Thursday, September 14, 2017

Peru Promotes Avocados In The US Market

"Peru Promotes Avocados In The US Market"
W. Alejandro Sanchez and Brittney J. Figueroa
Living in Peru
5 September 2017
Originally published: http://www.livinginperu.com/peru-promotes-avocados-us-market/

Avocado toast, avocado face masks, and avocado desserts are only some of the latest trends in the U.S. growing the demand for the delicious fruit and Peru is ready to provide.

Marketing for Peruvian products has hit the streets of the U.S. capital, Washington DC. One of the authors of this commentary has seen posters promoting Peruvian avocados plastered on the sides of DC public transportation metro-buses, which show aPeruvian avocado, with the renowned Machu Picchu in the background and the phrase “Avocados from Peru” in large font.
A web address (avocadosfromPeru.com) links to a site maintained by the Peruvian Avocado Commission, headquartered in Washington DC. The commission is part of the Hass Avocado Board, an organization that has a membership of some 20,000 producers and importers from California, Chile, the Dominican Republic, Mexico, New Zealand, and Peru all involved in the U.S. Market.

A Growing Market for Avocados

The increase in demand and trendiness of the fruit has greatly affected thepopularity of avocados, particularly in the coveted U.S. market (a 2014 USAID report explains that “the U.S. is a negligible avocado exporter”so practically all of the 245,000 MT of domestic production is consumed domestically).
As an example of how this fruit has gone viral, at the time of this writing, there are6,424,857 public posts under the Instagram hashtag “avocado” with posts including colorful recipes by health gurus, tutorials on how to implement avocado into a beauty regimen, and even avocado art. According to the Hass Avocado Board’s report on market trends52.2% of US households purchased avocados in 2016, a 0.5% percent increase from the prior year, and one that is expected to grow further during 2017.
While grocery stores continue to possess the main share of avocado purchase dollars at 73%, Wal-Mart has been the main growth driver in trends with +$10.7 million in incremental purchases and 28.9% of avocado-purchasing households buying from its stores during 2016. In the First Quarter of 2017 alone (ending on 3/26/17), avocados headed the list of top trending fruit.

The Peruvian-US avocado trade has grown rapidly in the last six years.

Peru has projected to ship about 150 million pounds of avocados to US markets during this June-August season, a number more than twice the amount of its 70 million pounds of shipments last year. An off-bearing year in California coupled with decreasing shipment volume from Mexico in recent years has allowed this increase.With more than 10,000 hectares of avocado farms along the coast of Peru, heavy rains due to El Niño in March were a big concern for growers. However, the damage, mostly done to roads and bridges, only set back the harvest by a few weeks. Even with the setback, Peruvian avocados will be welcome this season, as this year’s inconsistent Mexican avocado crop season ended in June.The Peruvian-US avocado trade has grown rapidly in the last six years.

Keep In Mind: Mission Produce

Mission Produce of Oxnard, California has been and continues to be, a pioneer in the Peru-US avocado trade. Following their initial import of Peruvian avocados to the US in 2011, they began planting 6,500 hectares of Hass avocados in Peru in 2012, and most recently, in 2015, Mission completed the world’s largest avocado packing facility in Chao, in Peru’s La Libertad region.
The joint venture between Mission Produce and the Gonzalez Group operates under the name Avocado Packing Co.; which has proven to be a win-win initiative.The $30 million packing house is massive, covering more than 12 acres. It’s packing capacity is even more impressive, as it has the ability to handle 30 tons of avocados per hour when operating at full capacity with 60% to 70% of the fruit destined for US markets.
In line with Peru’s commitment to sustainable projects (see the authors’ article “Peru and Green Energy”) the facility features an MAF Rodaoptical sorter,conserves energy by incorporates motion sensitive lighting, and will be LEED certified. There are plans to incorporate a second packing line sometime in 2017 that would increase packing capacity twofold, to 60 tons per hour.

A Competitive Market

As a final point, it is worth mentioning that apart from the U.S. market, Peruvian companies are also looking for other customers in other parts of the world. For example, the Peruvian daily La Republica reported in 2015 about Peruvian avocados en route to the big Chinese market. More recently, in mid-July, the daily Gestion explained how a potential free trade agreement with Australia will allow the import of eight Peruvian products, including avocados – the newspaper reported that the Australian avocado market is worth US$ 72 million.

In spite of these successes, Peru is not the biggest avocado exporter at the global level.

According to a March report by the Mexican daily El FinancieroMexico has the largest production of avocados, followed by the Dominican Republic, Colombia, and then Peru, in fourth place. It is worth mentioning that Mexico’s place as the biggest global exporter, and its access to the U.S. market, may be in jeopardy, not due to anything wrong with the product itself but rather due to politics. Namely, U.S. President Trump has discussed the idea of a tax on Mexican imports, which would include avocados; and, as CNN Money explains “in 2017, the U.S. is expected to get about 80% of its avocado supply from its southern neighbor, according to Tom Bellamore, president of the California Avocado Commission. That’s 2.14 billion pounds of avocados.”In spite of these successes, Peru is not the biggest avocado exporter at the global level.

It’s unclear if Washington-Mexico City relations will deteriorate to the point that Mexican imports are taxed if they want to enter the U.S., but if such a situation does happen, avocado exporters like Peru could greatly profit.

