International Egg and Poultry Review: US & Peru

US & PERU - This is a weekly report by the USDA's Agricultural Marketing Service (AMS), looking at international developments concerning the poultry industry. This week's review looks at the US–Peru Trade Promotion Agreement.

14 September 2011

3 minute read

The US–Peru Trade Promotion Agreement (PTPA) has been in effect since February 2009. Under the TPA, the US secured a 12,000-ton TRQ (Tariff Rate Quota) at zero duty with eight per cent annual compound growth for chicken leg quarters. The 25 per cent above-quota-tariff will be phased out after an eight-year grace period and will be completely eliminated in 17 years. Peru will have access to safeguards on chicken leg quarters in the event of import surges during the 17-year tariff phrase-out period. Phase out tariffs on other poultry products range from two to 10 years.

US poultry meat exports to Peru reached 5,326 metric tons (MT) valued at $5.5 million in 2010. US chicken leg quarter (CLQ) exports totalled 2,343MT, up 439 per cent from 2009. The US now has a 26 per cent market share for CLQ. Frozen chicken meat exports reached 2,157MT in 2010, up 403 per cent from the previous year.

The increase in CLQ exports is due to the Tariff Rate Quota (TRQ), which allows a certain quantity of CLQs into Peru duty-free. CLQs are subject to a six per cent import tax when entering Peru. Under PTPA, US exports of CLQs were granted duty-free access for the first 12,960MT in year two. Until the PTPA, Peru imported the majority of CLQ from Chile due to Chile's more competitive prices. Frozen chicken meat is subject to a six per cent import tax; duties will be removed in five linear steps.

Retail

Peru's total food retail sales in 2009 reached more than $11 billion. The implementation of the US–Peru Trade Promotion Agreement created opportunities to expand exports of poultry meats and their products into retail markets. In 2009, net imports of poultry meat to the three food sectors (food service, retail and food processing) totalled 17,852 tons valued at $21.57 million. Chile accounted for 31 per cent of Peru's imports; Brazil, 23 per cent; Italy, 20 per cent; Argentina, 12 per cent; US, 10 per cent and Bolivia, five per cent. Imports are mainly chicken and turkey parts.