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Strong Growth in Peru's Industry Set to Continue

by 5m Editor
15 January 2010, at 10:38a.m.

PERU - From 2000 to 2008, poultry output has increased by more than 60 per cent, according to a recent report.

Peru's poultry sector has seen high levels of investment over the past decade, according to a new report entitled Peru Agribusiness Report Q1 2010 from Companies and Markets.

The report states that Peru's agricultural sector weathered the tough conditions in 2009 better than those of many of its Latin American neighbours. In December, agriculture minister, Adolfo de Cordova, said Peru's agricultural GDP was expected to grow by 2.5 per cent year-on-year (y-o-y) in 2009. While not a stunning figure, considering the poor world economic conditions and the poor weather that hit agricultural production across much of South America, the turnout could surely have been a lot worse. The value of agricultural exports for the year were also expected to be up 2.5 per cent y-o-y according to the agriculture ministry.

Interest in Peru's underdeveloped agricultural sector has been rising over the past few years. The agriculture ministry estimates that 3.99 billion nuevo sol (PEN; US$1.39 billion) was invested in the country's agriculture sector in 2009, up from only PEN1.23 billion in 2006. This is a promising sign and we believe there are many more opportunities for investment in the sector. There are, however, still many obstacles to the development of a modern, efficient agricultural sector. First among these is the poor state of infrastructure outside of the main population centres.

The sugar has been one of the areas drawing in investment over recent years. In the first 10 months of 2009, sugar production reached 860,138 tonnes, up 6.5 per cent y-o-y. Cane production was up 7.2 per cent y-o-y over the period. Increasing production is being driven by ongoing investment in cane production on the northern coast of Peru. In 2010, we forecast production to grow again to 1.16 million tonnes driven by an increase in the area planted to sugar cane on the back of high prices. The high yields achieved by sugar cane growers in Peru have also attracted investment in production of ethanol. Maple Energy in 2007 purchased a 10,676 hectares plot of land on the Peruvian coast with around 8,000 hectares set to be used for cane production to feed its ethanol plant which is now set to come online in late 2010.

Peru's poultry sector has also seen high levels of investment over the past decade. Poultry production is by far Peru's most valuable livestock sub-sector. The value of poultry production is worth more than that of pork and beef combined. From 2000 to 2008, poultry production grew by 61.8 per cent. In the first 10 months of 2009, despite the economic slowdown, production grew 7.3 per cent to 768,760 tonnes.

Over the forecast period, continued strong growth in production is expected and forecast annual output to reach 1.22 million tonnes in 2014, up 30.4 per cent on the 2009 level. Despite the overall rosy outlook for poultry, there are still issues holding the sector back. Often, poor sanitary conditions and a lack of knowledge among producers makes disease control problematic.

Further Reading

- You can view the full report (fee payable) by clicking here.