Peruvian Ginger Opportunities

The COVID-19 pandemic has drawn many consumers to purchase products for immune health, aiding in adopting plant-based diets and supporting their immune health. According to the Market Intelligence Agency Mintel, 37% of American consumers indicated increased concern about their immune system. New ways of consuming ginger are found in functional beverages and foods that meet the specific dietary needs of each consumer. Peru has seen a growing trend in producing its superfood, ranking as the fourth-largest ginger exporter in 2021 and the third-largest in 2023, behind China and the Netherlands. It presents an opportunity for Peruvian ginger to capitalize on the global demand for nutritious and healthy foods.

According to Fresh Fruit, experts in Business Intelligence, in their article “Despite problems, Peruvian ginger managed to grow in 2023,” dated March 6, 2024, they state that “ginger faced global challenges in 2023, highlighting the low quality of major producers such as China” (Fresh Fruit). It tells us that Peruvian ginger faced global challenges in 2023 precisely due to the poor quality of the leading producers of this root, including China. However, Peru managed to increase its exports. The Asian giant, the leading ginger supplier globally, has faced numerous global challenges since early 2023, with low-quality products being the main problem. It was particularly evident in Europe and the United States, where customers were unsatisfied with their products. While among the world leaders, Peruvian ginger faced similar problems with products contaminated with bacteria, which were rejected in Germany and raised concerns about market closure. To address this, China focused on improving the quality of its upcoming harvest and even entered the market with lower prices, affecting both Brazilian and Peruvian ginger. This pressure was more pronounced in Asian destinations, where China had more control. For example, demand for Peruvian ginger in South Korea decreased significantly for 2023, leaving Peru virtually behind. However, the situation differed in Europe and North America, allowing Peru a better year.

It was a very challenging year for Peru, but it ended well

Business Intelligence experts state that 2023 was a lousy year for Peruvian ginger, presaged by the arrival of the El Niño phenomenon, which threatened to damage crops and delay their harvests and export windows (Fresh Fruit). It means that 2023 was forecasted as a bad year for the Peruvian superfood due to the climatic event caused by the El Niño phenomenon. However, ginger was one of the few agricultural products that could end the year positively, thanks to its great reception in the United States and the Netherlands. Furthermore, the quality and volume problems China has faced since the 2019 pandemic have led to Peruvian ginger being preferred and valued more in this destination than Chinese ginger, despite the latter being the most significant global provider. Throughout 2023, Peru exported 75,679 tons of ginger for US$127 million, 30% more in volume and 79% more in value than the previous year. The increase in ginger prices, thanks to greater acceptance, was 38% in 2022.

International Performance

Furthermore, the company specializing in Business Intelligence maintains that the Peruvian ginger market was consolidating in 2023, with a significant increase in volume and exported value. The United States, the primary market for Peruvian ginger, acquired 31,721 tons for US$54 million, and the Netherlands has been experiencing an unfavorable streak for the past two years. However, in 2023, this was broken, reaching exponential growth, surpassing the record set in 2020. Peru exported 24,447 tons of ginger to this country for US$42 million, representing an increase in volume of 63% and value of 171% compared to 2022. Regarding the average price, it also benefited, increasing by 66%, leaving the product at US$1.73 per kilogram. Canada was a market that surprised last year, climbing two positions among the main buyers. Purchases from this country totaled 3,746 tons for US$6 million, 33% more in volume and 113% more in value. The South Korean and Chinese markets have been developing positively in 2022. Still, the better prices and improved quality of Chinese ginger imposed a barrier to Peruvian ginger, hindering development on this continent. After that, Peruvian agro-exporters responded quickly by focusing on the European market and continuing their expansion (Fresh Fruit).

