Living in Peru : your everyday companion

In 2008, Peru exported US$1,912,690 million in the agro-industrial sector, an amount 23.3% higher than in 2007, in which this figure came to US$1,550,695 million. It should be noted that the United States is the main destination of our agro-industrial exports, accounting for 30.7% of the total (US$587,021 million); far below as a destination is Spain, with 12.2% of the total (US$233,608 million). In third place are the Netherlands with 10.2% (US$195,293 million). These countries account for 53.1% of the total, which is to say that three countries account for over half of our agro-industrial exports (see figure).

An important detail, which gives us a good start with this FTA, is that 78% of total exports in the agro-industrial sector are non-traditional exports, and traditional agricultural products represent only 22%. This latter percentage of traditional agriculture has been falling gradually over the years. This shows that, although we still lack a highly diversified group of products to offer, we are using good strategies for entering the U.S. market with specialized products and targeting niche markets.

To go into detail and analyze our products exported to the U.S. market, we see that they are mainly concentrated in asparagus, artichokes, onions, other vegetables, paprika, mangoes and grapes. These products account for 65.8% of the total sent to the United States (see table). Also, the top 20 products exported to that country account for 82.4% of the total. This demonstrates the enormous road ahead, and all that can be used to expand our exports. We have many high quality products that are not yet known in that market, as well as others on the waiting list to overcome sanitation barriers. Having the FTA signed is definitely a key factor in this process, driving us toward being a potential trading partner of the United States, and thus to being much more competitive than competing countries that are without it.






Source: Adex DataTrade
Elaboration: AmCham Peru



Opportunities in our neighbor to the north

To explore opportunities for Peru agro-industry in the United States, we should divide the analysis in two: first, to look at new products that still cannot enter, but that during the course of this year, will have free access; and on the other hand, to look at products that are currently being exported and are having an exponential growth.

The chief of SENASA, Oscar Domínguez, explained that this year, the Tahiti lemon was one of the products that most benefitted upon opening export opportunities for U.S. and Chile. He recalled that in the case of the U.S. market, phytosanitary barriers were lifted in February, permitting this product to enter from Peru at a temperature of eight degrees centigrade, and not zero, as required for other countries. For example, while in 2006 we did not export lemon juice; in 2007, the exports were US$136,000 and in 2008, they reached US$1.426 million.

While the United States government will postpone the entry of peruvian avocado to its market until mid-2009 because it lacks several formal procedures that are yet to be followed, Peru estimates it will export 19,000 metric tons (MT) of fresh Hass avocados per year to the U.S. market when it completes the process of lifting phytosanitary barriers. It is worth recalling that on January 7, the United States Department of Agriculture (USDA) put the proposed law for the entry of peruvian Hass avocado to the U.S. market to public consultation, which will be open until March 9.

According to published estimates, imports from Peru will represent approximately 5% of the consumption of fresh avocados in the United States and 11% of the production. The United States is the world's largest importer of fresh Hass avocados, buying between 60 and 75 percent of annual global exports, while Japan and Canada are a somewhat distant second and third place, together importing between 18 and 20 percent of the total. Peru has emerged as a major exporter of Hass avocados in the world market in recent years, representing approximately 18 percent of the world’s exports.

Also on the list waiting to enter the United States are cherimoyas, tunas, papaya, figs, among other peruvian products.

Furthermore, products with the highest growth compared to last year are cocoa butter, mango, canary beans, piquillo peppers, quinoa, black-eyed peas and lemon juice.

The Exporters Association reported that Peruvian dry bean exports rebounded this year, projecting to total US$15.5 million dollars, and that black-eyed peas will be a major dry bean exports and with increased demand, with lentils, baby lima beans, canary beans, black beans, dry pigeon peas, vall whole beans and white panamito beans. Peru mostly exports dry beans in bulk, followed by canned, fresh and frozen. The United States is the main destination of these exports.

The FTA with the United States will benefit peruvian producers and exporters because they will become more competitive and will permit them, in this area, to continue to enter the U.S. market with the exemptions already enjoyed with the ATPDEA. Despite the international financial crisis, during the period of January to November 2008, the United States took first place from Portugal, which in the same period of 2007 was the main destination of agro-industrial exports.

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