Colombia agricultural exports to the United States could grow 250% over the next decade, hitting $1.4 billion (all figures in USD), with US demand for agricultural goods set to spike.
That is according to a new report from the Colombian-American Chamber of Commerce (AmCham Colombia), which states that Colombia’s fertile, abundant, and massively underutilized tracts of arable land could be employed to help meet rising demand globally.
With UN estimates suggesting that the global population could grow by 25% to hit 10 billion people by 2050, that will mean that within 30 years worldwide demand for agricultural goods will be double what they were a decade ago.
According to the AmCham Colombia report, the South American country has more than 25 million hectares of land that could be used for agriculture, of which little more than 5 million hectares are currently productive – meaning the country has significant scope to meet the growing need.
That will include an uptick in demand from the United States over the coming years, which could see Colombia agricultural exports to the country increase five-fold within a decade.
“It is expected that in the next 10 years the percentage of land devoted to cultivation will increase, with Latin America having the greatest potential at the global level, which will help the region to position itself as a world supplier of agricultural goods,” said María Claudia Lacouture, executive director of AmCham Colombia, in email correspondence with Biz Latin Hub.
Table of Contents
Orinoco region could be key to expanding Colombia agricultural exports
Among the regions of Colombia with the highest potential for agricultural development are the expansive Orinoco region – one of five main regions of the country, which is largely made up of the four departments of Arauca, Casanare, Meta, and Vichada.
According to the AmCham Colombia report, the Orinoco region has more than 2.8 million hectares of fertile land that is ideal for agricultural development and forestry projects, with Lacouture highlighting that the country is well positioned for investment in its agricultural sector.
“As competitive advantages, the country has a low cost per hectare, which is attractive for large-scale projects, as well as high availability of water and solar radiation,” Lacouture wrote.
However, as the report highlights, taking advantage of this opportunity will revolve around Colombia’s ability to generate the investment needed – something that Lacouture echoed.
“Investment is required to implement sustainable projects with technology to make those crops productive in order to meet the consumption needs of the US market, as well as the phytosanitary requirements needed for commercialization in that market”, Lacouture wrote.
In that regard, the Colombia United States Trade Promotion Agreement, a free trade agreement between the two countries that has been in force since 2012, offers significant potential as a driver of US investment into the Colombian agribusiness sector.
As the US Department of State highlights, the United States is Colombia’s largest trade partner, accounting for over one-third of Colombia’s total trade, while the South American country is among the top ten suppliers of crude oil to the United States.
The well-established commercial relationship between the United States and Colombia, reinforced by their bilateral FTA, means that Colombia represents an attractive destination for US investors, as well as being potentially key to meeting the coming spike in US demand for agricultural goods.
Biz Latin Hub can assist you doing business in Colombia
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in 17 major cities in the region, including Colombia’s capital Bogota and popular tourist and investment destination Cartagena.
Our portfolio includes accounting & taxation, register formation, due diligence, hiring & PEO, and corporate legal services. Our unrivaled regional presence means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
Contact us today to find out more about how we can assist you.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.