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 trends, 52.2% 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 Financiero, Mexico 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 asblueberries, quinoa 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 Insurgencies, Defence Studies,the Journal of Slavic Military Studies, European Security, Studies in Conflict and Terrorism and Perspectivas.

IPD: Moldova: Is Neutrality Still an Option?

"Moldova: Is Neutrality Still An Option?"

W. Alejandro Sanchez

International Policy Digest

15 August, 2017

Originally published: https://intpolicydigest.org/2017/08/15/moldova-neutrality-still-option/

In late May, the government of Moldova expelled five Russian diplomats, accusing them of espionage and for, according to aReuters report, “recruiting fighters for the Moscow-backed insurgency in neighboring Ukraine.” Since achieving independence in 1991 and following the 1992 war that created the separatist region of Transnistria, Chisinau has had a difficult time remaining neutral in the geopolitical game between the Russian Federation and the West. Given regional challenges, like the conflict in Ukraine and NATO expansion (Montenegro became its 29th member on 5 June), it is improbable that Chisinau can remain neutral for long.

A Confusing Home Front

Trying to understand Moldovan foreign policy today cannot be done without discussing the country’s troubling internal politics. Current President Igor Dodon is well known for his pro-Moscow attitude. In fact, he visited Moscow in March, where he denounced his government’s current pro-Europe stance, since “as a result, we have actually lost our traditional Russian markets and failed to obtain new ones.” Additionally, the breakaway region of Transnistria continues to have a Russian military presence (Russian troops carried out exercises in June), which Moscow labels as peacekeepers even though Chisinau has repeatedly demanded that they should withdraw. Finally, it is important to note that in the south of the country there is a small region known as Gagauzia. In 2014 the region held a referendum, which Chisinau labeled as unconstitutional, in which it rejected a proposed plan for Moldova to sign a trade agreement with the European Union (EU) and rather supported closer ties with the CIS Customs Union, a Russia-backed alliance.

On the other hand, recent prime ministers (the real policymakers, as presidents have a largely symbolic role) have generally maintained a pro-Europe/West stance, including current PM Pavel Filip. This situation is best exemplified by the 2014 EU-Moldova Association Agreement.

Complicating the situation are Moldova’s seemingly never-ending political crises which have resulted in a string of elections and a revolving door of coalition governments. The 2009 crisis in which President Vladimir Voronin resigned is an example of this situation. In 2015, protests erupted when it was revealed that an astounding $1.1 billion had disappeared from the three leading Moldovan banks.

Most recently, in late May members of the Liberal Party, Education Minister Corina Fusu, Deputy Education Ministers Cristina Boaghe and Elena Cernei, Environment Minister Valeriu Munteanu and deputy ministers Igor Talmazan and Victor Morgoci, offered their resignations, to protest the detention of Chisinau city mayor, Dorin Chirtoaca, and Transport and Roads Infrastructure Minister Iurie Chirinciuc by the National Anticorruption Centre.

Moldova’s unstable domestic politics will inevitably influence its foreign policy, as the country is approaching Europe but also has to address a separatist, pro-Moscow Transnistria and a potential problem in Gagauzia. According to reports, the Moldovan citizens who have travelled to Russia and from there to Ukraine on behalf of the rebels were from Gagauzia. In such a complex situation, formulating a long-term foreign policy is quite the challenge.

Moldova in Europe’s Great Game

In 2009, the author of this commentary published an essay in the Journal of Slavic Military Studies entitled “The ‘Frozen’ Southeast: How the Moldova-Transnistria Question has Become a European Geo-Security Issue.” Said article discussed how NATO’s and the EU’s eastwards expansion, which included accepting Romania as a member in 2004 and 2007 respectively, meant that Moldova and its internal problems were directed at the EU and NATO’s borders.

Fast forward almost a decade since that piece and now it is external events that are having an impact in Moldovan affairs, like the war in Ukraine, which resulted in the Gagauzian affair. Additionally, in May there were reports that Kiev was considering closing its border with Moldova as the separatist Transnistria borders Ukraine – what actually happened was that Kiev and Chisinau opened a border checkpoint in Transnistrian “territory,” a move that separatist authorities condemned. Even more, when Crimea was annexed by the Russian Federation in 2014, Transnistrian leaders requested that Moscow annex their region too. Moscow declined at the time.

At this point, it is important to keep in mind Article 11 of Moldova’s constitution, which states: “The Republic of Moldova proclaims its permanent neutrality,” and “The Republic of Moldova shall not allow the dispersal of foreign military troops on its territory.” Hence, the country cannot join military alliances like NATO. Nevertheless, pro-Western governments in Chisinau have tried to work around that issue by carrying out other defense initiatives. For example, Moldovan troops have participated in the Kosovo Force in 2014 and there are current plans to open a NATO civilian-staffed liaison office in Chisinau, a move that President Dodon has protested against.

This is the core of Moldova’s foreign policy woes as it tries to find a place in the West-Russia Great Game. If the government tries to approach the West, this move will be denounced by pro-Russian Moldovan politicians, including the President himself. Additionally, there is the concern regarding how will Transnistria, and even Gagauzia, respond if Chisinau attempts to seek even closer commercial links with the EU or security ties with NATO?

