Agritech brief in peru june 2011

Exporter Guide |
agritech in Peru |
Market ProfileJUNE 2011 |





This document is one of a series of free information tools for exporters produced by New Zealand Trade and Enterprise. New Zealand Trade and Enterprise provides a wide range of standard services and sophisticated solutions that assist businesses through every stage of the export process. For information oradvice, phone New Zealand Trade and Enterprise on 0800 555 888, visit www.nzte.govt.nz, or contact your New Zealand Trade and Enterprise client manager.
Contents
1 Market structure 3
1.1 Market Size 3
1.2 Growth Rate 3
1.3 Peru agriculture sectors 3
1.3.1 Dairy 3
1.3.2 Beef 3
1.3.3 Sheep 3
1.4 Regulatory Overview 3
1.4.1 Duties/taxes 3
1.4.2 Investment and Company Establishment 3
1.4.3Regulatory requirements 3
1.5 Sustainability issues 3
2 Market entry and development 4
2.1 Market Entry Strategies 4
2.2 Points of Differentiation 4
2.3 Distribution channels 4
3 MARKET RESOURCES AND CONTACTS 5


1 Market structure
The Peruvian economy has outperformed others in South America and many other global economies in recent years. Peru’s strong economic growth has been aidedby trade liberalization policies and economic reform in the 1990s, and strong measures to attract trade and foreign investment since 2001.
In addition, Peru has taken advantage of its bio diversity and excellent climate conditions, and increased its agricultural exports to US$3.2BB in 2010 from US$2.6BB in 2008 (+10% per year), leaded by modern and well managed companies that have createdefficient clusters. However, at the same time, in Peru still there are many “traditional” production units, poorly run by uneducated and non associated farmers or peasant communities that operate extensive lands and resources without clear efficiency and profit objectives1.
1.1 Market Size
Advantageous geographic and climatic conditions and improvements in market access (through free-tradeagreements) have produced a modern agricultural and agro-industrial sector in Peru. According to the Central Bank of Peru, the agricultural sector accounted for 7.6% of GDP in 2010. However, a wider definition of the sector including fishery, refining sugar, non alcoholic beverages and mineral waters, processed fish, meal and canned, would raise this figure to 10% of GDP2
Peru is a substantialnet exporter of food / agricultural products (a surplus of US$1.4BB was obtained in 2010). The Central Bank of Peru reported total agricultural exports of US$3.2 billion in 2010, with coffee and asparagus representing 46% of the total. Other significant exports include paprika, artichoke, mango, grapes, avocado2.
The total value of exports to Peru from New Zealand was over NZ$40 million in 2009.This included dairy eggs and honey (NZ$26 million), baking preparations (NZ$9 million), optical instruments (NZ$1 million), toys and sporting equipment (NZ$1MM), miscellaneous grains, seeds fruits, (NZ$1MM).3

1.2 Growth Rate
Thanks to the global recovery of its trade partners and due to an stronger domestic demand, in 2010 the Peruvian economy grew 9% recovering from a growth of only0.9% in 2009 caused by the global crisis. Cumulative growth was 6% per year during the period 2008-10. For 2011-12 projections, while the annual rate suggests growth remains robust, the sequential growth rate has moderated to 6% - 8%. Looking ahead, recent election results jitters may also be a headwind.

The breakdown of the Agricultural sector growth, published by Central Bank of Peru is asfollows2:

| | | | AnnualGrowth % |
GDP Annual Growth - % | 2010 | 2009 | 2008 | |
Total GDP | 8.8 | 0.9 | 9.8 | 6.4% |
Agricultural sector | 4.3 | 2.3 | 7.2 | 4.6% |
Agriculture | 4.2 | 0.9 | 7.4 | 4.1% |
Oriented to domestic market | 1.5 | 6.2 | 4.3 | 4.0% |
Oriented to international markets & agroindustrial | 11.1 | -10.9 | 14.8 | 4.4% |
Livestock | 4.6 | 4.4 | 6.0 | 5.0%...