Food importers now set their sights on fertilizers

Faced with the losses generated by the shortage of basic foodstuffs, businessmen are trying to recover by acquiring fertilizers. They are negotiating with suppliers from Brazil and Argentina.
During the last few months, there have been warnings about the shortage of foodstuffs such as wheat, corn and sugar. But to what extent? Esteban Vargas, Central Operations Manager at Dinet, points out that large companies that imported up to 500 containers a month with basic foodstuffs, have stopped bringing in between 100 and 250.
It is because of this that companies in this sector are looking at alternative markets and betting on the purchase of fertilizers. “They aim to change their mix,” reveals the executive.
Businessmen see this as a business strategy because they know that there will be a shortage and in the coming months the value of the input will skyrocket; “in this way they hope to recover their losses,” he says.
Negotiations are being carried out with countries such as Brazil and Argentina, since there are currently no restrictions for this, he points out. Although organic fertilizers are an alternative, this solution could only work for small products, he says.
On the other hand, imports of packaged products are also falling. “It is not noticeable, but we see that (the number of containers) has decreased by 5% to 6% compared to the previous year,” he notes.

Storage

Despite the decrease in the number of containers entering the country in food categories, the warehouses of Dinet's distribution centers are at capacity and the same is true for other logistics operators. "We do not have excess capacity, we have clients who ask us for more space and there is no more," says Vargas. And they are companies in the retail sector that are beginning to increase the demand for space.
"We see that household appliances, technology, sportswear, grills, liquor, refrigerators are imported more," explains the executive. This is due to the possibility that Peru will qualify for the World Cup. "In 2020, companies imported cautiously, but when consumption rose, they did not have time to react. There were sales, but not at the levels they expected," he notes. In this sense, they are now taking precautions.
Given the high demand, have the prices for space increased? They are maintained, says Esteban Vargas. “Due to political uncertainty, what we have been doing is negotiating in soles with real estate operators so that our clients are not affected by the exchange rate,” he says.

Trend

Esteban Vargas says that companies are now asking logistics operators to completely digitalize their operations. “Warehouse automation is being demanded. We have a retail client that has 30,000 square meters and has already requested the project from us.”
Diario Gestión May 27, 2022