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Peru
Report Team Narrative

The global opportunity to serve higher year-round global blueberry consumption is exemplified by the recent strong performance of the world’s largest exporter of the fruit, Peru, which was an industry minnow just a decade ago when it wasn’t even in the top 30 blueberry-shipping nations worldwide, registering gross sales of less than $500,000 in 2012.

As referenced in the detailed Peruvian country member summary prepared by ProArandanos, the country’s fresh blueberry exports surpassed $1.2 billion in the 2021 calendar year. This figure encompasses Peru’s peak shipping window of late August to October, although shipments can start as early as late May/early June and finish in April of the subsequent calendar year. Export volume rose by more than 35% in the 2021-22 season, and returns held up remarkably well considering the influx of volume and unprecedented, pandemic-induced logistical delays that set back shipping arrival times from a matter of days to several weeks in Peru’s key overseas markets. In the U.S. for example, the average price for Peruvian blueberries was higher year-on-year for the first seven weeks of the season, while from late August until mid-January the fruit was selling for higher prices than market averages every week relative to other sources of supply. This speaks to the consistency that Peru has come to represent as a supplier to the global markets.

Most of the volume growth in 2021-22 occurred between August and October, reflecting a strategy to target periods of relative scarcity between the North American/European seasons and the Chilean campaign. It is a strategy that has been implemented through a combination of geographical diversification within Peru, varietal selection and pruning methods to manipulate harvest times. It is interesting to note the industry’s peak export volumes occurred three weeks earlier in 2021, and that the share of the nation’s two leading varieties – the ‘older’ cultivars Biloxi and Ventura – fell by eight percentage points to 60%, illustrating the rapid take-up of new varieties with improved durability, sizing, texture and flavor; a transition that has been accelerated by competitive pressures from South Africa, a producer that is known for its widespread adoption of proprietary genetics and positive quality perceptions in the European market. Anecdotally, Peruvian exporters have been increasingly selecting newer genetics with longer shelf life and greater firmness and brix for shipments to the more demanding Chinese market. As a side note, in mid-2022 the Peruvian industry achieved an opening of Israeli fresh blueberry market access.

Practically all the world’s leading blueberry genetics companies offering southern highbush (Low and No-Chill) blueberry varieties have a presence in Peru, with the number of registered varieties rising by 30% in 2021 to 60. Some are more incipient than others, including a local breeder that has been expanding, while at least one of Peru’s top grower-exporters has a blueberry breeding programme based in the country.

Chilean, Spanish, and U.S. horticultural experts played a pioneering role in the Peruvian blueberry industry’s development, just as they did previously in table grapes, successfully executing a transformative vision in what a decade ago was viewed as an unorthodox region for growing the soft fruit.

The opportunities of earlier production thus attracted more foreign entrepreneurs and investors who went with the tide rather than fighting against it, along with Peruvian agricultural companies that have since become industry leaders, some of whom have undertaken ventures north in the same expansive, pioneering fashion to produce blueberries in such countries as Colombia and Mexico.

Almost half of Peru’s blueberry plantings are in the department (province) of La Libertad, more often known for the city of Trujillo – a desert region whose agricultural sector was activated by the Chavimochic irrigation project in the late 90s with a boom in asparagus production, but since then blueberries have become a much more attractive investment.

More recently in 2014, the opening of the Olmos irrigation project in the department of Lambayeque heralded a new agricultural revolution in the Peruvian desert, prompting ambitious, large-scale projects in numerous crops including blueberries. Today the region accounts for more than a fifth of Peru’s blueberry hectares in production, offering a a more natural ability to produce in an earlier window than La Libertad.

La Libertad’s share of blueberry-growing hectares has declined from 93% in 2016 to 49% in 2021, as part of a geographical diversification trend that has reinforced the country’s push towards extended production and its ability to grow more during particular market windows. Combined, the southern region of Ica, the region of Lima encapsulating the nation’s capital and its surrounds, and the northern region of Piura bordering Ecuador, account for almost a quarter of Peru’s surface area for the crop.

