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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Growth of Expoalimentaria reflects rising importance of Peru in world agriculture

Thursday, September 04, 2014 > 08:52:51

(Produce News)

Peru is becoming a bigger player on the global agriculture stage, and that was reflected at the recent Expoalimentaria trade fair, held Aug. 27-29, here.

The Asociacion de Exportadores de Peru, or ADEX, which organizes Expoalimentaria, has seen significant growth in the trade fair since its first installment in 2009, when the exposition was held in a 6,600-square-meter hall with 195 national and 10 international exhibitors.Pacheco

The 2014 expo was held in a 23,400-square-meter space and drew 470 national and 195 international exhibitors. Visitors at this year's event numbered more than 40,500, compared to 8,300 in the 2009 show, representing a nearly 500 percent increase.

"Peru has become a very reliable supplier and firms are committed to providing the best quality all the way though the supply chain," said Gaston Pacheco, president of ADEX. "There is a consistent effort of small producers to meet requirements, and they are duplicating what they are seeing in more developed markets."

At the same time, Pacheco admits that there is still work to be done regarding infrastructure in the country, as logistical issues can add up to 35 percent to the cost of production for some items.

"We are working to reduce that number to become more competitive in the world market," he said, adding that international markets typically see about an 8 percent cost in production.

"We are behind on our infrastructure and need to further develop that," Pacheco said. "We are working on developing good roads and rail systems to move products more efficiently, and we are getting investment from the private sector as well to fill some of the funding gaps."

The trade show featured agricultural products from throughout the country, including grains and seafood. But fruits and vegetables stood out as a highlight, with various exhibitors touting their fresh and processed products.

Rafael Zapata, a director at Wolf Peru SAC, which grows a variety of produce items including avocados, mangos, asparagus, citrus, grapes and onions, greeted visitors to the company's booth during Expoalimentaria.

"The United States is a natural partner for Peru due to its location," he said. "We have 10 to 15 days of transit time to the United States vs. 25 days to Europe."

He said Wolf Peru grows about 50 containers of avocados from Peru and would ship approximately 30 percent of its production to the United States, with the remaining volume going to Europe. But he said avocado exports to the United States are poised to make a significant jump, and he is currently looking for more U.S. importers with which to work.

"Two years ago the market opened up as a result of the free trade agreement," he said. "In the beginning, the packinghouses in Peru were not certified, but now we have certification at five packinghouses, and next year we expect certification in about 200 packinghouses. Peruvian quality is getting much better as we are getting more investment and government involvement."

At the Key Peru booth, Miguel Ognio spoke of the company's rapid rise as a sweet onion supplier to the U.S. market, working in coordination with its major import partner Keystone Fruit in Greencastle, PA.

Ognio said he started growing onions in 2000 on a about a three-hectare plot. After seeing some initial success, he began leasing more land to grow more product. In 2006, he started his own farm north of Lima on 40 hectares, and then purchased land to the south in Ica. Currently, Key Peru has about 70 hectares of its own land and has obtained certification of its land and packing facilities. In 2012, the company started a direct supply relationship with Walmart.

"In the United States, the preference is for sweet onions and consumers want to get the best product at the best value," he said. "We have been working with Keystone to get the word out about our onions, and that has been very effective for us. It is a very good partnership, because we trust them to get the best prices for us, and they trust us to send the best product."

He said water and soil management are the key factors in producing a sweet onion, and they continually work to ensure they produce onions that register low on the Pyruvic acid scale.

"We work consistently to produce onions that are low in pyruvic acid," he said. "We like to be below 4.5 on the scale, and we average about 3.5."

Key Peru ships about 1,200 containers to the United States from early August to early January, with about 60 percent being marketed through Keystone and the remaining 40 percent to Walmart. Walmart has been looking to take more from us, and we would like to develop more direct supply deals with other retailers as well.

He added that Key Peru has been in compliance with traceability from the very beginning, and also has Fair Trade, Global GAP, Rainforest Alliance and Tesco certifications.

Rafael Cortes, managing director of CWT Group, a grower of grapes, ships Red Globes, Flames and Sugraones to the United States through importers AMC Group and Wm. Kopke, said he would like to increase his business in the United States because of favorable prices, but the U.S. market can be a challenge due to the exacting quality standards that are demanded.

"We will be attending the PMA Fresh Summit [in Anaheim, CA] this October, because we are looking for another strong partner," he said. "We grow grapes, but we also export avocados and citrus to the United States."

Doña Pancha is relying on increased business with the United States as it is looking to ramp up its asparagus production in the coming years. Currently, there are about 295 hectares in production with a goal of hitting 1,000 hectares in the coming years, according to Jan Hoefsloot.

"Currently, we ship about 1.8 kilograms to the United States, working with importers Gourmet Trading, Harvest Sensation, Crystal Valley and Pac Pro," he said. "The U.S. wants good shelf life and good quality. Demand has been there, but prices have been low. We came in a little early this year at the end of February, but we'll push that back to June when we have a better market."

Hoefsloot said the company is adding Mandarins, pomegranates and lemons to its product roster, but won't have production for about five years when trees come into maturity.

"We have to plan for the future," he said.

Gaspar Nolte, a Lima-based senior agricultural specialist for the U.S. Department of Agriculture, said grape exports are poised for big growth, calling them "the next asparagus," with new areas being planted in the northern region of Piura.

Additionally, blueberries are showing good potential to be the next big fresh produce product in Peru, and companies are making major investments in that category. Currently, there are about 2,000 hectares of blueberries, which carry a cost of $60,000 per hectare in irrigation and planting. In five to seven years, about 10,000 hectares of blueberries are expected to be in production.

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