March 4, 2004
 
 
Peru's Soybean Meal Imports Seen At 525,000 MT

Total fish catch for CY 2004 is forecast at 7.8 million metric tons, a significant increase from the 5.9 MMT in 2003. Fishmeal production for CY 2004 is forecast at 1.5 MMT a 27% increase compared to the previous year, still not at 2002 level. This significant increase is the result of a higher total catch. Warmer waters and the predominance of young fish caused a significant catch reduction in 2003.
 
The fishing industry is still struggling with the financial crisis originated by El Nino which drove most of the fish away from the Peruvian coast in 1997/1998; the world wide economic crisis that stopped most of the exports to Asia and caused prices to plummet. Though it has managed to reduce its debt somewhat, they still owe $1.2 billion.
 
Fish oil production is forecast at 210,000 MT in CY 2004, a slight 2.4% recovery from the previous year, the release said. Since there are many factors affecting fish oil production, including weather and feed availability for the fish, fish oil production may vary significantly from year to year. Fish oil exports for CY 2004 are forecast at 160,000.
 
Soybean meal imports are forecast at 525,000 MT for CY 2004, about 2% less than the previous year. With 287,532 MT, Paraguay continues to be the leading soybean meal exporter to Peru in 2003 followed by Argentina with 206,269 MT. The U.S. exported 6,348 MT.
 
Soybean oil imports are forecast at 225,000 MT in CY 2004. Peru implemented a safeguard for the Andean Community on Nations (CAN) member countries for soybean oil targeting Bolivian soy oil. Peru also implemented an antidumping measure against Argentine soy oil.
 
Soybean Meal
 
Outlook
 
Soybean meal imports are forecast at 525,000 MT for CY 2004, about 2% less than the previous year. Nevertheless, imports in the last three years have been higher than the average, which have historically been around 240,000 MT per year. Soybean imports are directly affected by fishmeal production and prices.
 
With a per capita consumption of about 24 kilograms per annum, chicken meat is a staple product in the Peruvian diet and the second cheapest source protein after fish. Peru's poultry population is about 320 million birds per year and the main user of soybean meal, which constitutes about 12% of the broiler's feed.
 
With 287,532 MT, Paraguay was the leading soybean meal exporter to Peru in 2003 followed by Argentina with 206,269 MT. The U.S. exported 6,348 MT. Despite the duty free agreement, Bolivia only exported 34,077 MT of soybean meal to Peru. Meal prices were around $342 from Paraguay, $321 from Argentina, both meals with 48% protein. Bolivian meal was around $328 but only 46 percent protein.
 
In 2001, Peru reduced import tariffs for soybean meal from 12%to 4%, thereby reducing the effects of tariff preferences agreements. Peru grants 100% reduction for Bolivian meal, 70% reduction for Paraguayan meal and 35% for Argentine meal. Besides the tariff, every product imported into Peru or locally produced is assessed 18% value-added tax.
 
The Government of Peru as not yet impeded imports of any agricultural products due to "Biotechnology" concerns, nor expressed any inclination to do so. Nevertheless the Congressional Agriculture Committee attempted to pass a ban for GMOs in 2002 and 2003.
 
The GOP has established a committee to regulate production and trade of genetically engineered products. So far there has not been any effect on commercial trade but the government has started to receive some questions from consumers' associations. Currently there is a congressional proposal to label GMO products, but it does not seem to have much support. Nevertheless, Post has met with several Congressmen and provided abundant information about GMOs, including trade and labeling issues, the release said.
 
Soybean Oil
 
Outlook
 
Soybean oil imports are forecast at 225,000 MT in CY 2004. Imports in CY 2003 were 221,000 MT. Soy oil consumption in CY 2003 was 228,000 MT, slightly lower than the 232,000 reached in CY 2002. Peru does not produce any soybeans, so there is no crushing for oil. The only crushing capacity is to produce full fat soy meal for feed. Crude soybean oil imports are assess 4% import duty and processed soy oil imports are assessed 12%. Peru has several bilateral trade agreements for crude soybean oil. Imports from Bolivia are duty free, while imports from Paraguay are granted 90% tariff reduction. Soybean oil from Argentina has 80% tariff reduction. Oil coming from any of these countries is not exempt from the 19% value-added tax.
 
In November 2003, Peru implemented a safeguard against the Andean Community on Nations (CAN) member countries for soybean oil. This measure is targeted at increasing the price of Bolivian soy oil, in order to protect the Peruvian oil refining industry. The safeguard eliminates the 100% tariff preference granted to Bolivia. Currently the safeguard is being evaluated by CAN committee, which will decide weather this measure is based on sound facts or not by March. If not, Peru will have to lift the safeguard. Peru also has implemented an antidumping measure against Argentine soy oil, this measure adds from 17% to 20% on an f.o.b. basis, depending on the exporting company, on top of the regular import duties.
 
 
Source: USDA