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Education and FTA ratification will fuel Columbian interest in US Pork

by 5m Editor
7 November 2007, at 12:31pm

COLUMBIA - When the US Congress ratifies the free trade agreement (FTA) that was signed with Colombia nearly a year ago, it will increase exports of US beef and pork to the South American country.

The size of the Colombia market is significant and the FTA is a positive step for both US pork and beef producers, says US Meat Export Federation. US red meat exporters will have increasing opportunities to do business in this country as barriers to product entry are reduced over the next several years.

Colombia has one of Latin America's largest population, behind Brazil and Mexico, so there is demand for meat protein. Yet the country struggles to maintain efficient livestock and meat production due to continued political unrest and corruption.

Ricardo Vernazza-Paganini, USMEF Director for Central and South America and Global Strategic Coordination, has been exploring trade opportunities.

“US red meat products exported to Colombia will be more competitive to other products due to the preference of US pork consistency by large processors and the higher quality of US beef products compared to domestic or other imports,” said Mr Vernazza-Paganini.

Columbian wet market, where 50% of pork is currently sold. But processors prefer higher quality imported meat.

Small scale
Although there are no official statistics, USMEF estimates that around 50 percent of pork production in Colombia comes from family-owned farms where the main distribution channel is through wet markets and butcheries. Pork processors are attracted to US pork because of its consistent quality and supply.

However, until now, US pork exporters have resisted links to the Columbian market - mainly because of a price band duty set by the Colombian government between five and 80 percent (it averages 30 percent). This variable rate is deemed, by most, a significant a risk factor with a high potential to lose revenue due to excessive import tariffs.

But prospects are positive. The FTA would eliminate variable duty on US pork and replace it with a 20-percent fixed rate, that would be phased during the next five years time to allow duty-free access.

USMEF says that US pork exporters are excited by the proposals, although the greatest challenge will be to persuade Colombians to eat more pigmeat products. Pork consumption is low in Colombia, and mostly due to negative consumer perceptions which regard it as unsafe and from dirty animals.

Changing attitudes
Even so, USMEF is confident it can quash this perception. It has been successful in other South American markets and believes the same can be achieved in Columbia.

For example, in August this year US pork and pork variety meat exports increased to Guatemala by 29 percent to 3,935 tonnes (volume). It represented a value of nearly $7.9 million and was a and 27 percent increase on the same period 2006.

"We have an opportunity to work with Colombian pork producers as we did in Guatemala to turnaround the perception that pork is unhealthy. By educating consumers about the benefits and safety of pork, they are more apt to eat pork again," explained Mr Vernazza-Paganini.

5m Editor