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.

After the successful V Summit of Latin America, Caribbean and European Union (LAC-EU) we are left with a lot of conclusions to ponder with. First of all that Peru, when it is determined to be is capable of gigantic achievements. The displayed organization of the Summit was impeccable and it allowed our country to show off to the world as an attractive and stable destination for tourism and future investment.

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.

Usually we dedicate this column to present possible export opportunities to the U.S., especially now that we are facing the imminent opening of the commercial agreement with that country. Nevertheless, we haven’t really talked about the business possibilities implied when importing products from that country. And even though exports are a viable business and the potential of developing our sales to the world are endless, importing represents a huge opportunity for our businessmen.

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.