Peruvian ginger exports reach $15.5 million in the first two months of 2023

According to the Agricultural News Agency, in the first two months of 2023, Peru’s ginger exports reached $15.5 million. According to data provided by Agrodata, between January and February 2023, Peru exported 12,187.342 kg of ginger for a FOB value of $15,537,782, representing an increase compared to the 11,471.428 kg exported for $15,119,879 in the same period in 2021. Graph 1 shows that in the first bimester of 2023, Peruvian ginger was the leading destination for shipments to the United States, with placements of $6,222,212, giving it a 39% share in shipments. The Netherlands was the next to receive shipments worth $5,106,769. The following positions were held by the United Kingdom with $810,805, Spain with $724,873, Canada with $679,756, Germany with $547,167, and the Republic of Korea with $380,678, respectively. The leading exporters in this sector are Agronegocios La Grama SAC with shipments of ($1,378,000), Elisur Organic SAC ($936,000), JCH Organic SAC ($891,000), Fruitxchange SAC ($830,000), Vancard Perú SAC ($735,000), and Kion Export SAC ($489,000), respectively (as quoted in Fresh Plaza). It means that in the first months of 2023, Peruvian ginger exports increased, with the United States being the leading destination with a 39% share of shipments of this product, followed by the Netherlands with a 33% share, the United Kingdom with 5.2%, Spain with 4.7%, Canada with 4.4%, Germany with 3.5%, and the Republic of Korea with 2.5%, with other shipments accounting for 8%, respectively, reflecting a total of $15.5 million, with Agronegocios La Gramma being the main agro-exporter of this root. Graph 1. Peruvian Ginger Exports First Bimester 2023.

Source: Country Agribusiness analysis research

Sustained Increase in Peruvian Ginger Exports

According to Wilfredo Koo Gallo, General Manager of Agrodata, “Peruvian ginger exports as of July 2023 increased by an average of 38%, reaching $56.3 million in July at an average price of $1.38 per kg” (Agrodata). It means that exports in the fourth bimester of 2023 were significant, with a sustained annual increase of 38% in volume and a 12% increase in price, respectively, as seen in Table 1 and Graph 2. In these figures, the United States occupied the first place with 44% of the root shipments, followed by the Netherlands with 31%, Spain and Canada with 5%, the United Kingdom with 4%, the Republic of Korea and Italy with 2%, the Russian Federation with 1%, and others with 2%, respectively, with Agronegocios La Gramma being the leading exporter in the sector.

Table 1. Peruvian Ginger Exports Fourth Bimester 2023

Chart 2. Peruvian Ginger Exports 2023

Chart 3. Main Agro-Exporting Companies of Peruvian Ginger 2022-2023

All Source by: Agrodata

Chart 3 shows that Agronegocios La Gramma remains the leading exporter of this root, maintaining its hegemony during the 2022-2023 period. All these statistics show that Peruvian ginger has experienced sustained growth during the 2022-2023 period, enabling it to expand in the global market.

Peru with Potential to Export More Ginger (Kion) and Turmeric

Global Economics and Business of the Exporters Association CIEN-ADEX, Peru, can benefit from the worldwide demand for healthy foods like ginger and turmeric. In 2021, Peru exported fresh ginger for $69,249,000 and turmeric for $3,960,000. The global market for fresh and powdered ginger reached $831.8 million in 2022, with the United States as the leading buyer and China in second place. Peru ranked third in ginger exports in 2022, after China and the Netherlands. Fresh turmeric recorded global sales of $247.9 million in 2022, with India as the leading international exporter. Peru ranked eighth in the world in fresh turmeric suppliers and first in Latin America. The director of CIEN-ADEX highlighted that Junín is the number one ginger exporting region in Peru, with a 70.5% share of the total shipped. It means that Peru has a huge opportunity to export more ginger and turmeric worldwide due to the global demand for these products, both in fresh and processed states, with Junín being the number one exporting region in the country. Vásquez Vela recommended promoting the consumption of ginger and turmeric with added value in Peru and training members of the production chains to diversify their portfolios and reach more markets. Orderly and sustainable production should be strengthened to avoid overproduction and price falls (ADEX).

Peruvian Ginger for the Whole World

In 2021, Peru ranked as the 4th largest exporter of ginger and the 9th of turmeric. During the announcement of the III Ginger Week 2023, Liz Soto Luna from the Exporters Association (ADEX) emphasized the need to continue efforts to strengthen the value chains of these products to maintain their global positioning. The event, held from May 31 to June 2 in Pichanaqui, Junín, was co-organized by ADEX Consulting and Elisur Organic to support sustainable development and highlight the potential of ginger and turmeric. It featured national and international speakers discussing important topics, technical sessions, and specialized videos to promote good agricultural practices and nature conservation.

