Good prospects for Peruvian agricultural exports

Published on 21 August 2020

In the midst of the slowdown in the economy due to the COVID-19 pandemic, the Peruvian agro-export sector maintains its momentum and could close the year with growth.

The geography of Peru has allowed the expansion of the agricultural industry since the last decade of the 20th century, when the country's economy was reopened. Since then, with asparagus as the first product developed on a large scale, the growth of its agricultural and agro-industrial exports has been constant and accelerated.

First came asparagus, with developments in the central area of the coast that transformed deserts or cornfields into green carpets of hundreds of hectares managed by large companies. This change allowed the farmer to go from being a peasant to a middle-class employee with social benefits, and the country's portfolio to diversify. This model was replicated for avocado, grape, pepper and mandarin, among other products, with which growth has been continuous.

At the same time, the development of the cooperative model that supplies international brokers or brokers whose clients are the main fruit brands in the world allowed the central jungle coast (rainforest) in the north of the country to become a production center for mango, cocoa and bananas. International cooperation played an important role, allowing the production and business practices of small farmers to be more sophisticated to have access to organic and fair trade certifications, among others, to which the traditional cultivation of coffee was added.

30 years later, the dynamics continue and the country has established itself as the main exporter of blueberries and quinoa in the world. Both products were not grown for the foreign market only ten years ago, and today they are a clear example of how the fertility of the country's lands continues to be exploited, the geographical latitude that allows counter-seasonal production. The following table shows the relationship of the main products exported over the last year, to which new elements such as berries or grains considered superfoods could soon be added, for which the market continues to develop, taking advantage of the demand for inputs for a healthy diet.

Regarding the temporal distribution of the campaigns, it should be noted that the country has a greater concentration of production in the second half of the year, mainly due to winter harvests and summer products, such as grapes and mangoes. This can be seen in the following graphs, which show the export peaks for the five main products of the Peruvian portfolio.

The outlook for the agricultural export industry in Peru is auspicious and a good performance has been observed throughout the year. Despite the circumstances, the figures could be even better in the second half. It should be noted that some products are constantly being produced throughout the year, although in several cases there are peaks in certain parts of the year that can be recognized as campaigns.

In the case of this group of products, an analysis can be made of how Peruvian agricultural exports have fared in the first half of the year. And as the table below shows, performance has been generally positive despite the tough economic environment. It should be taken into account that the reduction in the value of coffee shipments is due to a drop in production as a result of the low prices until 2019 and the low productivity that arises from the lack of capital to improve crops and face pests, but more developed crops can take advantage of good prices and qualities of the country brand or certifications.

In general, agriculture is an emblematic sector of Peruvian development. No other has had such a high and continuous expansion over the last three decades, nor has it had the potential to lift so many producers out of poverty: approximately 25% of the country's employment depends on this sector, only comparable to services, with a similar participation. For this reason, the fact that exports in this area have a positive outlook is good news from an economic and social point of view, and it will be essential for the Peruvian government to continue supporting the development of producers and marketers.

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