Required Report - public distribution

**Date:** 2/23/2005

**GAIN Report Number:** PE5003

PE5003

**Peru**

**Oilseeds and Products**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Melinda D. Sallyards

U.S. Embassy

**Prepared by:**

Gaspar E. Nolte

**Report Highlights:**

Fishmeal production in CY 2005 is estimated at 1.89 MMT, a slight
decrease caused by a reduction in total catch. Soybean meal imports are
estimated at 625,000 MT in CY 2005, this eight percent increase is the
result of a growing poultry industry and high fishmeal prices.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Lima \[PE1\]

\[PE\]

**Executive Summary**

Fishmeal production for CY 2005 is forecast at 1.89 Million Metric Tons
(MMT), a slight decrease caused by a reduction in total catch which is
estimated at 8.5 MMT, almost a ten percent fall from the 9.32 MMT in
2004. This catch reduction is forecasted based on the Peruvian fishing
regulation that establishes a total fishing quota. Consumption for CY
2005 is forecast at about 60,000 MT. Fishmeal exports for CY 2005 are
forecast at 1.85 MMT, China continues to be the major Peruvian fishmeal
importer. Total fisheries exports were \$1.4 billion in CY 2004, a 35
percent increase compared to the previous year. Fishmeal exports in CY
2004 were \$974 million, almost 32 percent more than the previous year.

The GOP continues to enforce several measures to assure the
sustainability of the biomass, including two fishing seasons during each
year. Other measures include a fishing quota, measurement of the fish
size, establishment of a protected area, banning the use jack mackarel
or horse mackarel for fishmeal, limiting processing capacity of plants
and the fishing capacity of fleets.

Fish oil production for CY 2005 is forecast at 280,000 MT, an 18 percent
reduction compared to the previous year due to lower fish catch and
lower fat content in the fish. Exports for CY 2005 are forecast at
225,000 MT.

Soybean meal imports are forecast at 625,000 MT for CY 2005, about eight
percent more than the previous year. Increasing demand from the poultry
sector and high prices of fishmeal will drive this higher demand. Total
soybean imports in CY 2004 were 581,117 MT, Paraguay was the leading
soybean meal exporter to Peru in 2004 with 247,944 MT.

Soybean oil imports are forecast at 250,000 MT in CY 2005. Imports in CY
2004 were 230,000 MT. Soy oil consumption in CY 2004 was 249,000 MT,
nine percent higher than in CY 2003.

