Peru Emerges as a Significant Market for US Agricultural Products
In 2023, Peru was the 28th largest market for US agricultural exports, valued at $851 million, making it the third largest market in South America. The US–Peru Trade Promotion Agreement (PTPA) entered into force in February 2009, and US agricultural exports reached $1 billion for the first time in 2014, peaking at $1.36 billion in 2018.
The United States accounts for 14% of Peru’s agricultural import market share, positioning it as the second largest supplier to the country. Since 2019, US agricultural exports to Peru have decreased by 17%. However, there has been an average growth rate of 4% since 2009. While Peru mainly imports bulk commodities globally, there is significant growth potential for US consumer-oriented agricultural products.
Macroeconomic Perspective
Peru is the fourth most populous country in South America, with half its population less than 30 years old and 79% of its 33 million residents living in major urban areas as of 2023. The US International Trade Administration reports that Peru’s agricultural sector is expanding, supported by direct investments from the Peruvian government. However, this sector has encountered numerous challenges due to extreme weather events, earthquakes, landslides, El Niño rains, and other natural disasters. These difficulties have prompted Peru to increase its imports of foreign commodities.
The Central Intelligence Agency World Factbook classifies Peru as an upper-middle-income economy. The country has experienced rapid economic growth in recent years, although this has slowed due to the COVID-19 pandemic, political instability, and social unrest. Nevertheless, the World Bank indicates that Peru is on the path to recovery from the economic impacts of the pandemic, projecting a real gross domestic product (GDP) growth rate of 3% in 2024, along with a decrease in inflation to 2%. Additionally, the number of middle-income households rose by 26% between 2019 and 2023.
Consumption Trends and Market Drivers
Peru’s increasing urbanization, the rise in single-person households, and a younger demographic drive a higher demand for convenient food. S&P Global anticipates that Peru’s online food delivery market will expand by 19% from 2020, reaching $835 million by 2024.
The growth in food delivery services is leading to new supermarkets opening in both urban and suburban regions. The US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) Lima predicted a 5% increase in the food retail sector by 2024. While traditional outlets like wet markets and bodegas continue to thrive, major supermarket chains such as Cencosud (Wong and Metro), Saga Falabella (Tottus), and Supermercados Peruanos (Vivanda, Plaza Vea, Makro, and Mass) are adopting innovative strategies to attract consumers, including private labeling to reduce prices on items like dairy and grains.
These marketing initiatives, aimed at lowering costs, mainly target Peru’s growing youth demographic. With fewer individuals getting married and the economy recovering from the COVID-19 pandemic, food prices have become a significant concern for many young Peruvians. As convenience becomes a priority, along with the demand for more affordable and healthier options, US exporters have a valuable opportunity to cater to this changing market landscape.
Meat Products
In 2023, US exports of meat products to Peru reached $82 million. The leading suppliers of meat products to Peru include Brazil, the United States, Chile, and Argentina, with the United States accounting for 28% of the market share. The leading meat product that the United States exports to Peru is poultry, especially frozen chicken leg quarters. Meat products feature prominently in traditional dishes, such as anticuchos (skewers of grilled, marinated, and sliced beef hearts). However, Peru uses a significant portion of meat products in food processing and the hotel, restaurant, and institutional (HRI) sectors. According to FAS Lima, the growing demand for affordable meat cuts in the HRI sector has spurred the local production of packaged processed meats, particularly sausages for fast food restaurants, as well as hot dogs and burgers, increasing the need for mixed meat inputs, including beef, pork, and poultry. .