In 2022, ginger exports reached $64 million, with 165 companies reaching 34 markets, while turmeric exports amounted to $3.6 million to 21 destinations by 79 companies. On the global stage, Lizbeth Pumasunco from ADEX Consulting highlighted Peru’s significant export volumes in 2021 and emphasized the diverse international demand for these spices in various industries, including food, cosmetics, and pharmaceuticals. The III Ginger Week was an opportunity to elevate ginger and turmeric producers from the Central Jungle to top exporters, positively impacting their communities and addressing the challenges they face due to a lack of economic development and efficient infrastructure. The event underscored the importance of collaboration between the public and private sectors to leverage organic and environmentally friendly production practices, aiming for a better future through sustainable efforts (ADEX).

National and International Trade Analysis of Peruvian Ginger

According to CIEN (Center for Research on Global Economics and Business) of ADEX, in 2022, the global market for fresh and powdered ginger accumulated $831.8 million, registering a 42.7% decrease compared to the previous year. The United States was the world’s leading buyer of fresh and powdered ginger, accounting for 19.0% of the total purchase value ($158.0 million), followed by the Netherlands ($127.4 million) and Japan ($112.2 million). Conversely, China was the world’s leading supplier of fresh and powdered ginger, with a sales value of $349.8 million, a 38.9% decrease from the previous year. As a re-export market, the Netherlands ranked as the second supplier of fresh and powdered ginger with $123.8 million, followed by Peru with $63.2 million (CIEN).

Table 2 shows that in 2022, China was the leading exporter globally, followed by the Netherlands in second place and Peru in third place.

Table 3 shows that in 2022, the United States was the leading buyer of fresh and powdered ginger, followed by the Netherlands and Japan respectively.

Peruvian Ginger Varieties for Export

From 2018 to 2022, Peruvian ginger exports increased at an average rate of 16.1% per year, driven by higher exports of dehydrated ginger (+77.1%). In 2022, total Peruvian ginger exports reached $69.2 million, a 24.1% increase compared to the previous year. In the first quarter of 2023, Peruvian ginger exports totaled $26.9 million, a growth of 28.9% compared to 2021. Ginger exports included the following products: fresh (77.4% of total value), dehydrated (12.7% of total value), juice (7.3% of total value), followed by powder (1.1% of total value), puree (0.4% of total value), and other presentations (1.0% of total value). All products had a pessimistic scenario, except for dehydrated and pureed ginger. Fresh ginger exports decreased by 28.5%, ginger juice exports decreased by 8.3%, and powdered ginger exports decreased by 44.8%. On the other hand, pureed ginger exports increased by 36.5%, while dehydrated ginger exports increased by 16.2% compared to the previous year. Additionally, total organic ginger exports from the United States reached $44.2 million, equivalent to 63.8% of the total value, with the rest being regular ginger ($25 million).

Table 4. Peruvian Ginger Export from 2018 to 2022

Table 4 shows that the main presentations of ginger in 2018-2023 are fresh, dehydrated, juice, powder, and puree. Among these, there is an increase in Peruvian ginger exports, with a 16% increment in dehydrated ginger.

Main Export Destinations of Peruvian Ginger

In 2022, North America was the leading destination for total ginger exports, registering $38.1 million (55.0% of the total value), followed by Europe (36.6% of the total value) and Asia (5.1% of the total value). Fresh ginger exports were mainly directed to the United States. Meanwhile, shipments of dehydrated ginger abroad were primarily sent to South Korea ($3.2 million), followed by the United States ($4.3 million), Australia ($288.0 thousand), and Italy ($162.5 million), totaling $5.1 million. As for powdered ginger exports, these were mainly sent to the United States.

Peruvian Ginger Exports

Figure 1 illustrates that the main export destinations of Peruvian ginger in 2022 were North America with a 55% share, Europe with a 36.6% share, and Asia with a 5.1% share, respectively. The United States primarily distributes fresh juice, puree, and powdered presentations.

Ginger Needs Production Planning

In the first bimester of 2022, Peruvian ginger shipments abroad totaled US$ 14,633,000, registering a contraction of -18.8% compared to the same period in 2021 (US$ 18,040,000) due to lower prices caused by existing oversupply. Susana Yturry Farge reported, as manager of Agro-Exports at the Exporters Association (ADEX), indicated the need to plan crops through a feasibility study led by the Ministry of Agricultural Development and Irrigation (Midagri). She detailed that in 2020, Peru was the third largest exporter of ginger ($105.6 million) behind China and the Netherlands, which influenced the increased number of producers in the cultivation of this crop, adding to those already in this sector. “Due to the boom of that year, and despite our country being in a privileged position with prices above the market and no competitors threatening our insertion, oversupply caused a price drop, which would have been avoided if Peru had a planning strategy aimed at keeping us at the peak of exports of this superfood,” said. In that sense, she urged all actors in the chain to work together and maintain the country’s position, developing public-private actions to achieve sustainable production and projecting international demand to be met by Peruvian companies in the short and medium term. Ginger is a nutritional superfood that can be sold fresh, in powder or liquid form, as juice, extract, or pure. The country’s high market position and demand for ginger will continue in the coming months.

