“Peru’s political crisis reveals ungovernable country,” states a headline in the French newspaper Le Monde. Peru’s political crisis reveals ungovernable country (lemonde.fr)
The news out of the Latin American nation is perplexing. In December, Peru’s president Pedro Castillo was ousted after an attempt to dissolve the nation’s Congress in order to prevent his own impeachment.
His vice president and successor, Dina Boluarte, has not succeeded in stemming popular unrest in support of Castillo. Protests have left 48 people dead since Castillo was removed from office. https://apnews.com/article/politics-peru-government-protests-and-demonstrations-pedro-castillo-dc226f9881eb3fa77bd2479fdc1d93dd
How do these disruptions affect the nation’s burgeoning produce industry?
Peruvian agroexports increased 17.6 percent year over year in October 2022, with blueberries the most valuable crop, valued at $1.1 billion. Peruvian agroexports increased 17.6% – Produce Blue Book
But of course, that was before the unrest started.
In any event, this cheery statistic belies underlying problems with Peruvian agriculture, notes Blue Book analyst Marco Campos. Mandarin production, for example, is forecast to drop slightly from the previous year. Causes include “labor cost increases, fertilizer scarcity, increased transportation costs, and container shortages.”
In July, news sources reported that half of the Peruvian asparagus crop was threatened by a fertilizer shortage. La amenaza para la palta hass ante la falta de fertilizante | economía | ECONOMIA | GESTIÓN (gestion.pe)
Political unrest was one cause of a brief disruption in Peruvian asparagus supplies around Christmas.
Peru’s agricultural sector is losing some $100 million a day as a result of political unrest, says Luis Fernando Helguero, the nation’s minister of foreign trade and tourism.
“As a result, asparagus, grapes, and berries are all vulnerable to the logistic delays that will likely resume if the protests continue,” writes Mark Campbell, cofounder of ProduceIQ. ProduceIQ: Violence disrupts Mexican produce exports – Produce Blue Book
On another front, disruptions in Mexico as a result of the pursuit and capture of Sinaloa Cartel leader Ovidio Guzman, have impeded shipments of strawberries and bell peppers.
Many of these disruptions are temporary, but cumulatively they are disturbing. Only time will tell if Peru has become “ungovernable.” Mexico has bristled at (admittedly overstated) accusations that it is a “failed state,” but at the same time, there are many areas that the central government does not control as a result of cartel activity.
To some extent, we can see the opposite in Colombia. Its longstanding wars between the government and the nation’s drug cartels have wound down, making the nation an improving prospect for avocado exports.
These facts suggest that political stability may be an increasing factor in Latin American produce supplies.
Or perhaps that statement is wrong—political stability is always a major factor in trade. It’s just that the disturbances uncomfortably remind us of this fact.