Final Thoughts

In various articles for Living in Peru, the authors have covered some of Peru’s signature agricultural exports to the world (particularly the U.S. market), such asblueberriesquinoa and, now avocados. Indeed, agriculture and minerals continue to be the cornerstone of Peruvian exports, which means that the country’s economy is at the mercy of either a precious mineral (e.g. copper) drying up, or a massive weather pattern destroying crops. Thankfully, the latest El Niño in Peru did not significantly hurt the avocado crops, but a similar situation could occur in the near future.

For the time being, Peruvian avocado growers and exporters will continue to profit from U.S. consumers’ growing interest in this crop.

The Peruvian Avocado Commission’s feature of Peruvian avocados on Washington DC’s public transportation system, with the always-recognizable Macchu Picchu in the background, is just one example of the ingenious ways agencies are successfully marketing this crop in the U.S. When Americans eat avocados, they should think beyond California and Mexico, and think of Peruvian avocados. 
Alejandro Sanchez Nieto is a researcher who focuses on geopolitical, military, and cyber security issues in the Western Hemisphere. Follow him on Twitter: @W_Alex_Sanchez
Brittney J. Figueroa is a recent graduate of the University of California, Santa Barbara with a Bachelors degree in Global Studies, and a Minor in Latin American Iberian Studies.
The views presented in this essay are the sole responsibility of the authors and do not necessarily reflect those of any institutions with which the authors are associated.

TNI: Bloc Party Blues: Why Brazil Might Leave BRICS

"Bloc Party Blues: Why Brazil Might Leave BRICS"
W. Alejandro Sanchez
The National Interest - Blogs
5 September, 2017
Originally published: http://nationalinterest.org/feature/bloc-party-blues-why-brazil-might-leave-brics-22178

BRICS (Brazil, Russia, India, China and South Africa) will hold its ninth summit September 3–5 in Xiamen, China. Naturally, the international community will be eager to know about any new initiatives and agreements, particularly between China and Russia. The BRICS meeting, however, occurs at a time of increased challenges for Brazil, and it is debatable how much the country can continue to contribute to the bloc.
The South American giant impeached then-President Dilma Rousseff in August 2016, making Vice President Michel Temer head of state until the October 2018 elections. This means that President Temer will have been in office for around two years, with one left in his presidency. This is hardly sufficient time to formulate a concrete long-term foreign policy.
To complicate the situation further, President Temer was charged in June with corruption regarding alleged bribes from JBS, a meatpacking company. Then, in early August, he narrowly survived a new challenge:  the Chamber of Deputies voted 263–227 against having the Supreme Court commence a trial against him. On the economic front, Brazil is still attempting to overcome a years-long recession crisis; the Financial Times reported on August 24 that Brazil’s economy has “shrunk by 7.4 per cent in the past two years and the government is wrestling with ballooned budget deficits.”
In other words, President Temer will not travel to Xiamen with a quiet home front.
As for Brazil’s relations with its fellow BRICS members, the situation is currently mixed, with both positives and negatives developments. For example, President Temer visited Moscow in June to meet President Vladimir Putin with the goal of increasing bilateral trade between the two nations. Brazil-Russia trade reached$4.3 billion in 2016. Meanwhile, China is Brazil’s major trading partner, therefore it remains a priority for Brasilia to continue its close relationship with Beijing and perhaps seek investment opportunities via the BRICS-led New Development Bank, headquartered in Shanghai.
As for Brazil’s relations with India and South Africa, the idea of South-South cooperation has stalled. This is particularly true for India, as there have been hardly any new initiatives in Brasilia-New Delhi relations recently, apart from Prime Minister Narendra Modi’s visit to Fortaleza, Brazil, for the BRICS 2014 summit, and some defense-related initiatives (like the IBSAMAR exercises, the last of which occurred in 2016). If anything, India’s main priority regarding Latin America nowadays is Mexico, not Brazil.
Brazil-South Africa relations are slightly better than with India. For example, this past May, Brazilian foreign-affairs minister Aloysio Nunes Ferreira Filho visited several African nations, including fellow BRICS member South Africa, to jumpstart relations. Moreover, the 2016 free-trade agreement between the Southern African Customs Union and the Market of the Southern Cone, of which South Africa and Brazil are members, will likely increase commercial ties between the two countries.
The ninth BRICS summit arrives at a difficult time for Brazil. Its turbulent domestic politics and economic situation are not conducive to establishing a robust foreign-policy strategy. As for relations with fellow BRICS members, Brasilia is focused on increasing commercial ties in order to help jumpstart its economy. Hence, we can expect President Temer’s meetings with President Putin, President Jacob Zuma and President Xi Jinping to revolve around trade issues; a one-on-one meeting with Prime Minister Modi is required by protocol, although there have been no indications so far about an interest to increase Brasilia-New Delhi ties.
Since last year’s summit in Goa, India, there has been speculation about Brazil opting to leave BRICS. While it is unlikely that President Temer will make such a statement in Xiamen, Brazil’s current internal state may require a debate over how continued membership to BRICS would help Brazil, if at all.
W. Alejandro Sanchez is an analyst that focuses on geopolitical and defense related affairs, with a focus on the Western Hemisphere. His analyses have appeared in numerous refereed journals including Small Wars and InsurgenciesDefence Studies,the Journal of Slavic Military Studies, European Security, Studies in Conflict and Terrorism and Perspectivas.