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BMI View: We continue to maintain a generally positive outlook for the Peruvian agricultural sector. We
have modestly revised our forecasts for several segments of the Peruvian agricultural sector in our Q4 2016
update though continue to maintain a positive outlook for the agricultural sector as a whole. Export crops
such as coffee and cocoa are hampered by infrastructure constraints and a lack of investment; however, as
Peru develops and gains recognition for organic and speciality crops, both these sectors stand to benefit.
Peru is also set to benefit from cheaper food imports owing to the lower price of grains and weakness in the
Argentine peso, as Argentina is a major source of imported grains. Recently the focus has shifted towards
the coffee and cocoa crop, both strong export based revenue generating commodities for the Peruvian
economy. Peru is one of the largest exporters of coffee, and organic coffee in particular. The recent rust
disease significantly diminished the national coffee crop and has forced many smaller, independent farmers
into bankruptcy. Looking forward, we believe that both coffee and cocoa will post strong gains.
Furthermore the dairy and livestock sectors will also grow significantly based on rising incomes and
private final consumption levels.
? Poultry production to 2019/2020: 1.429mn tonnes. Ongoing investment and the availability of cheaper
imported feed will support growth in the sector.
? Sugar consumption to 2020: 1.648mn tonnes. Low sugar prices and the rapid expansion of the local
confectionery and soft drinks sector will see an expansion in demand for sugar in the coming years.
? Corn consumption to 2020: 4.64mn tonnes. Domestic consumption of corn is set to increase as Peru
imports more corn from Andean neighbours at a cheap price.
? Cocoa production to 2020: 98,000 tonnes. Cocoa production will increase as export demand remains
stable and investment is made into Peruvian cocoa infrastructure.