May 30, 2016 / 2:27 PM / in 2 years

UPDATE 1-Chile factory output drops after algal bloom kills fish

(Recasts, adds details from statistics agency, context)

SANTIAGO, May 30 (Reuters) - Chilean manufacturing production tumbled in April after the local salmon industry, the world’s second biggest, was pummeled by a deadly algal bloom, government data showed on Monday.

Factory output fell 1.2 percent in April from a year earlier and dropped 7.4 percent in April from March, the government’s INE statistics agency said.

Chile, the world’s No. 1 copper producer, is also a major exporter of salmon, wood pulp, wine and fresh fruit.

The rapid increase in the population of algae in its water system affected salmon farms in southern Chile, killing millions of fish and causing an economic impact from lost production estimated at up to $800 million.

Algal blooms are common off Chile’s coasts, but warmer waters likely caused by the El Nino phenomenon spurred a greater formation this year.

El Nino also brought unusually heavy rains to central Chile, hitting copper output, the INE said.

The production of paper products also declined in April as wood pulp plants had planned maintenance work done, INE said.

On a positive note, retail sales rose 7.9 percent in April versus a year ago.

Chile’s economy has struggled as cooling demand in top trade partner and copper consumer China has led to a rout in the metals market and crimped investment. (Reporting by Anthony Esposito; Editing by Jeffrey Benkoe)

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