Effects of COVID 19 on agribusiness in Colombia, Peru & Ecuador
This short final analysis of 2020 shows the most relevant developments in Colombia, Peru & Ecuador related to COVID-19 and the effects on the agricultural sector.
The Colombian government has decreed health emergency until next February 28th. An expected growth of up to 3.5% and a total budget of approximately EUR 550 million for the agricultural sector in 2021 were announced by the Colombian Minister of Agriculture. To reactivate the economy, the government continues focusing on different strategies to reduce the number of intermediaries, promote electronic commercialization of agricultural goods and different financial solutions (mostly credits) focused on production and commercialization.
In general, agricultural export figures show a good performance during 2020. Some sectors like floriculture and fruits (especially hass avocado) have shown an improved performance, highlighting destinations inside the Asian market. Oversupply and contractions in the internal demand for poultry, potatoes and bananas among others, have resulted in an increase of the rural unemployment rate and lower sale prices.
In Peru the second wave has already begun, hence, the state of emergency has been extended until March 2021. December began with a five-day agricultural strike that blocked the Pan-American Highway in the Ica region, causing losses of over EUR 33 million in domestic and exportable agricultural products. The main affected crops are asparagus and table grapes, whose harvesting seasons coincided with the demonstrations. The strike also led to the withdrawal of the current Agricultural Promotion Law. A new law is currently being discussed in the Congress and should be voted on in the next few days. If no agreement is reached on this new law, it is expected that the strike will resume.
Despite the impact of the COVID-19 on economic activities, the agricultural sector has maintained its positive growth trend. It is estimated that between January and October, the agricultural sector grew by 2.1%, a higher rate than the 2.0% recorded in 2019. Among the crops that have increased their production are coffee, cocoa, avocado, blueberry, rice and paprika peppers.
Ecuador remains under national health emergency, the pandemic has hit this country very hard. Although food supply has remained stable, rural unemployment rate has increased affecting consumers preferences for cheaper products (less proteins but more fruits and vegetables).
The Ministry of Agriculture is currently working on the National Agricultural Plan with the aim of making the country more competitive, whilst protecting producers. Traditional exports like banana and cocoa have shown a good performance and non-traditional, namely milk powder and medical cannabis are expected to grow with extra support under the National Agricultural Plan. Destination markets for Ecuadorian agricultural goods that have shown the highest increments are US, EU, China and Russia.