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Lima, Peru – A period of shifting dynamics is underway in Peru’s agricultural export โmarket, with once-lucrative โcrops facing declining profit margins.Industry leaders are now focusing on โขdiversification and industrialization to maintain economic viability, signaling a potential โคtransformationโ in the nation’s agricultural landscape.
The Maturity of Key Exports
The โคAssociation of Agrarian Producing Guilds of Peru (AGAP) reports a trend toward reducedโค profitability in โคpreviously high-demand crops. Blueberries, โfor exmaple, have seen prices fall from approximately $15 per kilogram โคduringโฃ the peak of their โexport boomโ to aroundโฃ $5 currently, while production and logistical costs continue โฃto โฃrise. This compression โขof margins is indicativeโค of aโข broader “maturity” phase โฃfor several key Peruvian agricultural products.
รngel Manero, head of the ministry of Agrarian Growth and โirrigation (Midagri), recently stated that many fruits are โreaching โthis maturity point. he indicated a strategic shift towardsโ industrial crops, noting, “When we sayโ that we are going to leave a million new โhectares signed or โsignedโ contracts, we are no longer thinking of necessarily fruits and vegetables, but also in aโค large industrial crop.”
But does this mean producers should abandon established fruit exports like cranberries โคand avocados? export unionsโข suggest a more nuanced approach.
Diversification: A Strategic Response
While acknowledging the maturityโ of certain crops, industry representatives โemphasize that this is not necessarily a negative development.โค Elkin Vanegas, president of theโ Fruit and Vegetable Committee of the Exporters Association (Adex), described the situation as “temporary,” โขhighlighting the potentialโฃ forโ external factors โค- โขsuch as tariffs โonโ competitors or natural disasters impacting other producing regions – toโ create new opportunities for Peruvian exports. โ
Pro Tip:โ Staying agile โand monitoring global market conditions is crucial โfor Peruvian agricultural exporters.
The โฃkey, according to vanegas, lies โin diversification. This includes developing โคvalue-addedโค products likeโฃ juices, โคjams, and pulps from existing crops,โค supplementingโ fresh fruit sales.โ Passion fruit (maracuyรก) serves as a prosperous example, with 40%โฃ of production now โขdedicated to industrial processing, compared โto โ60% for fresh marketโ sales.
Gabriel Amaro, presidentโข ofโข AGAP, echoed this sentiment, noting that fruit processing in Peru remains relatively limited. In 2024, fresh fruit andโฃ vegetable exportsโ totaled $6.8 billion, while processed, preserved, and frozen products accounted for only $13 million.
Exploring New Crops and Markets
Beyond diversificationโ within existing product lines, Peruvian producers are exploringโ new crops with high potential. These includeโ cherries, pitahaya (dragon fruit), pecans, beans, kaki (persimmon), โคand โคraspberries. Opening new markets, particularly in asia, is also a priority.
The recent โapproval of a new Agrarian Law by the Peruvian Congress, pending executive approval, is expectedโฃ to incentivizeโ investment in theโ sector. This law includes a reduction in the corporate income tax rate for large agricultural companies.
Didโ you know?โ Peru’s strategic location and climate allow for โthe cultivation โof a diverse range of crops, offering significant export potential.
The Rise ofโข Industrial Crops
Midagri is advocating for โคincreased production โofโฃ industrial crops – those used as raw materialsโ for manufacturing rather โthan direct consumption. Sugarcane โfor ethanol production is a key focus, but otherโ options are โคalso being considered.
Peru already has a strong โpresence in industrial crops likeโค cocoa and coffee. In 2024, coffee exports increased byโ 33% toโ $11 million, while cocoa exports surgedโ byโ over 198% to โข$1.281 billion. โค Other promising industrial cropsโข include ginger (kion) and turmeric, often exported in โคprocessed โforms like flours and โpastes, and a potential revival โof premium cotton production in theโ northโค of โขthe โcountry.
| crop | 2024 Export Value (USD) | Year-over-Year Change |
|---|---|---|
| Cocoa | $1,281 million | +198% |
| Coffee | $11 million | +33% |
| Fresh Fruits & Vegetables | $6.8 billion | N/A |
| Processed Fruits & Vegetables | $13 million | N/A |
Though, expertsโ emphasizeโข thatโฃ any shift towards industrial crops must โbe accompanied โby improvements in competitiveness, โคincluding legal security, tax incentives, and reducedโ internal logistics costs.
Long-Term Trends and Context
Peru’s agricultural sector has experienced significant growth โinโข recent decades, driven byโค increased global demand for โagricultural products and favorable climatic conditions. Though, theโ sectorโฃ faces ongoing challenges, including climateโ change, water scarcity, and infrastructure limitations. The move towards diversification and industrialization represents a strategic response to these โchallenges, aiming to enhance resilience and sustainability.According to the Food โand Agriculture Association โคof the United Nations (FAO), โsustainable agricultural practices โare crucial for โensuringโค food security and environmental protectionโ [FAO Sustainable Agriculture]. Investing in research and development, improvingโ infrastructure, and fostering innovation will be essential for Peru to capitalize on its agricultural potentialโข inโ the long term.
Frequently asked Questions
- What is driving the need for diversification in Peruvian agriculture? Declining profit margins in established export crops like blueberries are prompting producers to explore new opportunities.
- Whatโฃ are some of the promising new cropsโค for Peru? Cherries, pitahaya, pecans,โ and high-quality cotton are โamong โขtheโ crops with significant potential.
- What โrole doesโ theโค new Agrarian Law play? The law aims to incentivize investment in the agricultural sector through taxโค reductions.
- What is theโ importance of industrial crops? Industrial crops offerโ opportunities for value-added โขprocessing and diversification beyond freshโข market sales.
- What challenges remain for Peruvian agriculture? โ Improving competitiveness through infrastructure development,โ legal โsecurity, and reduced logistics costs is โcrucial.
We encourage you to share this article โขwithโค your networkโข andโฃ join the conversation in the comments below. โSubscribe to our newsletter for the latest insightsโ on global agriculturalโฃ trends!
