South American Real Estate News

Geographical differences between Peru and its competitors give it an edge

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Peru’s Advantage over other export competitors 

Peru has a geographical advantage, in that they can grow many horticulture crops all year-round, meaning they can choose when to produce and sea freight produce ahead of its Southern Hemisphere competitors, giving them an advantage over the bigger players such as Chile and Argentina. “Peru can also go head to head with Chile in the main season. Chile has years of experience in exporting blueberries and is very good at it, but Peru is catching up.

One of the major players in this field is Ingleby Farms who are managing around 2,000 ha of irrigated land in the North of Peru. Their farms are located in the Motupe Valley and in the Olmos development.

The Olmos Irrigation Project 

Two thousand meters under the Andean range, South America’s deepest aqueduct carries water that grows thousands of hectares of fruit and vegetables in one of Peru’s most desertic and underdeveloped regions.

The aqueduct, one of the largest engineering works ever undertaken in Peru, travels 20 kilometers (12 miles) under the Andean mountains, diverting the waters of the Huancabamba river towards Peru’s northern coast to irrigate 43,500 hectares of crops planted in the desert.

The Olmos irrigation project is located 900 km (560 mi) to the north of Lima and required a $600 million budget, was built by now disgraced for corruption Odebrecht Latinvest.

The water flows from the Limon dam, a wall 330 m (1,082 ft) long and 43 m (141 ft) high built across the Huancabamba river to dam 30 million m3; the starting point of a 65-km (40-mi) route that carry water to the crops.

After flowing through 20 km underground under the Andes, the tunnel becomes a waterfall into the Lajas river, 30 km (18.6 mi) later it is collected by irrigation channels leading to another dam that then proceeds to distribute the water to the fields.

Lands once arid now boast Sugarcane, grapes, avocados, mangoes, asparagus, and even cranberries, and now employs 1,000’s of workers.

The project covers 5,500 Ha of Valle Viejo de Olmos’ farmlands and 38,000 Ha purchased by Peruvian, Chilean, US and European corporations with an estimated production of around $650 million.

Among the project’s corporate partners, the Peruvian group Gloria has built a $300 million sugar refinery plant and Agro-Frusan, a US-Chilean joint-venture producing 2.5 tons (5,512 lbs) of cranberries daily for export to US and Canada.

This project will achieve full speed once the project’s second phase is completed, increasing by four the Limon dam’s capacity and doubling the irrigated surface to nearly 100,000 Ha.

The tunnel, conceived some 90 years ago by British engineer Charles Sutton, was completed in 2012 to alleviate the hydric resources deficit in the Olmos dry valleys in the Lambayeque region, which sees an average annual rainfall of under 25 liters per square meter.

The Peruvian horticulture industry has set an ambitious target to significantly widen its export offer of high quality fresh, dried, frozen and processed fruits, vegetables, superfoods, grains, and other food and drink ingredients.

There is also a cornucopia of smaller volume, specialty and niche products that are emerging from Peru. These can be supplied in fresh, dried, frozen or processed and semi-processed formats, and are ideally suited to the foodservice, ingredient and manufacturing sectors. Many are produced organically too.

They include ginger, passion fruit, cherimoya, granadilla, lúcuma, prickly pear (cactus fig), golden berries (physalis), peppers (bell, piquillo, jalapeño and cherry), and artichokes. Plus, Peruvian superfoods and grains, such as quinoa, amaranth, chia seeds, cañihua, maca (Peruvian ginseng), yacón, cat’s claw, camu camu, sacha inchi and sangre de grado (dragon’s blood), among other plants still scarcely known in other parts of the world.

Peru is one of the most mega-diverse countries in the world and benefits from numerous ecosystems. That, coupled with the progressive introduction of technology and innovative production and processing methods, means the Peruvian agriculture sector has incredible export potential.

With both Peruvian cuisine and healthy food in vogue across major consumer markets, and Peru’s agricultural frontier set to expand to 260,000 hectares thanks to mega irrigation projects ( Olmos ), the South American country is poised for new growth via a diversified product basket.

“Peru is already highly regarded for fresh produce like asparagus, table grapes, mandarins, clementines, avocados, mangoes, peas, chillies and squash, but we have much more to offer retail, wholesale and food service, buyers.

Europe is Peru’s most important export market. Approximately 67 percent of exports are destined for Europe, while another 20 percent is sent to the United States. Latin American and Asia receive the rest. With growing demand in China, Hong Kong, and Japan, Peru’s avocado export markets are forecast to continue expanding. The domestic market is still small, but the sector is conducting aggressive promotions and marketing campaigns to improve local consumption.

By 2020, Peru plans to triple its horticultural exports to 2.3 million tonnes and more than triple the value of those sendings to US$3.8 billion (£2.5 billion). Considering buyers already have a positive view of Peru, the country’s exporters are eager to build on that reputation as they expand their market presence.

Peru is seen as a strong supplier with excellent weather and growing conditions. In fact, Peru has 82 of the 111 climates in the world. Their producers can grow almost anything and they enjoy high yields across a range of agricultural products. There are still a lot of exciting possibilities for buyers to discover!

These good results go hand in hand with the work carried out by Senasa, which is responsible for certifying the Hass avocado production sites or fruit that has great exportable qualities after verifying that it hasn’t been affected by the Fruit flies (Ceratitis capitata, Anastrepha fraterculus and Anastrepha striata). The Stenoma catenifer quarantine pest does not affect the exportable fruit, due to the climatic conditions of the Sierra.

The phytosanitary certification of the production site granted by Senasa makes it possible to guarantee that their avocado complies with the international regulations and the phytosanitary requirements demanded by the importing countries, such as Spain, Holland, China, the United States, and Canada.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and disposal.

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About Gateway to South America

Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone clients in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate marketing services. If you enjoy reading our news site please share it on your social media below.

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