+---------------+-------+-------+-------+-------+------+-------+------+
| ###           |       |       |       |       |      |       |      |
| ### PSD Table |       |       |       |       |      |       |      |
+---------------+-------+-------+-------+-------+------+-------+------+
| **Country**   | **P   |       |       |       |      |       |      |
|               | eru** |       |       |       |      |       |      |
+---------------+-------+-------+-------+-------+------+-------+------+
| **Commodity** | **    |       |       |       | (    |       |      |
|               | Meal, |       |       |       | 1000 |       |      |
|               | F     |       |       |       | MT)( |       |      |
|               | ish** |       |       |       | PERC |       |      |
|               |       |       |       |       | ENT) |       |      |
+---------------+-------+-------+-------+-------+------+-------+------+
|               | 2003  | Re    | 2004  | Est   | 2005 | For   | UOM  |
|               |       | vised |       | imate |      | ecast |      |
+---------------+-------+-------+-------+-------+------+-------+------+
|               | USDA  | Post  | USDA  | Post  | USDA | Post  |      |
|               | Off   | Est   | Off   | Est   | Offi | Est   |      |
|               | icial | imate | icial | imate | cial | imate |      |
|               | \[    | \[    | \[    | \[    | \[O  | \[    |      |
|               | Old\] | New\] | Old\] | New\] | ld\] | New\] |      |
+---------------+-------+-------+-------+-------+------+-------+------+
| # Mark        |       | 01    |       | 01    |      | 01    | MM/  |
| et Year Begin |       | /2004 |       | /2005 |      | /2006 | YYYY |
+---------------+-------+-------+-------+-------+------+-------+------+
| Catch For     | 7525  | 9320  | 6575  | 8500  | 0    | 8500  | (    |
| Reduction     |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Extr. Rate,   | 0.22  | 0.20  | 0.22  | 0.22  | 0    | 0.22  | (    |
| 999.9999      | 39202 | 68669 | 35741 | 23529 |      | 23529 | PERC |
|               |       |       |       |       |      |       | ENT) |
+---------------+-------+-------+-------+-------+------+-------+------+
| Beginning     | 5     | 228   | 25    | 318   | 25   | 298   | (    |
| Stocks        |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Production    | 1685  | 1928  | 1470  | 1890  | 0    | 1890  | (    |
|               |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| MY Imports    | 0     | 0     | 0     | 0     | 0    | 0     | (    |
|               |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| MY Imp. from  | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| U.S.          |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| MY Imp. from  | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| the EC        |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| TOTAL SUPPLY  | 1690  | 2156  | 1495  | 2208  | 25   | 2188  | (    |
|               |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| MY Exports    | 1625  | 1778  | 1420  | 1850  | 0    | 1850  | (    |
|               |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| MY Exp. to    | 500   | 210   | 600   | 500   | 0    | 500   | (    |
| the EC        |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Industrial    | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| Dom. Consum   |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Food Use Dom. | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| Consump.      |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Feed Waste    | 40    | 60    | 50    | 60    | 0    | 60    | (    |
| Dom. Consum   |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| TOTAL Dom.    | 40    | 60    | 50    | 60    | 0    | 60    | (    |
| Consumption   |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Ending Stocks | 25    | 318   | 25    | 298   | 0    | 278   | (    |
|               |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| TOTAL         | 1690  | 2156  | 1495  | 2208  | 0    | 2188  | (    |
| DISTRIBUTION  |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Calendar Year | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| Imports       |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Calendar Yr   | 0     | 0     | 0     | 0     | 0    | 0     | (    |
| Imp. U.S.     |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Calendar Year | 1220  | 1778  | 1315  | 1850  | 0    | 1850  | (    |
| Exports       |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+
| Calndr Yr     | 0     | 43    | 0     | 20    | 0    | 20    | (    |
| Exp. to U.S.  |       |       |       |       |      |       | 1000 |
|               |       |       |       |       |      |       | MT)  |
+---------------+-------+-------+-------+-------+------+-------+------+

  -------------------------------------- --------------------------------
  **Export Trade Matrix**                

  **Country**                            Peru

  **Commodity**                          Meal, Fish

  Time Period                            CY 2004

  Exports for:                           

  U.S.                                   42,690

  Others                                 

  China                                  809,630

  Japan                                  196,008

  Germany                                143,318

  Taiwan                                 82,459

  Canada                                 50,382

  Turky                                  48,411

  Spain                                  38,170

                                         

  Total for Others                       1,368,378

  Others not Listed                      367,400

  Grand Total                            1,778,468
  -------------------------------------- --------------------------------

Units: Metric Tons

**Fishmeal**

**Production**

Total fish catch for Calendar Year 2005 is forecast at 8.5 Million
Metric Tons, al most a ten percent fall from the 9.32 MMT in 2004. This
reduction is forecasted based on the Peruvian fishing regulation that
establishes a total fishing quota. Fishmeal production for CY 2005 is
forecast at 1.89 MMT a slight decrease caused by a reduction in total
catch.

There are basically two kinds of fishmeal. Fair Average Quality (FAQ),
with a protein content between 62 and 65 percent, is dried by direct
fire. The other kind of fismeal is prime, indirectly dried by steam and
with a protein content of 66-67 percent. Fishmeal prices range from
\$480 per MT for FAQ fishmeal to \$600 per MT for prime fishmeal.

![](media/image2.wmf)

The Peruvian fishing industry is still suffering from the negative
effects of the 1997/1998 El Niño weather phenomenon which drove the fish
away from the Peruvian coasts and halted all industrial fishing activity
for 18 months. In addition, the strong devaluation of Asian currencies
in 1999, main markets for Peruvian fishmeal, brought a sound industry
almost to bankruptcy. Currently, the total industry debt is estimated at
\$1.3 billion, of which about \$150 million are paid annually. The three
largest companies account for about 25 percent of the debt.

Of the 110 fishmeal plants along the Peruvian coast, only 90 are
currently working. The Peruvian fishing fleet is comprised of 984 boats,
684 steel boats with storage capacity over 500 cubic meters and 300
wooden boats with storage capacity of 110 cubic meters. Total processing
capacity is 7,500 MT per hour, about four times more than they are allow
to catch.

