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Report reveals opportunities for Australian beef in Peru

28 October 2019

Peru’s growing demand for high quality beef combined with improved market access conditions for Australian product, presents an opportunity for Australia’s red meat industry to capitalise on a new export market in South America.

That’s according to a new report, The Peruvian beef market: Insights and prospects for Australia, produced by Meat & Livestock Australia (MLA) in partnership with the Australian Trade and Investment Commission (Austrade).

The report found Peru’s rapidly developing tourism industry, supported by a reputation for being a gastronomic tourist destination, has seen an increased demand for high quality food.

Demand has also been underpinned by strong economic growth and a large, increasingly affluent population.

Peru’s population of 32.6 million people (2018) is forecast to grow to 34.1 million by 2022, with per capita beef consumption forecast to grow from 6.5kg in 2018 to 6.8kg in 2022.

MLA Global Manager – Trade and Market Access, Andrew McCallum, said despite Peru’s proximity to neighbouring Brazil, a range of market insights coupled with improved market access for Australian beef were positive signals for potential exporters.

“Australia’s red meat market access to Peru has seen significant developments over the past 18 months, signalling a new chapter of economic and trade relations,” Mr McCallum said.

“Australia and Peru are both signatories to two recent agreements - the Comprehensive and Progressive Trans Pacific Partnership (CPTPP), and the Peru-Australia Free Trade Agreement (PAFTA) which further improves on the CPTPP outcome for Australian beef.

“While these trade agreements present the Australian beef industry with the opportunity to access a new export market via tariff elimination, Australia and Peru are yet to finalise protocol arrangements regarding health certification to facilitate Australian exports, with this process currently underway.”

Peruvian beef production is forecast (USDA) to total 205,000 tonnes carcase weight equivalent (cwe) in 2019, compared to an estimated consumption of 213,000 tonnes. As a result, beef imports will total 8,000 tonnes if the deficit is to be met.

“Peruvian beef production is expected to reach approximately 216,000 tonnes by 2023, with consumption also forecast to grow to 235,000, indicating a comparatively larger import

requirement of 19,000 tonnes,” Mr McCallum said.

“While beef imports currently represent only 2% of the total market, demand for imports is projected to increase as the supermarket and restaurant sectors continue to develop.

“Peru does not have a modern beef production system, and is unable to satisfy the growing demand for high quality beef. Peruvian beef is also perceived to be lower quality, compared to imported product.”

Mr McCallum said visible marbling is considered a favourable attribute by Peruvian beef consumers, and is more important to consumers than whether beef is grassfed or grainfed.

“Peruvians have a preference toward beef cuts suitable for barbecuing, such as striploin, rib-eye, rump cap and tri tip, while the most popular cut in home cooking is whole knuckle, cut into thin

steaks and also used as mince,” Mr McCallum.

“Offal is also popular in Peruvian cuisine, in particular heart, tripe and thin skirt. This is consistent with the high level of offal imports of around 25,700 tonnes in 2018 from countries such as the United States, Argentina and Brazil.”

Mr McCallum said in order to capitalise on potential opportunities for Australian beef in Peru, explaining and promoting Australia’s red meat integrity system and grading system, and how they differ from the US and Brazil, would be key.

“Australian beef has the potential to be positioned alongside US and Argentinian beef, supplying the top end of the market in both foodservice and retail.”

Australian Trade Commissioner to Peru, Natasha Monks, said that it has been insightful collaborating with MLA towards the preparation of the report and hopes the findings trigger interest for Australian exporters in pursuing future opportunities in Peru.

“The insights gathered for the production of the report were only possible after meeting with some of the most important players in this market,” Ms Monk said.

“We are very excited and optimistic about the prospects for Australian beef in Peru. We have been receiving ongoing expressions of interests from the Association of Importers of Refrigerated Products (ASIPAR) for expediting the process for the approval of the health protocols. We have engaged with ASIPAR´s members on many occasions and they expressed their interest in adding Australian beef to their range of products once the protocols are in place and PAFTA enters into force. Peruvian companies are aware of the high quality of our beef.

“Besides their genuine interest in expanding their range of premium beef products they are also interested in having alternatives in the event their current sources of supply may be closed due to animal health issues in the usual source countries.

“We are also considering the organisation of a Grass fed Beef of Australia tasting event once the protocols are in place to heighten the awareness amongst Peruvians of the quality of our beef and to generate further interest”, said Ms Monks.

Read the full report here.