Mercado de republica dominicana

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Voluntary Report - public distribution
Date: 1/12/2007
GAIN Report Number: DR7002
DR7002
Dominican Republic

Product Brief

The Pet Food Market in the Dominican Republic

2007

Approved by:
Jamie Rothschild, Agricultural Attaché
U.S. Embassy
Prepared by:
Wagner A. Mendez

Report Highlights:
The AgOffice estimates the current market for pet food is around US$4 million with theU.S. market share about 40 percent. Over the last few years, despite the preference for premium brands, the U.S. has lost a significant share to Central America. The restriction on U.S. pet food containing ruminants has also led to lower exports. According to the local trade, if conditions were ideal, the value of the market would double. Even with DR-CAFTA, competition will continue to bestrong as Central American pet food exports will have a zero duty compared to the United States’ at 20%.

Includes PSD Changes: No
Includes Trade Matrix: No
Unscheduled Report
Santo Domingo [DR1]
[DR]

TABLE OF CONTENTS

Page

MARKET OVERVIEW……………………………………………… 3

1. Current Economic Situation………………………….. 3

2. The Pet Food MarketOverview……………………… 4

MARKET SECTOR OPPORTUNITIES AND THREATS ……. 5

1. Entry Strategy…………………………………………... 7

2. Market Size, Structure, and Trends………………. 7

3. Competition………………………………………………. 8

COSTS AND PRICES……………………………………………… 9

MARKET ACCESS………………………………………………….. 9

BEST PROSPECTS………………………………………………… 10

I. KEY CONTACTS ANDFURTHER INFORMATION………… 10

THE PET FOOD MARKET IN THE DOMINICAN REPUBLIC

MARKET OVERVIEW

1. Current Economic Situation

The economic situation in the Dominican Republic is very stable, and it has a promising outlook. The Fernandez administration, which took power in August 2004, launched an economic adjustment and stabilization program aimed at restoring macroeconomicstability, a program that was renewed in late January 2005 with the signing of a standby agreement with the International Monetary Fund (IMF). This program has imposed stringent adjustments, especially in public finance and the banking sector, the main sources of the imbalances that undermined stability and encouraged the outflow of capital in recent years.

According to the EconomistIntelligence Unit Country Report 2006, the government’s main challenges for years 2007 and 2008 will be: to consolidate the stabilization process, to enhance fiscal management, to strengthen the financial system, and to address a crisis in the electricity sector.

The DR-CAFTA is expected to come into force early this year. Policy will continue to be guided by the 28-month stand-by arrangement with theIMF that expires in July 2007, but experts expect it to continue for another year.

Currently, the exchange rate of the Dominican peso is quite stable ranging between DR$31.00 and DR34.00 to US$1.00. The forecast is that the Gross Domestic Product (GDP) will grow by 8.5% by the end of 2006 and by an average of 4.5% for 2007 and 2008. Inflation is returning to single digit levels. At the endof 2006, inflation is expected to be 6.7. For 2007 and 2008, it is expected to be 6.5% and 6.2%, respectively.

2. The Pet Food Market Overview

The Dominican Republic has a great potential for pet food imported from the United States. Dominican importers prefer U.S. brands. Importers and retail buyers are willing to pay a slightly higher price for higher quality products. However,some market and policy conditions are hindering imports from the United States and benefiting imports from other competing countries, such as Central America.

The market for pet food in the Dominican Republic started to develop about ten years ago. Importers saw the market potential with the increase of pets in the country. The increasing demand motivated business people to try to find...
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