Most of the fishing plants have invested significant amounts on better
and more efficient equipment. Processing plants are now forced to comply
with some environmental regulations. Therefore most of them are now
investing in "tail-water" discharge recovery systems, and even airborne
particle recovery systems, both of which translate into higher
extraction rates (and profits). Plants are also forced to pump residual
water at least 13 kilometers and 50 meters deep. Larger producers are
also investing in canning or freezing lines, to convert more of the
catch to higher valued products for human consumption, a trend expected
to continue.

Public awareness and international concern for environment problems
caused by the fishmeal industry continue are likely to increase in
coming years, which could translate into increased regulations.

Consumption

Local fishmeal consumption only accounts for three to five percent of
total production and does not have a great impact on the export market.
Consumption for CY 2005 is forecast at about 60,000 MT. Local
consumption is expected to increase somewhat in the upcoming years due
to an increase demand from the aquaculture industry, but it will still
not have a significant impact on fishmeal exports or price.

Trade

Fishmeal exports for CY 2005 are forecast at 1.85 MMT. With 809,630 MT,
China continues to be the major Peruvian fishmeal importer followed by
Japan (196,008 MT), Germany (143,318 MT) and Taiwan (82,459 MT).

Total fisheries exports were \$1.4 billion in CY 2004, a 35 percent
increase compared to the previous year. Fishmeal exports in CY 2004 were
\$974 million, almost 32 percent more than the previous year. What
Peruvians call direct consumption products, as opposed to indirect
consumption vis a vis fishmeal, are expected to increase significantly
in the upcoming years. Canned fish exports were \$50 million in CY 2004,
an 11 percent increase compared to CY 2003. The principal markets for
this product was Spain. Frozen fish exports were \$203 million in CY
2004, a 42 percent increase compared to the previous year.

![](media/image3.wmf)

Policy

The GOP continues to enforce several measures to assure the
sustainability of the biomass. These measures include two fishing
seasons during each year. These seasonal fishing bans are implemented
during the anchovy spawning seasons and may vary somewhat from year to
year. Usually the bans are enforced from January to mid March and from
August to mid October. Other measures are fishing quota, which is
usually around 8 MMT, measurement of the fish size, the GOP does not
allow fishing if the size of the fish is less than 12 centimeters, size
of the fishing net, big enough to allow small fish through,
establishment of a protected area, five miles from shore, in which no
industrial fishing is allowed. The GOP has also prohibited to use jack
mackarel or horse mackarel for fishmeal, only anchovy is allowed for
industrial processing with a maximum of 11 percent of incidental fishing
(species other than anchovy).

The Government is concerned about the sustainable limits of fish
catches, and sets limits for the processing capacity of plants and the
fishing capacity of fleets. Every processing plant and fishing vessel
must apply for an operating permit, and receive a quota, from the
Ministry of Fisheries, before it can begin operations each season.
Moreover, the government is no longer issuing permits to build neither
new plants nor boats. The only venue to acquire a fishing boat is to buy
one that already has a fishing permit. Some boat owners are being forced
to sell their boats due to the deep financial crisis.

The GOP enforces these measures through satellite screening and
inspection. SGS has just been awarded a \$7 million contract to inspect
150 unloading points along the coast during the fishing seasons.

