Uruguay Export 2016 Prospects
Foodex Conference
Between March 8th and 11th, 2016, Uruguay will be present at the 41st edition of Foodex, the largest Asian Food and Beverages fair held in Japan expecting more than 77,000 visitors from around the world. The Uruguay XXI Institute together with the Uruguayan-Japanese Chamber of Commerce and Industry, prepared the participation of Uruguay at the fair with several stands representing Uruguayan exports.
The presence at this fair represents an interesting opportunity for Uruguay export, since the Japanese market showed positive behavior in 2014 and 2015, becoming an important destination of Uruguayan products. Actually, food exports to Asia have had a steady increase since 2010, having exported US$ 1,388 million in 2014 and US$ 1,487 million in 2015.
The Uruguayan Combo
The three chosen quality products for Foodex for 2016 are: wine, caviar and rice.
Uruguay is the first country in the southern hemisphere in caviar production and is the eighth largest exporter worldwide with a complete natural and strict process of production. (see previous blog on this)
Uruguay combines traditional craftsmanship with the latest technology generating 100% of its energy based on renewable sources. Internationally awarded Traversa wines were selected for Foodex Fair. Traversa is already marketed in Japan, the United States, Brazil, Spain, Russia, Poland, among others.
Uruguay`s wine production is the first in Latin America to implement with its geo reference to wine establishments. Through a QR code on the label, the consumer can visualize the origin and history of wine from the vine to the bottle, including geographical information of the vineyard and property information, ensuring quality and food safety.
Uruguay is ranked as the eighth largest world exporter of rice. The rice sector in 2015 reached US$ 360 million in exports. Ururice, a family business that emphasizes in sustainable production chose a non-transgenic variety of Japanese rice to exhibit at Foodex. This variety has a shorter grain obtained by simple crosses and selections and was especially designed for Eastern markets.
The presence of Uruguay in eastern fairs is essential. Exports to China that had a significant growth in recent years, they positioned the beef sales at 46%, milk at 21% and rice at 11%. Summing 41% of the exports in that market during 2015.
Forecast
Uruguay is looking very carefully at the map of exports during 2016, trying to overcome threats and keep finding opportunities to keep its ranking as the third exporter of South America after Paraguay and Ecuador. The ranking of exported products was led by soybeans, following by beef, dairy, pulp and concentrates for manufacture of beverages.
It is no secret that the financial and economic problems of Brazil will continue and therefore affect the Uruguayan current exports. The exports of malt, dairy products, rubber, auto parts to Brazil fell by 37% during the last period. Although some of the industrial sectors will continue to focus its business in Brazil, Uruguay will need to redirect its commodity exports to other markets.
Better Perspectives with Argentina
Exports to Argentina during 2016 started well as the new government adopted a stance of openness. It is expected that the regional trading will rise, which will have positive effects for Uruguay.
Argentina will eliminate taxes on most of agricultural products and a gradual decline for soybeans. In the case of soybeans the rate will be reduced from 35% today to 30%, while for the maize it came down to 20%, and for wheat 23% and meat tax will be totally eliminated.
The sectors with greater exposure to Argentina are car parts, paper and cardboard, paints and varnishes and clothing and footwear. These items account for 73% of sales to that destination.
Argentina export improvements will also help Uruguay to position itself as strong exporter of corn and wheat. Uruguay will complete Argentinean ships and use other commercial alternatives merging actions together with Argentina.
A new connection with Argentina
A technical, economic and environmental feasibility study of a bridge between the Uruguayan city of Bella Union and Argentina Monte Caseros is ready to begin.
This bridge would be the fourth road link between Uruguay and Argentina on the Uruguay River. Until now, you can enter Argentina by bridges Gualeguaychú with Fray Bentos, Paysandu and Colon and road and rail link between Salto and Concordia.
The challenge today is to gain connections to the interior of Argentina and Uruguay, integrating them within Mercosur and positioning its area of influence as a global region.
During the last 25 years the total passenger trips has increased at a rate of 12% per annum. Trade between the Mercosur countries has increased to US$ 357 million in 2016.
Mary Ann Thompson
