Living in Peru : your everyday companion

In various occasions we have mentioned in this column the huge existing potential in exporting Peruvian fruits and vegetables to the U.S.A., in effect, more than once we have expressed the successful cases of products such as asparagus and artichokes, mangoes and grapes which are now vastly known and constitute a symbol of our revealed competitive advantage in the agro industrial sector.

After the terrible 9/11 terrorist attack in the U.S. it was evident that an increase in security was imperative in not only in all the frontiers of that country but especially in their ports. In this context, last year the United States Congress approved a normative that forces customs around the world to guarantee the security of their cargo in the whole extent of the logistic chain. This new situation, confronts Peru as well as the rest of the countries betting for a commercial ongoing traffic with the U.S. through a variety of new challenges.

As mentioned before in numerous times, our country has revealed a competitive edge and an advantage for production and exports of agro industrial products to the world, due to our diversity of soils and microclimates as well as the vast possibilities of producing during off season times, that is to say, during the winter months of the northern hemisphere. The specific group of products that has being emphasized, in the past five years, as the most promising one and has presented a very interesting evolution in the international market are the Peruvian fruits.

Last week our country subscribed various Free Trade Agreements with important commercial partners in the likes of Canada and Singapore, contributing this way, to the expansion of exporting our products and consolidating the necessary tools to stimulate investment and generating quality employment.

Coffee is, and always has been one of our essential traditional export products and due to our incipient influence in global prices our production has always depended on the international market variations. Nowadays, however, global consumption preferences are definitely targeted towards gourmet and health oriented foods therefore, exporting coffee has been translated into organic coffee and this is actually originating great benefits and better development opportunities for Peru.

A couple of weeks ago we shared with you the business opportunities that the Peru – United States Trade Promotion Agreement (PTPA) offers to our country, not only for exporting using the preferential access to the American market, but for importing products that may attract the attention of the increasing demand of our industry.

As said before, the PTPA eliminates the tariffs for the products that Peru and United States exchange, and therefore robust trade between our countries in both ways. In other words, by dismantling the PTPA will allow us to export more but also, import more. The exported goods will come from sector where our country has revealed advantages for production while imported products will depend both on the demand of our market and our commercial partner’s ability to produce with competitive advantages.

Without a doubt our country has a clear competitive edge for clothing exports and it doesn’t surprise anyone, that using the unilateral preferences from the ATPDEA, this sector has heavily increased its sales to the United States stimulating the growth of non traditional Peruvian exports.

It is easy to observe that Peruvian clothing exports increased by 58% between the years of 2004 and 2007, being U.S. and Venezuela the fundamental markets. The main products exported were cotton t-shirts, blouses and shirts, even though there is an interesting dynamic going on with baby clothing as well.

According to the National Association of Specialty Food Trade, NASFT, gourmet canned food represents a 22 million dollar market annually in the U.S. in which around 120,000 products gravitate. For this reason, our exporters should take a close look at the market characteristics to start taking advantage of this opportunity.

First of all one should ask what is a gourmet product. Well, according to the NASFT, specialty foods differentiate themselves from the rest because they have a particular level, style and/or higher quality.

There is no doubt that in recent years, our sales overseas have gone through a considerable expansion, and non-traditional products are going through a huge boom, being totally stimulated by the evolution of agro industrial exports.

Within this group, asparagus for instance have been extremely successful and its international quality placed Peru as the leader amongst the global producers of asparagus in the world. Nevertheless, we should not take it for granted and must develop other valuable crops that present such high potentials as those in the international markets.

As we have been mentioning the AFP Peru – U.S.A., offers our industry and our businessmen countless opportunities to generate new business and, in particular, to offer and sell our products in one of the world’s biggest markets. But in order for this as well as other negotiated agreements boost our exports, it is necessary to make the process easier and convince our entrepreneurs that exporting is simple.