+---------------+-------+-------+------+-------+------+-------+------+
| **PSD Table** |       |       |      |       |      |       |      |
+---------------+-------+-------+------+-------+------+-------+------+
| **Country**   | **P   |       |      |       |      |       |      |
|               | eru** |       |      |       |      |       |      |
+---------------+-------+-------+------+-------+------+-------+------+
| **Commodity** | *     |       |      |       | (    |       |      |
|               | *Oil, |       |      |       | 1000 |       |      |
|               | F     |       |      |       | MT)( |       |      |
|               | ish** |       |      |       | PERC |       |      |
|               |       |       |      |       | ENT) |       |      |
+---------------+-------+-------+------+-------+------+-------+------+
|               | 2003  | Re    | 2004 | Est   | 2005 | For   | UOM  |
|               |       | vised |      | imate |      | ecast |      |
+---------------+-------+-------+------+-------+------+-------+------+
|               | USDA  | Post  | USDA | Post  | USDA | Post  |      |
|               | Off   | Est   | Offi | Est   | Offi | Est   |      |
|               | icial | imate | cial | imate | cial | imate |      |
|               | \[    | \[    | \[O  | \[    | \[O  | \[    |      |
|               | Old\] | New\] | ld\] | New\] | ld\] | New\] |      |
+---------------+-------+-------+------+-------+------+-------+------+
| # Mark        |       | 01    |      | 01    |      | 01    | MM/  |
| et Year Begin |       | /2004 |      | /2005 |      | /2006 | YYYY |
+---------------+-------+-------+------+-------+------+-------+------+
| Catch For     | 7525  | 9320  | 6575 | 8500  | 0    | 8500  | (    |
| Reduction     |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Extr. Rate,   | 0     | 0.03  | 0    | 0.03  | 0    | 0.03  | (    |
| 999.9999      |       | 68025 |      | 29411 |      | 29411 | PERC |
|               |       |       |      |       |      |       | ENT) |
+---------------+-------+-------+------+-------+------+-------+------+
| Beginning     | 0     | 2     | 0    | 3     | 0    | 2     | (    |
| Stocks        |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Production    | 0     | 343   | 0    | 280   | 0    | 280   | (    |
|               |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| MY Imports    | 0     | 0     | 0    | 0     | 0    | 0     | (    |
|               |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| MY Imp. from  | 0     | 0     | 0    | 0     | 0    | 0     | (    |
| U.S.          |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| MY Imp. from  | 0     | 0     | 0    | 0     | 0    | 0     | (    |
| the EC        |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| TOTAL SUPPLY  | 0     | 345   | 0    | 283   | 0    | 282   | (    |
|               |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| MY Exports    | 0     | 270   | 0    | 225   | 0    | 225   | (    |
|               |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| MY Exp. to    | 0     | 137   | 0    | 130   | 0    | 130   | (    |
| the EC        |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Industrial    | 0     | 5     | 0    | 5     | 0    | 5     | (    |
| Dom. Consum   |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Food Use Dom. | 0     | 15    | 0    | 11    | 0    | 10    | (    |
| Consump.      |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Feed Waste    | 0     | 52    | 0    | 40    | 0    | 40    | (    |
| Dom. Consum   |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| TOTAL Dom.    | 0     | 72    | 0    | 56    | 0    | 55    | (    |
| Consumption   |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Ending Stocks | 0     | 3     | 0    | 2     | 0    | 2     | (    |
|               |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| TOTAL         | 0     | 345   | 0    | 283   | 0    | 282   | (    |
| DISTRIBUTION  |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Calendar Year | 0     | 0     | 0    | 0     | 0    | 0     | (    |
| Imports       |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Calendar Yr   | 0     | 0     | 0    | 0     | 0    | 0     | (    |
| Imp. U.S.     |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Calendar Year | 0     | 270   | 0    | 225   | 0    | 225   | (    |
| Exports       |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+
| Calndr Yr     | 0     | 0     | 0    | 0     | 0    | 0     | (    |
| Exp. to U.S.  |       |       |      |       |      |       | 1000 |
|               |       |       |      |       |      |       | MT)  |
+---------------+-------+-------+------+-------+------+-------+------+

  -------------------------------- --------------------------------------
  **Export Trade Matrix**          

  **Country**                      Peru

  **Commodity**                    Oil, Fish

  Time Period                      CY 2004

  Exports for:                     

  U.S.                             0

  Others                           

  Chile                            85,003

  Belgium                          50,723

  Norway                           33,568

  Canada                           26,038

  Denmark                          23,411

  Netherlands                      22,080

                                   

  Total for Others                 240,823

  Others not Listed                29,300

  Grand Total                      270,123
  -------------------------------- --------------------------------------

Unit: Metric Tons

**Fish Oil**

**Outlook**

Fish oil production for CY 2005 is forecast at 280,000 MT, an 18 percent
reduction compared to the previous year due to lower fish catch and
lower fat content in the fish. Oil extraction is directly related to
water temperatures. Under normal weather conditions the oil extraction
rate should be around 8 to 10 percent, but it drop as low as one
percent.

Exports for CY 2005 are forecast at 225,000 MT. Oil production and
exports are difficult to forecast due to the high variability in fish
oil content and the lack of official statistics. Chile, Belgium and
Norway were the most important importers of Peru's fish oil with 31
percent, 19 percent and 13 percent of the total exports respectively.

