Effects of COVID19 on agribusiness in Colombia, Peru & Ecuador - UPDATE #3
Here is an update of the most relevant developments so far in Colombia, Peru & Ecuador related to COVID-19 and the effects on the agricultural sector. Read more about the impact it has on Coffee, shrimps, avocado, banana, rice.
Coffee negotiations have exceeded contracts for more than US $ 150 million. Previously, a drop in coffee had been reported in the national GDP of the first quarter, which now highlights that it is a normal behavior of coffee for this time of year since its production and marketing begins between April and May.
Colombian coffee is going through a great moment in its history: it has a great world demand that even without finishing the harvest of the first semester it is already signing contracts for 2021 and even 2022 for multinationals like Starbucks, the bag of 125 Kg continues above COP $ 1 million and on the New York Stock Exchange the price is US $ 1.03.
The National Federation of Coffee Growers of Colombia, recommends to negotiate coffee for future contracts because of prices, however there is also a risk that the producer will not be able to comply with production and will have to face penalties.
The coffee harvest runs until June despite the anticipated problems regarding the available capacity of harvesters, the sector already has 90% of the labour capacity. At the end of this month it is projected that there are 150,000 pickers looking to collect more than 6 million bags. However, a new concern is born, which is the rise in input prices by 20%, especially affecting the small coffee farmer.
28 tons of hass avocado will arrive to China. Last year the hass avocado managed exports for almost US $ 90 million, and its expansion in Asia is just beginning.
Under the implementation of the health diplomacy strategy and the verification of the Colombian Agricultural Institute (ICA), and the Ministry of Agriculture, 28 tons will leave the Colombian Pacific port next Thursday, May 28.
Exports are carried out by the company Cartama (Avofruits) that has more than 15 years of experience in the productive and commercial development of the cultivation of hass avocado in Colombia and participates with about 20% of the country's total exports.
China is the 10th importer worldwide and with this export, Colombia already has access to the top 10 importers.
Colombian shrimp industry will be able to continue exporting to the US market. The national shrimp fleet was certified by the United States Department of State and the National Oceanic and Atmospheric Administration for two more years due to compliance with the technical protocols required by the Sea Turtle Excluder Devices Program.
An inspection visit to the Caribbean fleet was made in March by international authorities to verify compliance with the required measures, which ultimately led to this benefit being achieved for the Colombia.
Peruvian rice has better opportunities abroad due to the Government resolution about the refund of the Tax on the Sale of Rice, which will make that chain more competitive, according to the Association of Exporters (Adex). Rice exports in 2019 were US $ 21 million, its main destinations were Colombia, Chile, Canada, USA. and Maldives.
Between January and April of this year, pomegranate exports reached 30,047 tons. That volume is 21% less compared to the same period in 2019. The main destinations in April were the Netherlands (34%), Russia (9%) and the United Kingdom (4%). In all of them, there were strong contractions in the volume shipped compared to the same period in 2019, according to Fresh Fruit Peru. In April, the drop was more pronounced and shipments totaled 10,079 tons, 33% less than in 2019.
2020-2021 coffee campaign: production of 4.45 million bags is expected, that would represent 2% less for the same period in 2019, when 4.55 million bags of 60 kg were harvested.
Total exports for 2019 were 3.9 million bags. The main destination was the United States (25%), followed by Germany (22%) and Belgium (9%). Export prices averaged $ 2,734 per MT, an increase of 4.5% compared to 2018.
Peru is the world's largest exporter of organic coffee, with some 90,000 certified organic hectares.
A curfew was established in the most affected regions of Peru, it runs from 16:00 to 4:00 this is affecting exports of organic bananas since packing only works until 14:00 and they can only pack half of the total volume.
Peru is the world’s largest exporter of organic bananas, between January and April Peru has exported 60,000 tons, the main destinations for organic bananas from Peru were the Netherlands, Panama, the United States, Belgium and Germany, among others.
Flower sector will receive credit for $ 20 million for its recovery
flowers used to export 520 million dollars during the first semester of the year, during the emergency according to the president of Expoflores, exports has barely reached 11%. An encouraging picture was presented for Mother's Day where sales managed to rise to 40% but then the picture remained the same.
17% of the hectares that produced flowers no longer do so, before the emergency, Ecuador produced 5,200 hectares of flowers, now the figure has dropped to 4,400 hectares and it will be maybe more. Also 9,000 people have left the sector, including workers, consultants, technicians, among others.
The Ministry of Agriculture managed to obtain a financing of 20 million dollars that must be granted in the next few days, with a 7-year plan, at a reasonable rate, small financing but still helps.