So far, "We see the year with far fewer threatening clouds than at the end of last year," Corbo said following a meeting with UK and Chilean businessmen.

Further down the road, 2006 "most likely will be another good year", he added.

The bank currently expects Chile's gross domestic product to grow between 5.3%-6.3% in 2004.

"There are still many factors to consider" ahead of a revision, Corbo said.

Inflation remains on track to reach the bank's 2%-4% target range, and the bank's declared policy of "normalizing" interest rates at a measured pace remains intact - though the bank will hike faster if it needs to or slow its pace in the event of an unexpected drop in prices, he added.

At 2.75% now, the interest rate is "well below the neutral (rate), which is the interest rate at which monetary policy neither adds nor reduces traction to demand," he also said.

Still, the risks of the economy overheating have diminished somewhat, while Chile's terms of trade have stayed stronger than expected, he added.

Copper prices have remained more robust than expected at around 16-year highs of some $1.50/lb. This has more than offset the level of crude oil prices, which has also remained more resilient than expected, Corbo said.

Chile is the world's largest copper producer, mining roughly a third of global output.

While the central bank's latest estimate has copper at $1.20/lb on average for the year, state copper giant Corporacion Nacional del Cobre de Chile expects the price to average between $1.20-$1.30/lb.

Consumption has remained strong despite the increase of prices at the pump, while competition has kept price increases in check.

As a result, energy-related issues have remained manageable, and business trust continues strong as measured in confidence indexes and in investment levels approaching those of the mid-1990s boom years, Corbo said.

The investment levels now look more sustainable than in the 1990s as the country's current account balance is stable, compared with the gaping deficit a decade ago, he added.

Central Bank Web site: http://www.bcentral.cl

Seafood Chile has started cooked, pasteurised mussel and clam production for export to Europe and the USA The products are packaged in clear plastic pots with a hermetic, tamper-proof seal and a three-month shelf-life at 0 deg C. The pots are designed to carry private labels for whichever client wishes to purchase them.

They use Chilean mussels (Mytilus Chilensis) and clams from southern Chile fjords waters and are processed at Seafood Chile’s plant in Puerto Montt. The plant is HACCP approved and EU registered.

Seafood Chile was set up four years ago to distribute seafood to Chilean hospitals and clinics, but has since invested in pasteurisation technology for the export market.

Terramater S.A. has been producing olive oil for 50 years, continually innovating. In the agricultural area they have incorporated new plantation and tree handling techniques during the year: pruning and irrigation. They have also developed innovative harvesting techniques, incorporating in Chile the Italian "Colibri" system, where movable trowels are used to remove the olives from the branches and reaching difficult corners, reducing damage to the fruit.

For a few years now they have been processing the different olive varieties separately: from harvest to the extraction process, thus obtaining extra virgin olive oil that allows them to make mixtures of greater quality and package differentiated products. In addition, they have introduced the latest technology by acquiring an Italian Pieralisi extraction machine in 1998.

"The great secret is how to extract all the olive properties without making mistakes. If errors are made, the oil fails to be extra virgin", says José Mingo, manager for the TerraMater Olive Oil Project.

Terramater uses a Pieralisi double phase extraction system from Ancona, Italy, which is used in the best oil factories around the world.

TerraMater owns the olive oil brand named Cánepa, the oldest one in the Chilean market. "It is a young oil, of average fruitiness and great personality: a classic one ", says Mingo. Another outstanding brand is Petralia, an extra virgin olive oil exclusively obtained from the "racimo" variety (unique in Chile), cold pressed, fruity, intense and of greater complexity. Petralia has obtained several international recognitions, the award obtained in Verona Italy as the best foreign olive oil in 2002 being the most important one, positioning as a world class extra virgin olive oil.

Mingo believes that the Chilean extra virgin olive oil must follow the track of superior quality, "Chile must start its exporting program oriented to the world-wide segment of high quality olive oils (high prices). This is for two reasons: all the olive oil produced in Chile is of high quality and we still do not have volumes to enter massive markets".

As far as new projects, TerraMater is working on an organic olive oil project, in which a percentage of hectares with organic agricultural handling will be certified to produce a unique product.

Volvo? What Volvo? It was one of those throwaway sentences, but when I likened the Chilean wine industry to an ultra-safe make of Swedish car four years ago, it seemed to strike a chord with a lot of people. I’d just been on a trip to the long, thin country and, while the wines were well made, there was very little that set my pulse racing.

What a difference four years makes. The Wines of Chile Meet the Retailer tasting at Vinopolis showed just how far Chile has come. The first thing that impressed me was that Michael Cox, director of Wines of Chile, had issued an edict that no one was to show any wines retailing under £4.99. Cox is rightly trying to distance Chile from the bargain basement. There are some decent £2.99 wines around (especially at Asda and Morrison’s) but they don’t do much for the image of Chile.

The second thing that impressed me was the diversity of the wine styles on offer. We all know that Chile can produce Cabernet Sauvignon, Merlot, Chardonnay and Sauvignon Blanc (hence my Volvo comment), but it’s starting to work successfully with other single varieties, such as Riesling, Viognier, Carmenere, Gewurztraminer, Syrah and Pinot Noir, as well as producing some very good blended reds.

Chile is now doing what Australia did 10 years ago. That’s to say innovating and delivering outstanding value for money at a range of price points. It is also better served by its large wineries than Australia in these days. The likes of Concha y Toro, Santa Rita and Errázuriz are doing for Chile what Penfolds used to do for Australia leading from the front.

Which were my favourite wines and wineries? I was impressed by Viña Leyda, Concha y Toro, Tabalí, Errázuriz, Santa Rita, Echeverría, Alta Tierra, Cono Sur, Montes and Casa Lapostolle, Veramonte, Novas and Coyam. Three of my four star grape varieties surprised me. I expect Chile to make good Chardonnay, but I was bowled over by the quality of the Syrahs, the Sauvignon Blancs and the Pinot Noirs.

Importantly for Chile, retailers seem to be prepared to stock a few interesting wines. The contrast with Argentina is striking. There’s a buzz about Chile at the moment, one retailer told me. The generic office is doing a good job, the wines are better, the packaging is better and the country is getting more exposure in the press. It’s not yet the Ferrari of the wine business, but Chile has sent the Volvo to the scrap yard.

Tim Atkin in OLN April 1 2005.