Consumption in CY 2005 is forecast at 56,000 MT, 22 percent lower than
CY 2004. This decrease in local consumption is the result of an
increasing fish oil demand in other countries, especially Chile, for
their salmon industry. Post foresees this trend continuing in the
upcoming years.

+----------------+------+------+------+------+------+------+------+
| ###            |      |      |      |      |      |      |      |
| #### PSD Table |      |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
| **Country**    | **Pe |      |      |      |      |      |      |
|                | ru** |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
| **Commodity**  | **M  |      |      |      | (    |      |      |
|                | eal, |      |      |      | 1000 |      |      |
|                | S    |      |      |      | MT)( |      |      |
|                | oybe |      |      |      | PERC |      |      |
|                | an** |      |      |      | ENT) |      |      |
+----------------+------+------+------+------+------+------+------+
|                | 2003 | Rev  | 2004 | Esti | 2005 | Fore | UOM  |
|                |      | ised |      | mate |      | cast |      |
+----------------+------+------+------+------+------+------+------+
|                | USDA | Post | USDA | Post | USDA | Post |      |
|                | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                | cial | mate | cial | mate | cial | mate |      |
|                | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |      |
|                | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |      |
+----------------+------+------+------+------+------+------+------+
| **Market Year  |      | 01/  |      | 01/  |      | 01/  | MM/  |
| Begin**        |      | 2004 |      | 2005 |      | 2006 | YYYY |
+----------------+------+------+------+------+------+------+------+
| Crush          | 2    | 0    | 2    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Extr. Rate,    | 0.5  | 0    | 0.5  | 0    | 0    | 0    | (    |
| 999.9999       |      |      |      |      |      |      | PERC |
|                |      |      |      |      |      |      | ENT) |
+----------------+------+------+------+------+------+------+------+
| Beginning      | 9    | 20   | 10   | 22   | 10   | 25   | (    |
| Stocks         |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Production     | 1    | 0    | 1    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imports     | 600  | 581  | 624  | 625  | 0    | 630  | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imp. from   | 50   | 48   | 50   | 50   | 0    | 80   | (    |
| U.S.           |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imp. from   | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| the EC         |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL SUPPLY   | 610  | 601  | 635  | 647  | 10   | 655  | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Exports     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Exp. to the | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC             |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Industrial     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Dom. Consum    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Food Use Dom.  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Consump.       |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Feed Waste     | 600  | 579  | 625  | 622  | 0    | 635  | (    |
| Dom. Consum    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL Dom.     | 600  | 579  | 625  | 622  | 0    | 635  | (    |
| Consumption    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Ending Stocks  | 10   | 22   | 10   | 25   | 0    | 20   | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL          | 610  | 601  | 635  | 647  | 0    | 655  | (    |
| DISTRIBUTION   |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Year  | 0    | 581  | 0    | 625  | 0    | 630  | (    |
| Imports        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Yr    | 0    | 48   | 0    | 50   | 0    | 80   | (    |
| Imp. U.S.      |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Year  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Exports        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calndr Yr Exp. | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| to U.S.        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+

  ------------------------------------- ---------------------------------
  **Import Trade Matrix**               

  **Country**                           Peru

  **Commodity**                         Meal, Soybean

  Time Period                           CY 2004

  Imports for:                          

  U.S.                                  47,991

  Others                                

  Paraguay                              247,944

  Bolivia                               148,655

  Argentina                             136,527

                                        

  Total for Others                      533,126

  Others not Listed                     \-

  Grand Total                           581,117
  ------------------------------------- ---------------------------------

Unit: Metric Tons

**Soybean meal**

**Outlook**

Soybean meal imports are forecast at 625,000 MT for CY 2005, about eight
percent more than the previous year. Increasing demand from the poultry
sector and high prices of fishmeal will drive this higher demand.
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 percent of the broiler's feed. Poultry production
is expected to grow about three percent in CY 2005.

Total soybean imports in CY 2004 were 581,117 MT. With 247,944 MT,
Paraguay was the leading soybean meal exporter to Peru in 2004 followed
by Bolivia with 148,655 MT and Argentina with 136,269 MT. The U.S.
exported 47, 991 MT, a significant increase compared to the 6,348 MT
exported in CY 2003. Meal prices from Paraguay and Bolivia were around
\$250 compared to about \$270 from the U.S.

