology in terms of irrigation and fertilization, responding to the needs of each zone and each orchard. There is no single recipe that can always be applied in the same way, “therefore, knowing your orchard, its potential and its production history allows growers to make better decisions”.

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Sector numbers

Chilean Prune Worldwide Export Annual figures YEAR

UNIT

VOLUME

ANNUAL VARIATION

FOB IN U$

ANNUAL VAR.2

2017

Kgr.Netos

76.515.000

9,1%

175.000.000

11%

MID. PRICE 2,29

2016

Kgr.Netos

70.104.829,94

9,06%

157.948.818,50

-21,2%

2,25

2015

Kgr.Netos

64.278.564,14

-0,31%

200.336.443,15

-14,1%

3,12

2014

Kgr.Netos

64.478.292,93

2,86%

233.350.663,38

54,5%

3,62

2013

Kgr.Netos

62.684.098,89

-18,73%

150.991.753,27

5,97%

2006

Kgr.Netos

42.052.782,12

2,41

94.329.966,89

2,24

SOURCE : ODEPA

Exports to June of each year YEAR

UNIT

VOLUME

ANNUAL VARIATION

FOB EN U$

ANNUAL VAR.

MID. PRICE

2018

Kgr.Netos

25928458,8

-22,90%

60.033.100

-19,70%

2,32

2017

Kgr.Netos

33629260,72

44,22%

74.759.438

28,90%

2,22

2016

Kgr.Netos

23317281,04

16,41%

57.998.605

-14,43%

2015

Kgr.Netos

20030283,15

2,49

67.777.327

3,38

SOURCE: ODEPA to June 23rd and Checkpoint to June 30 th.

Exports per month MONTH

UNIT

VOLUME

FOB EN U$

MONTHLY MID PRICE

MONTHLY PRICE VAR.

June

Kgr.Netos

4.109.707,8

9.347.400,00

2,27

-1,95%

May

Kgr.Netos

4.932.304,82

11.441.587,89

2,32

-0,79%

April

Kgr.Netos

3.653.296,82

8.542.498,97

2,34

1,84%

March

Kgr.Netos

2.886.653,98

6.627.646,94

2,30

0,54%

February

Kgr.Netos

3.676.301,07

8.394.966,9

2,28

-2,54%

January

Kgr.Netos

6.764.194,26

15.849.497,35

2,34

SOURCE: ODEPA

Main exporters

Main producers TONS 250.000

TON 90000 200.000

80000 70000

150.000

60000 50000

100.000

40000 30000

50.000

20000 10000

SOURCE : UN COMTRADE

018

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2001 2002 2003 2004 2005

AÑOS

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

2016

2015

2014

2013

2012

2011

2010

2009

0

AÑO


Sector numbers

Destinations Ranking

Number of destination countries for Chilean exports 72 59

59

61

74

77

77

75 69

66

2017

80

73

FOB en US$

Volume

1

Country USA - EE.UU.

20.304.244

11.358.226

3

México

20.783.555

9.478.250

2

Polonia

16.663.551

7.350.520

5

Reino Unido

17.025.670

6.723.700

4

Rusia

13.613.018

6.026.718

8

Italia

14.382..277

5.003.857

7

Alemania

13.468.867

4.947.880

6

Brasil

5.208.632

3.840.623

9

España

11.943.974

3.697.765

10

Holanda

5.622.179

2.070.131

2015 2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

In eleven years Chile came from 59 to 80 destination countries in 2017. N°

Evolution of the volume imported by the world’s major prune importers (TON)

Description

FOB en US$

Volume

1

Mexico

25.677.111,66

9.197.919,00

3

USA. - EEUU

24.454.420,98

8.938.829,44

2

Polonia

14.839.679,91

4.926.390,00

5

Reino Unido

15.254.920,82

4.562.494,00

4

Alemania

15.669.392,22

4.393.460,00

8

Rusia

13.249.530,66

4.380.396,00

7

España

13.249.239,18

3.700.910,00

6

Italia

13.314.238,95

3.687.430,00

9

Australia

4.900.197,83

1.419.265,00

10

Venezuela

5.114.046,04

1.320.000,00

2012 40000

N° 35000

30000 EEUU Federación Rusa

25000

Alemania Brasil

20000

Mexico

13.091.701,98

8.204.610,00

2

Polonia

10.871.875,31

5.933.515,00

5

Alemania

11.301.756,59

5.445.067,50

6.509.120,58

4.791.741,35

Italia

8.011.353,68

3.896.180,00

México

7

Reino Unido

5.861.188,35

3.097.015,00

6

España

5.144.896,11

2.951.325,00

9

Argentina

1.684.632,20

1.831.020,00

10

Lituania

3.035.953,61

1.686.140,00

2016

2015

2014

2013

2012

2011

2010

2009

3

Brasil

Polonia

0

17.363.203,00

8

España 5000

Volume

33.283.418,68

4

Japón

10000

FOB en US$

Rusia

Reino Unido

Italia 15000

Description

1

019


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