As a result of the blockade that has been in place since July 2020 on the entry of animal products from Costa Rica into the Panamanian market, Costa Rican exports to Panama are reported to have fallen and companies such as Dos Pinos are reporting losses in the millions.
The trade conflict began when Panama informed the National Animal Health Service (SENASA), an agency of Costa Rica's Ministry of Agriculture and Livestock (MAG), of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been trading in the Panamanian market for many years.
The time and cost of maritime routes between Costa Rica and China, and the capacity that the food industry develops to take advantage of existing opportunities, are factors that in the coming years will influence the evolution of the FTA signed between the two countries.
Ten years after the entry into force of the Free Trade Agreement between China and Costa Rica, Costa Rican authorities assure that they are in a continuous negotiation process involving the National Animal Health Service (Senasa) and the State Phytosanitary Service (SFE).
Betting on food that involves an industrial process, focusing on markets that are not saturated and on the trends that predominate among consumers are some of the strategies that could multiply the income of agricultural producers.
It is estimated that the sale of dried pineapple reaches a value on the international market of 1,600% higher than the price achieved by selling it fresh. In the case of dried mango, the difference amounts to 1.512%.
In 2019, exports of goods are estimated to total nearly $11.526 million, barely 2% higher than reported in the previous year, and far from the 6% increase recorded in 2018.
According to estimates by the Ministry of Foreign Trade, foreign sales of services registered greater dynamism last year, since between 2018 and 2019, they went from Ch$9,090 million to Ch$9,565 million, equivalent to a 5% increase.
Procomer, an entity that leads since 2016 the project of the Unique Investment Window in Costa Rica, says that 12 procedures related to the opening of companies and entry into the free zone regime, are already in the testing phase.
The aim of the Foreign Trade Promoter (Procomer) is to integrate in a single digital process, the more than 68 procedures that currently must be carried out in different ministries and municipalities to open and operate a business in Costa Rica.
The cultivation, processing and export of coconut and its derivatives, and the transformation of goat activity focused on the manufacture of personal care and health products, are some of the proposals for Costa Rican agriculture to generate greater added value.
A study conducted by FUNDES Strategy identifies new opportunities for Costa Rica's agricultural sector.
From January to September 2019, sales of the agricultural sector abroad totaled $2,080 million, 7% less than in the same period in 2018, mainly because of the performance of banana, pineapple and coffee exports.
Figures from the Foreign Trade Promoter (Procomer) detail that between the first nine months of 2018 and the same period of 2019, exports registered a slight increase, going from $8,490 million to $8,629 million.
Since Costa Rica suspended the entry of Hass avocado from Mexico, countries such as Chile, Peru and Nicaragua have taken advantage of the situation to increase their exports to the Costa Rican market.
The dispute that is still unresolved dates back several years, when in May 2014 the Costa Rican authorities decided to ban the import of avocado from Mexico, arguing the existence of the disease called sunspot.
Between 2017 and 2018, honey production increased by 5%, and according to businessmen there are opportunities for the sector to continue on the right path, because in the Costa Rican market there is still demand that can not be met with local production.
The Agricultural Statistical Bulletin, prepared by the Executive Secretariat of Agricultural Sector Planning, states that between 2017 and 2018 production grew from 1,128 to 1,180 metric tons.
Businessmen in the sector expect that this year's foreign sales of medicines will maintain the positive trend, consistent with the upward trend shown in the last four years.
Data from Procomer of Costa Rica, specify that in recent years’ exports of medicines have recorded positive year-on-year variations, with the highest reported between 2017 and 2018, when sales grew from $159 million to $184 million, equivalent to an increase of 16%.
The outlook for the country's manufacturing industry is unfavorable, since in the first four months of the year companies outside the free trade zone reported a 5% year-on-year drop in their sales abroad.
Consistent with the behavior reported since the beginning of the year, in the first four months’ sales of Costa Rican goods abroad remained stagnant, totaling $3,693 million, just 0.2% above the figure reported in April 2018.
The decline in exports of the agricultural sector reported in the first quarter, coupled with the lack of rainfall, has caused that the beginning of the year has not been the best for businessmen in Costa Rica.
Figures from the Costa Rica Foreign Trade Promoter report that between the first quarter of 2018 and the same period in 2019, exports from the agricultural sector were down by $107 million.
The strong growth reported in past years in foreign sales of frozen fruit from Costa Rica has declined, a situation that businessmen believe is because of market saturation.
According to data from the Foreign Trade Promoter (Procomer), between 2016 and 2017 foreign sales of frozen fruit grew 21%, from $65 million to $79 million, but for the period between 2017 and 2018 the increase was just 1%, going from $79 million to $80 million.
During the first three months of the year, sales of Costa Rican goods abroad totaled $2.757 million, just 0.5% above the $2.744 million reported as of March 2018.
The most updated data of the Foreign Trade Promoter (Procomer) specify that from January to March of this year the exports of companies in free trade zones registered a 12% year-on-year increase, and in the case of foreign sales of products in final regime fell 9%.
Because it has become expensive in Costa Rica to produce manufactured and agricultural goods, exports of services are increasingly gaining in market share.
Figures from the Promotora de Comercio Exterior (Procomer) detail that of the total exports in 2018, 56% corresponded to sale of goods and 44% to services. This composition is far from the figures of a decade ago, since in 2008 exports of goods monopolized 62% and services 38%.
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