In 2001, Peru reduced import tariffs for soybean meal from 12 to 4
percent, thereby reducing the effects of tariff preferences agreements.
Peru grants 100 percent reduction for Bolivian meal, 70 percent
reduction for Paraguayan meal and 35 percent for Argentine meal. Besides
the tariff, every product imported into Peru or locally produced is
assessed 18 percent 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 there have been several congressional initiatives
to pass a ban for GMOs. 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.

+----------------+------+------+------+------+------+------+------+
| ###            |      |      |      |      |      |      |      |
| #### PSD Table |      |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
| **Country**    | **Pe |      |      |      |      |      |      |
|                | ru** |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
| **Commodity**  | **   |      |      |      | (    |      |      |
|                | Oil, |      |      |      | 1000 |      |      |
|                | S    |      |      |      | MT)( |      |      |
|                | oybe |      |      |      | PERC |      |      |
|                | an** |      |      |      | ENT) |      |      |
+----------------+------+------+------+------+------+------+------+
|                | 2003 | Rev  | 2004 | Esti | 2005 | Fore | UOM  |
|                |      | ised |      | mate |      | cast |      |
+----------------+------+------+------+------+------+------+------+
|                | USDA | Post | USDA | Post | USDA | Post |      |
|                | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                | cial | mate | cial | mate | cial | mate |      |
|                | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |      |
|                | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |      |
+----------------+------+------+------+------+------+------+------+
| **Market Year  |      | 01/  |      | 01/  |      | 01/  | MM/  |
| Begin**        |      | 2004 |      | 2005 |      | 2006 | YYYY |
+----------------+------+------+------+------+------+------+------+
| Crush          | 2    | 0    | 2    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Extr. Rate,    | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| 999.9999       |      |      |      |      |      |      | PERC |
|                |      |      |      |      |      |      | ENT) |
+----------------+------+------+------+------+------+------+------+
| Beginning      | 20   | 15   | 10   | 17   | 10   | 18   | (    |
| Stocks         |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Production     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imports     | 231  | 230  | 265  | 250  | 0    | 260  | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imp. from   | 40   | 29   | 40   | 30   | 0    | 35   | (    |
| U.S.           |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Imp. from   | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| the EC         |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL SUPPLY   | 251  | 245  | 275  | 267  | 10   | 278  | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Exports     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| MY Exp. to the | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC             |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Industrial     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Dom. Consum    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Food Use Dom.  | 241  | 228  | 265  | 249  | 0    | 259  | (    |
| Consump.       |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Feed Waste     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Dom. Consum    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL Dom.     | 241  | 228  | 265  | 249  | 0    | 259  | (    |
| Consumption    |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Ending Stocks  | 10   | 17   | 10   | 18   | 0    | 19   | (    |
|                |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| TOTAL          | 251  | 245  | 275  | 267  | 0    | 278  | (    |
| DISTRIBUTION   |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Year  | 0    | 231  | 0    | 225  | 0    | 0    | (    |
| Imports        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Yr    | 0    | 29   | 0    | 25   | 0    | 0    | (    |
| Imp. U.S.      |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calendar Year  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Exports        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+
| Calndr Yr Exp. | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| to U.S.        |      |      |      |      |      |      | 1000 |
|                |      |      |      |      |      |      | MT)  |
+----------------+------+------+------+------+------+------+------+

  ------------------------------------ ----------------------------------
  **Import Trade Matrix**              

  **Country**                          Peru

  **Commodity**                        Oil, Soybean

  Time Period                          CY 2004

  Imports for:                         

  U.S.                                 29,276

  Others                               

  Argentina                            167,818

  Bolivia                              12,750

  Paraguay                             11,914

  Brazil                               8,641

                                       

  Total for Others                     201,123

  Others not Listed                    

  Grand Total                          230,399
  ------------------------------------ ----------------------------------

Units: Metric Tons

**Soybean oil**

**Outlook**

Soybean oil imports are forecast at 250,000 MT in CY 2005. Imports in CY
2004 were 230,000 MT. Soy oil consumption in CY 2004 was 249,000 MT,
nine percent higher than in CY 2003. 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 assessed four percent import duty and
processed soy oil imports are assessed 12 percent. Peru has several
bilateral trade agreements for crude soybean oil. Imports from Bolivia
are duty free, while imports from Paraguay are granted 90 percent tariff
reduction. Soybean oil from Argentina has 80 percent tariff reduction.
Oil coming from any of these countries is not exempt from the 19 percent
value-added tax.