Broadly speaking, coastal Peru has a mild climate with very little variance in temperature; the same is true for the northerly, early-producing Piura, but within a higher temperature band. In atypical years however when temperatures are slightly higher in the summer, as was the case for the 2021-22 season, certain varieties tend to be triggered into plant growth with delays in flowering and hence, fruiting. This underscores how critical varietal selection can be in the warmest of climates; cultivars that can tolerate or adapt in such conditions do exist and are increasingly being planted in the area.

The number of hectares planted in Piura more than tripled in 2021, with growers attracted by the region’s adaptive soils, water chemistry and, most importantly, earlier harvests that tend to garner higher market returns. The Piura season begins in May and peaks in late September-early October, unlike Peru overall which peaks in mid-October. The humid and muggy conditions can create new challenges, making it essential to pick fruit as close to dawn and dusk as possible.

The department of Ica, which like La Libertad has been a bastion of first asparagus and then avocado industries, saw its blueberry-growing area rise by almost 60% last year. High-density plantings in substrate pots are less common in Peru where most coastal production is open field, but the very salty soils in Ica warrant alternative growing methods that are more in line with what can be seen in southern Morocco or Mexico. Many of these projects harness reverse osmosis units to address water chemistry for irrigation, which is especially critical for achieving optimal pH levels and electric conductivity in substrate growing systems.

The percentage share of organics rose by three percentage points to 8% in 2021 as the industry pursues what is perceived as an attractive proposition in the North American market, with many growers reporting healthy premiums despite marginal falls year-on-year. In the larger context of the Peruvian industry, the 8% share represents a significant increase in the offering versus prior years and is the product of decisions made several years ago given the lag time in converting conventional fields to organic and securing certification. It is important to note that growing organic in Peru is uniquely challenging due to the lack of a ‘kill cycle’ for pests and disease as well as the challenge for securing inputs to manage in evergreen systems. Organic fields in Peru tend to have lower average yields than conventional fields in Peru, which is not always the case in other competitive organic growing regions.

Growers throughout Peru became more reluctant to plant new fields since the election of President Pedro Castillo last year. At the time of writing, the administration has not enacted any policies that specifically damage agriculture, but rather the tone towards business and agriculture have led to uncertainty. Blueberry planting has recently been revived in Peru, which has among the highest yields for the fruit globally, but it is believed that the speed of new plantings would have been much faster had Castillo’s opponent won. The political climate also has implications for infrastructure developments and upgrades that have been idle for years, and are likely to remain so in the current environment, including irrigation development plans such as the Chavimochic expansion and the Majes Siguas project near Arequipa. These delays in infrastructure will likely impact the capacity for the industry to expand in high value horticultural crops in the medium term. Nonetheless, the data shows almost 20% of Peru’s planted hectares for blueberries are not yet in production; fields of new varieties are still maturing and the impact of that, ceteris paribus, will be continued volume growth over the medium term.

Peruvian growers emphasize that the political uncertainty is not just limited to them but is an issue of concern throughout South America, as is the consensus that logistics delays and costliness are the most pressing problems facing the industry right now. These conditions have forced operators to be more flexible in how they react to changing shipping schedules and port conditions, while also diversifying their shipping options. Most of Peru’s 2021-22 volume had been shipped by the commencement of Russia’s invasion of Ukraine in February this year, but the fertilizer shortages that ensued have also been an issue for Peruvian agriculture generally, including blueberry farming.

The availability of labor is also a challenge in Peru amidst competition between several agricultural crops, with many farms in isolated desert areas that either require transportation or the establishment of lodgings. Protests in late 2020 led to changes to the Law of Agrarian Promotion which imposes a higher minimum living wage and requires a special bonus paid to workers that is equivalent to 30% of the minimum wage. Many Peruvian blueberry growers, however, were unaffected by these changes as their worker remuneration policies and benefits around food and transport already went beyond the minimum requirements established in the new law.