The recent incident in Gagauzia and Chisinau’s decision to expel five Russian diplomats (to which Moscow retaliated by expelling five Moldovan diplomats), brought bilateral relations to a new low. Nevertheless, it is necessary to stress that the two nations maintain close ties; for example Russian-Moldovan commerce is important, exemplified by a Russian 2014 ban of Moldovan produce (a retaliatory measure for approaching the EU), which hurt the landlocked nation’s economy. Additionally, many Moldovans migrate to Russia to work and send remittances to their families at home – Radio Free Liberty/Free Europe explains that “there are an estimated 500,000 Moldovans working in Russia.” Should bilateral relations become even more strained, Moscow could stop accepting Moldovan migrant workers, which would hurt the country’s economy even more. Moldova is likewise dependent on Russia for energy. RFL/FE reported in mid-July “98 percent is imported, most of it from Russia, and the imports are transported through the breakaway Moldovan region of Transdniester” and how “Moldova’s electricity usage, 70 percent is generated in Transdniester.”

Nevertheless, President Dodon’s statement that Moldova is suffering because it has lost access to the Russian market is an exaggeration. According to a 27 June article byMoldova.org, “since 2014, the European Union has become the main trading partner of Moldova. More than 63% of Moldovan exports are now directed to the EU and half of imports come from the EU. And there’s a positive trend in this. In the period January-April 2017, Moldova exported goods worth 430 million euros to the EU, 16% more than in the same period of 2016.”

Additionally, in early July the European Parliament approved a 100-million euro aid package for the landlocked nation, consisting of a loan of 60 million euros and a grant of 40 million euros. Such amounts, if adequately utilized, could continue to help Chisinau revitalize its economy.

As it stands, Moldova appears to be increasingly turning towards Europe for trade relations, but the country does remain dependent on both Russia and Transnistria.

The 2018 Elections

Could Moldova switch its foreign policy and approach Russia? This is theoretically possible. After all, the 2016 election of President Dodon is regarded as a protest vote by the population after several pro-West governments not only failed to improve the country’s economy but also failed to crack down on pressing problems like corruption. Certainly parts of the population, including most Gaugazians, if the 2014 referendum is to be believed, would prefer stronger Chisinau-Moscow ties, however, the succession of pro-West governments, the election of President Dodon notwithstanding, hints that most Moldovans would prefer closer relations with the EU and, probably, NATO as well.

Moldova is scheduled to have parliamentary elections in 2018. Current rumors, including interviews carried out by the author with experts on Moldova, suggest that the pro-Moscow Socialist party could emerge victorious, not necessarily because the majority of the general population looks with kinder eyes to Russia than to Europe, but rather as a sort of protest vote for mismanagement when it comes to domestic politics and the economy – e.g. the disappearance of USD 1.1 billion, which would unnerve anyone. (Political preferences among the Moldova electorate due to age differences is not the main focus of this analysis, however, experts stressed the importance of this issue to the author as the elections approach).

As a final point, it is important to mention a recent scandal involving “a network of nationalists, radicals, and neofascists across Eastern Europe,” led by Belarusian Alyaksandr Usovsky, with ties to Russian State Duma Deputy Konstantin Zatulin. The emerging narrative is that this network was trying to influence upcoming elections in Europe, which included working on a project apparently called “Moldova Is Not Romania.” Similarly protests have erupted over acontroversial electoral law that was passed in mid-July. It appears that both exterior agents as well as controversial decisions by domestic policymakers will influence the outcome of the 2018 elections in Moldova.

How Do You Formulate A Foreign Policy?

Attempting to suggest a foreign policy for a country like Moldova inevitably means addressing a plethora of issues that must be taken into account. This analysis has attempted to briefly describe the most important challenges, like the country’s pro-Moscow president against a pro-West prime minister and parliament, ongoing protests and scandals regarding corruption (including the missing USD$1.1 billion), also we must add breakaway Transnistria, a potential growing problem in Gagauzia as well as Moldova’s ongoing dependency on Russia for jobs and trade, and on Transnistria for energy.

Charting a foreign policy for, say, the next five years is no easy task – we will have to wait until the 2018 elections to see which political parties emerge victorious in order to have a better idea of how domestic politics will guide future foreign policy projects. With that said, the point here is that the country’s ongoing diplomatic stasis is not working. The 2014 trade agreement with the EU was a major diplomatic development, which prompted a Russian backlash. However, apart from that issue, and a potential NATO liaison office, there has been no major breakthrough or initiative out of Chisinau. Moreover, the Transnistria issue remains, for lack of a better term, ‘a frozen conflict.’

Nevertheless, even if Chisinau does not appear to have, in this author’s opinion, a diplomatic blueprint with clear objectives, the region around the country is changing and it will affect Moldovans one way or another. For example, the conflict in Ukraine will continue to have repercussions in Moldova, e.g. the Gagauzians or the 2014 Tranisnistrian request to join the Russian Federation or issues regarding the Moldovan-Ukrainian border. As a corollary to this article it is worth noting that an ongoing development was Romania’s decision to not allow a S7 commercial aircraft to cross Romanian airspace and land in Moldova because it was transporting Russia’s Deputy Prime Minister Dmitry Rogozin, who is under Western sanctions – the airplane had to land in Minsk, Belarus. Rumors abound about the incident, including whether Bucharest was “asked” to prevent Rogozin from landing in Chisinau so he could not meet with President Dodon.

There are certainly many Moldovans who would prefer their country to remain neutral when it comes to international affairs and alliances, but Moldova’s internal situation, its geographical location and the geopolitics in its neighborhood mean that neutrality is hardly an option anymore.

The author would like to thank Lucia Scripcari.

The views presented in this article are the author’s own and do not necessarily reflect those of any institutions with which the author is associated.