On the other hand, the agricultural farms manager at Elisur Organic, Engineer Luis Angulo, pointed out that Peru has optimal temperature, humidity, and soils for ginger cultivation. Still, uncontrolled increases in cultivated areas would also pose other risks, such as the emergence of pests. “Crops can suffer from fungal rot, warts, and bacteria, which can be prevented with a proper work plan and expert advice. In that line, we train our farmers on this topic through the ginger and turmeric school ‘Ina Quipatsi,’ the first in the country and founded by Elisur Organic,” he emphasized. Peruvian ginger (kion) stands out compared to its counterparts from other nations (China and Brazil) due to its intermediate size and more attractive appearance. Its intense yellow color, spiciness, and acidity are much higher. Its organoleptic characteristics – detailed by Engineer Luis Angulo – are due to the agro-climatic characteristics of Peru related to soil, temperature, altitude, water, air, sunlight, and other aspects (Agricultural News Agency).

Conclusion

The COVID-19 pandemic has presented opportunities for the growth of Peruvian ginger production, particularly in the United States and the Netherlands. China, the leading ginger producer globally, has faced challenges due to low quality, resulting in price increases and the search for alternative countries like Peru. Peruvian ginger is known for its superior organoleptic quality and artisanal organic production. Despite the challenges faced by Peru in 2023, it ended well, mainly due to the great reception of our product in the United States and the Netherlands, primarily because of the poor quality of Chinese ginger. This situation has helped Peru improve its international performance in both volume and export value, making the United States its primary market. Peruvian companies, such as Agronegocios La Gramma, can now become the leading exporter of this superfood. This opportunity allows Peru to export more ginger, improving its production chain and training its members to diversify their portfolio and reach more markets. The global outlook presents favorable prospects for Peru, with sustained growth over the last five years. However, Peru should focus on delivering the product with added value, such as powders and pastes. Organic ginger is preferred due to its higher demand in the United States and Europe. To achieve this, Peru should better plan its product, leveraging its unique organoleptic properties and agroclimatic characteristics related to soil, temperature, humidity, water, air, sunlight, and other factors.

ABOUT THE AUTHOR

Luis Henry Contreras Del Aguila
Food Industries Engineer Universidad Nacional Agraria de la Selva- Tingo Maria- Peru
Master in Agribusiness Administration ESAN University – Lima-Peru
Country Agribusiness CEO

REFERENCES

ADEX. “Peru con Potencial para Exportar mas Kion y Curcuma. www.adexperu.org.pe, 01 de Junio 2023, https://www.adexperu.org.pe/notadeprensa/peru-con-potencial-para-exportar-mas-kion-y-curcuma.

ADEX. “Mejoraran Posisiconamiento del Jengibre Y Curcuma Peruanos en el Mundo”. www.adexperu.org.pe, 04 de Mayo 2023, https://www.adexperu.org.pe/notadeprensa/mejoraran-posicionamiento-del-jengibre-y-curcuma-peruanos-en-el-mundo/

CIEN. Jengibre: Panorama del Comercio Nacional e Internacional. www.cien.adexperu.org.pe, https://www.cien.adexperu.org.pe/wp-content/uploads/2023/05/CIEN_NSIM2_Mayo_2023_Jengibre.pdf

Fresh Plaza. “Las exportaciones peruanas de jengibre suman 15,5 millones en los dos primeros meses de 2023”, 11 de Marzo 2024, www.freshplaza.es, https://www.freshplaza.es/article/9509872/las-exportaciones-peruanas-de-jengibre-suman-15-5-millones-en-los-dos-primeros-meses-de-2023/.

Fresh Fruit. “A pesar de los problemas, el jengibre peruano logró crecer el 2023”. www.freshfruit.pe, 25 de Febrero 2024, https://freshfruit.pe/2024/02/25/a-pesar-de-los-problemas-el-jengibre-peruano-logro-crecer-el-2023/

Peruvian Ginger: Navigating Global Challenges