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Peru: Impediments to the initial impetus of capsicum exports to USA

When in 2016, thanks to the Senasa, the US market opened for the Peruvian capsicum (peppers), the expectation among the agro-exporters in the sector was very great, especially with 2017 in mind. However, there were factors that slowed down that initial impetus.

Renzo Gómez Moreno, president of the Association of Exporters (ADEX) Capsicum Committee, commented that growth has not occurred in the expected dimension because of two factors: the high cost of implementing mesh homes for cultivation (a condition by the US to enter its market) and the havoc caused by the El Niño Phenomenon this year.

"The mitigation measures to enter the United States are to produce in mesh homes or greenhouses; it is going to take exporting companies some time to start accessing this technology. The other issue is that the El Niño Phenomenon has wreaked havoc on greenhouse and open field facilities, and this has reduced the volume for 2017," he said. 

He explained that the initial projection for this year was to grow 5%, but that due to circumstances, the same amounts will be maintained, that is, an average of 128 thousand tons of capsicum. 

He added that the development of mesh homes requires an initial investment of 70 thousand to 100 thousand dollars per hectare, to which the whole process of local learning with the specific climatological characteristics of our country must be added. In that sense, he observed the importance of working with new seeds, not the same ones that are used in the open field, but indeterminate ones that grow upwards. 

While this process of adaptation is taking place, he said that more markets like Colombia, Brazil and Mexico are being sought. The latter, although a great exporter of fresh capsicum to the US, represents an opportunity in the off-season because it is also a large consumer market. In this way, the exports basket could be better balanced, which indicates that 67% of the Peruvian capsicum exports are canned, while 30% are dry and only the remaining is fresh and frozen. Normally, the fresh presentation will lead the shipments. 

In this area you can learn from countries like Israel, who place their products in the USA and Canada. But to match that capacity, we must develop post harvest systems that prevent the fruit from ripening and look for shelf-resistant varieties that imply a 22-25 day boat trip to the destination.

This work, he added, should be complemented by a differentiation strategy towards branded peppers, or a symbol product that grows very quickly. Rocoto is a first option, which is already seen in some countries. Another standard is the yellow pepper, basic for Peruvian sauces and flavors; without leaving behind the wide range of the forest's aromatic species. 

Internal market
Regarding the development of the domestic market, Renzo Gomez said that of the 170 thousand tons of capsicum that Peru produces annually, 35% remain in the country. A growth indicator would be that each day there are more and more hectares of rocoto, yellow pepper and exotic varieties like the chili pepper. 

"We are growing in area and this is because Peruvian cuisine is being re-evaluated, not only abroad, but Peruvians themselves are consuming more typical dishes where the chili is a main product," he said. 

He highlighted the case of the industrialized national peppers' sauces made from chef's preparations who know Peruvian's taste, and who are consolidating themselves in the massive consumption market. The boom of these products is such that each time they are gaining preferences on Peruvian's tables over products like mayonnaise. 

Strategic plan
The VIII International Capsicum Convention to be held in Arequipa from October 25 to 27 will be the ideal scenario to present the Strategic Plan developed for the private sector, by the State through its agencies (Senasa, Minagri, Promperú, INIA) and the academy. Gómez emphasizes that this document's central factor are small producers.

To that end he recalled that an area like Oxapampa has 2,000 hectares of rocoto, which is an important extension, but one that needs access to the market and marketing lines.

"We have all managed to get together and we have made a Strategic Plan that covers the inefficiencies and strengthens the sector's good work. There small producers are the main factor. Normally in exports two or three products are of great volume, and in this case these are the red pepper, piquillo and paprika, each linked to different types of farmers. If we see the 'boom' of Peruvian gastronomy linked to the peppers, sauces and others... small farmers are the ones that will support the supply of these products," he said. 

Before Arequipa, the capsicum sector will have an appointment at the Expoalimentaria fair in Lima from September 27 to 29 at the Jockey Exhibition Center. The partner companies of ADEX that will participate are Agroexportadora Sol de Olmos, Natudrinks, Proveagro, Provenzal, Ram Industries, S & M Foods, Walibi, Danper and Ecosac.

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