Peru is one of the fastest growing economies in Latin America. According to the World Bank, between 2002 and 2013 Peru’s average gross domestic product (GDP) growth rate was 6.1%, within a context of low inflation (2.6%, on average). Although GDP growth slowed to 2.4% in 2014, the rate remained above the regional average of 0.8%.
For 2015, the Central Reserve Bank of Peru has calculated an estimated 3% growth in GDP, while expectations for 2016 are very much dependent of the extent of the impact of the El Niño weather phenomenon.
Peru is now part of the group of upper-middle income economies, together with countries like Costa Rica, South Africa, Brazil, Colombia, Mexico and Turkey, among other nations, that are already important business partners for the UK.
During 2014 the services sector was by far the main contributor to Peru’s GDP, at 48.7%; within which telecommunications and financial services are the main activities. Manufacturing is the second-most-important activity (14.1%), which covers the textile industry as well as steel, cement and other mining processing related industries. Other important sectors are mining extraction and concentration (11.7%), trade (11.2%), construction (6.8%) and agriculture (5.3%).
Peru’s total exports are equivalent to 22.4% of GDP, up from 16% in the year 2000, reflecting the efforts made to increase our integration into the world’s economy. Peru shipped US$38.6 billion (£25bn) worth of goods around the globe in 2014, up by 8.4% compared with 2010. Approximately half of those exports are generated by the mining sector (worth US$19.5bn or £12.6bn), which demonstrates the traditional importance of mining activities to Peru’s economy.
Fruit and veg is fastest-growing category in Peru’s agriculture sector
Nevertheless, Peruvian agricultural exports are growing very rapidly and are already considered the second-largest trade sector. In 2014, agriculture accounted for more than US$8.6bn (£5.6bn) or 22% of Peru’s total exports. This trend is expected to continue in the years to come; opening up a whole new set of opportunities for buyers worldwide, including the UK.
Among Peru’s agricultural products, the most important category is coffee and cacao, which combined represent approximately 48% of exports in this sector. This is followed by fresh fruits and vegetables, which in 2014 reached US$1.8bn (£1.2bn), accounting for 22% of exports. Fresh fruits and vegetables is the fastest growing category in Peru’s agriculture sector, with a total growth of 126% during the period between 2010 and 2014.
Interestingly, today the UK represents the third-most-important trading partner for Peru in this category, receiving 8.9% of the fresh produce export total, after only the US (34.4%) and the Netherlands (20%). Fresh produce exports to the UK are also growing rapidly, not only in the value and volume of sendings, but also in the variety of Peruvian fresh produce now available in the market. But there are still a lot of exciting possibilities to discover!
The present position of Peru as a rising star within the world’s agricultural trade is the result of a combination of factors. The country has been blessed by nature – its mega diversity is the product of different geographical zones (the Humboldt current, a desert coastline, the Andes mountains and the Amazon rainforest) which offer Peru a variety of microclimates (72% of all those found in the world) and ecosystems (88%).
This fantastic biodiversity has certainly been a catalyst for agricultural development. In fact, Peru is recognised as one of the origins of agriculture and an important centre for the domestication of the human species given that agricultural practices began in this part of the world more than 10,000 years ago.
Numerous exciting possibilities for buyers still to discover
It’s no surprise therefore that Peruvian growers with their traditional practices can offer the world more than 184 domesticated plants – the most famous being potatoes and peanuts, as well as different varieties of tomatoes, maize, chillies and peppers.
In addition, Peru produces Andean superfoods like maca (Peruvian ginseng), yacón, quinoa and amaranth, plus exotic fruits like passion fruit, granadilla, golden berries (physalis), cherimoya, lúcuma and camu-camu, among other plants still scarcely known in other parts of the world.
In a highly competitive fresh produce market like the UK, differentiation (in terms of quality, availability and sustainability), as well as a unique offer of a selection of unknown varieties and exotic fruits and vegetables can be key to driving awareness, growth and profitability at a company.
It’s no surprise therefore that a growing number of British companies are getting in touch with us at the Peru Trade and Investment Office in the UK to coordinate a bespoke agenda for their increasing number of trips to our country. After all, Peru is still a paradise of opportunities for buyers to discover!
Public-private sector is driving global trade prospects
This huge potential has been recognised by both Peru’s private and public sectors who have paved the way for important improvements during the past decade under a tacit public-private partnership.
The public sector, with its driving role, has been keen to open new markets for Peru via an aggressive foreign trade policy; leading to the signing of free trade agreements that have granted preferential access for Peruvian products in the world’s largest markets. Today, 96% of Peruvian exports are shipped to these major destinations, reaching more than 4 billion consumers around the globe.
The Peruvian government has been also very active in terms of investing in the development of infrastructure; from airports, ports and roads to the generation of energy and transmission; all of which have allowed Peru to raise its competitiveness.
Furthermore, new irrigation infrastructure is expected to expand Peru’s agricultural frontier to 260,000 hectares in the years to come; tripling the amount of land devoted to export-oriented agriculture, which currently stands at 130,000ha. This will definitely open up opportunities for foreign investors who are specialised in this sector.
The private sector, meanwhile, has taken on board the lion’s share of the efforts to realise Peru’s agricultural potential. Steady investment has focused on expanding production by modernising postharvest and processing facilities and implementing trial plots with new varieties, as well as exploring different agronomic practices, analysing yields and quality and introducing technological innovations.
Exporter guilds (Agap, Apem, Ipeh, ProCitrus, ProHass, ProVid, plus the newer ProArándanos and ProGranadas) have also been established to better organise Peru’s fresh produce supply and to represent the exporters within those guilds both nationally and internationally. This, in turn, is helping them to standardise their practices and quality controls to meet the requirements of key international markets, like the UK.
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