Peru agriculture exports to the European Union and United Kingdom increased more than 24% in the first four months of 2021 compared to the previous year, in an encouraging sign of ongoing post-pandemic economic recovery that highlights a significant area of opportunity for investors.
According to Comex Peru, a body that monitors international trade, between January and April of this year, Peru agriculture exports to the EU and UK totalled $769 million — having reached $618 million during the same period in 2020 (all figures in USD).
That 24.4% increase was driven by strong growth in imports among the region’s four principal destinations for Peru agriculture products, namely the Netherlands (25.9% increase), Spain (25%), the UK (21%), and Germany (28.5%). Belgium was the only country in the top five to register a decrease in the value of Peru agriculture imports during the period (-11.2%).
SEE ALSO: How to Register a Company in Peru
Among the most important Peruvian agricultural products to be entering the EU and UK during the period were avocados, with a value of approximately $110 million and representing almost half of Peru’s total avocado exports.
Other key products included mangoes, with the value of exports increasing more than 53% to reach a value of $12 million; asparagus, increasing almost 74% to reach a value of $8 million; and mandarins, increasing almost 47% to reach $7 million. Other fruits and vegetables saw an increase of 53% to reach a value of $15 million.
The increase in Peru agriculture exports forms part of a pattern of generally increasing exports, with total Peruvian exports to the EU and UK for the four-month period reaching $1.797 billion — representing a 20% increase on the same period last year.
However, the new figures are notable in that they highlight the growing strength of non-traditional exports such as agricultural goods, which represented more than 59% of total exports — despite the fact that commodity prices for traditional exports such as copper, zinc, and petroleum oil have risen significantly during the period being monitored.
Peru agriculture offers opportunities to investors
Agriculture in Peru offers a range of lucrative opportunities to investors, thanks to the availability of arable land and the continued underdevelopment of many aspects of the sector. Those opportunities exist in the production of certain crops, as well as in providing support and innovation to the country’s growing agroexport economy.
Below some of those opportunities are considered:
Fresh produce: Peru is already a significant source of the likes of asparagus, avocados, blueberries, coffee, grapes, mangoes, and mandarins, yet its potential for producing these crops is yet to be fully realised.
On top of which, it provides ideal conditions for developing Peru agriculture crops that have seen growing interest over recent years, such as quinoa, maca, yacon, and chestnuts, among others.
Many of those crops — such as avocados, blueberries, and quinoa — are so-called “superfoods,” which saw a more than 200% increase in demand between 2011 and 2015, and which have continued to grow in popularity since then, offering significant opportunities to investors.
Alpaca wool: Alpaca wool is a commodity in growing demand, with the market expected to increase at a rate of 5% per year in the decade up to 2030. Peru is by far the world’s largest source of alpaca wool, producing approximately 80% of global supply.
While demand for this warm, soft, and comfortable material continues to grow, the market is still relatively underdeveloped. Current players in the alpaca fibre market are focusing on developing increasingly high-quality wool, based on innovations in the feed and conditions for the animals.
This provides significant opportunities for investors able to engage in the market and drive on such innovation.
Organic cacao: Peruvian cacao is considered some of the best in the world, with the highest-quality product produced in one of seven official Natural Protected Areas (ANPs). Peru is the world’s second-largest producer of organic cacao.
Prior to the pandemic, the demand for cacao had been growing over a number of years, and while the global health emergency has had a negative impact on that demand, it can be expected to pick up again as the world returns to normalcy and demand for chocolate and other luxury products picks up.
That offers significant opportunities to investors in Peru agriculture, and with Europe being the largest chocolate-producing region in the world, a significant portion of that increased business will be heading towards the EU and UK.
Agricultural technology: With the Peru agriculture sector growing and becoming increasingly important to the country’s export economy, opportunities abound in developing innovative solutions that promote efficiency and productivity, or that solve common problems faced by the sector.
Developments in agricultural technology (agritech) take a wide range of forms, be that through technology intended to address issues such as water consumption, or the development of new seeds and products to increase yields. Alternatively, it can be focused on improving monitoring of crops and animals, for example through the use of drones.
As such, agritech represents a broad scope of possibilities for investment, especially among investors involved in similar developments elsewhere.
Biz Latin Hub can help you doing business in Peru
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