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Tridge analysis

Peruvian ginger production in 2020 will be over 20 thousand MT

Whole Ginger
Root
Peru
COVID-19
Price Trend
Jan 4, 2021
Written by
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Stelamari Ito
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After some years of low production, Peru regains momentum for ginger production and expects to produce 20 thousand MT for 2020 carried on the high demand due to the healthier foods movement and prevention of coronavirus.

Peruvian ginger production on the rise

According to the Ministry of Agrarian Development and Irrigation of Peru (Minagri), after 3 years of reductions in the production volume of ginger, Peru expects a good production volume of 20,000 MT for 2020 which is a YoY growth of 15%. After the record production in 2016 with 41,1 thousand MT due to the growth in the planted area that totaled 2,209 ha, there has been a gradual decrease in production due to the hard competition with conventional ginger from China that dominates the whole ginger market with 66% share of world exports in 2019. But in terms of exports, Peruvian ginger has grown from 0,36% share in 2012 to 2,93% in 2019, becoming the fourth exporter of ginger after China, Thailand, and the Netherlands, especially on the niche market of organic gingers.

Source: Minagri

Demand for ginger

The coronavirus has brought back an interest in high-quality ginger for its antioxidant and immune-boosting characteristics. The US is the largest importer of ginger and has an average monthly demand of 7 thousand MT of ginger, but due to the coronavirus’s higher demand, it has imported over 11 thousand MT in June. The Netherlands is the second-largest importer and has a more variable purchasing schedule but the import of ginger achieve a record of more than 12 thousand MT in May. The Peruvian organic ginger is highly appreciated due to its high quality and had a YoY increase of 110% in export volume up to August and 97% in value due to higher demands from the US and the EU. 

Source: Minagri

Peru is the largest exporter of organic ginger to the US

Peru offers a unique organic criollo variety of ginger that is known for having a bold flavor and it is very appreciated by the US market making them their biggest supplier of organic ginger. In a price comparison, the Peruvian organic ginger is pricier than the Chinese conventional, but the quality of the produce justifies it. In 2020 the highest FOB (Free on Board) pricing achieved by the Peruvian ginger was US$ 2,71 per kg in April with the US as destination and the lowest up to August was US$ 1,45 per kg with Spain as the destination, the highest is linked to the sudden demand for healthier and superfoods due to the pandemic. In comparison, 2019 had the highest price in March to the US with a value of US$ 3,65 per kg and the lowest in October with US$ 1,37 per kg to Spain, the higher price in 2019 is explained by the shortage of ginger in China due to too much rain for the campaign of MY2018-19 and droughts in the growing period for MY 2019/2020 in the production areas that affected their production volumes. 

Source: Minagri

Peru next steps

According to Minagri, 90% of ginger production is concentrated in Junín region due to the perfect weather and soil conditions. But Peru does still have other regions with similar conditions that could fit for the production of ginger, and the biggest limitation at the moment is the identification of these zones. A search for these zones shall be supported by the governmental divisions to aim growth of ginger production in the country. Today 95% of the ginger produced in Peru is Organic of the highest quality, and the country shall continue to focus on this type of cultivation but shall also increase conventional production for other markets as well to access the market that is dominated by China. Other Latin American countries such as Brazil and Costa Rica are trying to cultivate organic gingers but they have not achieved the same quality.

Sources:

CDN. El Jenjibre o kion peruano, una estrella queue vuelve.

FreshPlaza. "Peru is expected to produce more than 20,000 tons of ginger in 2020". 

FreshPlaza. "High increase in both demand and supply for Peruvian organic ginger this year". 

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