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Peru Agribusiness Report Q1 2014 - New Market Report

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2014-01-05 00:42:25 - New Food market report from Business Monitor International: "Peru Agribusiness Report Q1 2014"

Our outlook for Peru's agricultural sector remains positive. The livestock sector is very dynamic, and investment into the country's ethanol sector is boosting sugar production. Export crops, such as coffee and cocoa, are hampered by a lack of infrastructure and investment, but there is scope for strong growth in both, particularly as Peru is becoming increasingly recognised for organic and speciality crops. We caution that a lack of profitability threatens to weaken the dairy sector; this could be further exacerbated by the forthcoming entry into force of the free trade agreement with the EU.

Key Forecasts

* Poultry production growth to 2016/17: 19.8% to 1.4mn tonnes. Ongoing investment and the availability of cheaper imported feed will support growth in the sector.

* Sugar production growth to 2016/17: 30.2% to 1.4mn tonnes. The rapid expansion of the ethanol sector will see increasing investment in sugar cane.
* BMI universe agribusiness market value: US$12.9bn in 2014 (up from US$12.8bn in 2013; forecast to grow annually by 1.8% on average to 2017).
* 2014 real GDP growth: 4.9% (up from 4.8% in 2013; forecast to grow annually by 5.0% on average between 2012 and 2017).
* 2014 consumer price index: 2.9% y-o-y (up from 2.8% in 2013; forecast to grow annually by 2.9% on average between 2012 and 2017).
* 2013 central bank policy rate: 4.00% (down from 4.25% in 2012; forecast to average 2.9% over the rest of our forecast period).

Full Report Details at

Industry Developments

We maintain our forecast for Peru's sugar production to increase 5% y-o-y to 1.22mn tonnes in 2013/14, a result of yield improvements and new processing capacity. The average sugar yield in 2012/13 was 128 tonnes per hectare (ha), up 4% y-o-y. Total harvested area in 2012/13 was 81,149ha. For 2013/14, local industry sources are indicating that sugar yields could be as high as 190 tonnes/ha in some regions, which could push up the average and support production growth. Moreover, weather conditions have reportedly been favourable during plantings, with sufficient water supply and investments in new plantations.

Falling production in West Africa, as well as growing prospects for consumer markets in Eastern Europe, India, China and Russia, have opened a window of opportunity for alternative producers such as Peru. The country's government supported cooperation between international agencies such as GTZ from Germany and USAID and local producer associations such as Asociacion Peruana de Productores de Cacao. The aim of the cooperation has been to identify quality beans from various cacao-growing areas, to homogenize and improve production processes, especially post-harvest stages when the fruit's aroma and taste develops. Peru is also working to increase yields in the sector. Finally, as for coffee, the country is trying to position more of its production as organic, in order to meet increasing world demand.

It has been discovered that quinoa, which is primarily grown in Peru and Bolivia and is becoming increasingly popular in Western countries for its nutritious values, grows very well in the UAE. To use the scientific term, it is a halophyte, thriving where most other crops would be unable to grow, which is handy in a country where the soil is extremely salty and likely to become more so. The most tolerant varieties of quinoa are able to cope with salinity levels as high as those present in seawater, and scientists at the International Centre for Biosaline Agriculture in Dubai have found that certain types of quinoa offer very impressive yields in the UAE. Other countries where the UN Food and Agriculture Organization believes quinoa could offer good yields include Brazil, France, Sweden, Kenya, India and Australia. The findings are important especially for countries where very few crops can be grown with profitable yields.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

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