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Agritech market in Peru

Peru is the third largest country in South America with a population of 29.25 million. The Peruvian economy experienced a contraction in 2009 during the financial crisis, however in recent years the economy has demonstrated a sustainable and fast growth rate.

The recovery was quick due to a low inflation rate (2.8 percent in 2010), high business confidence and private investment growth of an average of 15 percent during the last five years.

Peru is New Zealand’s third largest export destination in Latin America. In 2010, New Zealand’s exports to Peru totalled US$57.02 million. New Zealand’s agritech exports to Peru totalled US$1.77 million in 2010, an increase of 180 percent from 2006 (US$0.63 million).

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Getting your product into market

New Zealand pastoral farming products are not well known in the market. The promotion strategy of the New Zealand pastoral-farming model (to increase agricultural productivity by improving pasture, animal and farm management) should focus on stand-alone elements that can be applied to the way Peruvian farmers operate today.

The key to good market presence is finding the right distributor who can sell and distribute your product into the relevant areas. Given that most distributors in Peru seek exclusivity, we recommend that you spend time searching for the right distributor for your company’s products.

If you choose to go with an importer/agent who will sell onto rural distribution channels, check that the extra margin they charge does not result in an uncompetitive final customer price. An agreement for marketing and promotion costs must be clearly established with agent / importer.

Regulation

Custom duties on imported goods are imposed on an ad-valorem basis at rates of 0 percent, 9 percent, 17 percent and 20 percent.

The majority of agribusiness goods entering Peru arrive duty free, however the payment of goods and services tax (IVA) on freight and insurance is still applied in most cases. IVA is applied to the CIF value of import goods, plus corresponding duties, at a rate of 18 percent.

Opportunities

There are opportunities for high tech machinery, seeds for agriculture and products for livestock (such as hormones and vaccines). Agriculture is a sector that New Zealand is known for its expertise, with opportunities for New Zealand companies to provide consultancy services and training.