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(Last updated: 12 May 2008)
Trends and opportunities
The market
Colombia is highly urbanised and is divided into five geographic regions comprising 32 provinces, called departments. While the population of many Latin American countries is concentrated in just one or two major cities, Colombia’s population is well distributed throughout the country, with one city boasting more than seven million inhabitants and two of them with more than two million inhabitants. There are another 11 cities with populations exceeding 500,000, and 22 cities with more than 100,000 inhabitants. This population dispersion results in several market niches that can signify diversified country risk for an investor.
Colombia is divided into five main geographical areas: the Atlantic coast, the Pacific coast, the Andes highlands, the Llanos Orientales plain and the Amazon basin. The Atlantic coast, part of the Andean Region and Los Llanos Orientales Plain are the cattle business centre of the country.
Colombia has been inplementing beef export plans to the Caribbean Islands and the Andean region. Opportunities exist for Australian companies providing machinery, cost-effective fertilisers and irrigation solutions, genetics, genetics technology, meat procesing technology, feedlot technology and pastures, traceability technology.
On the livestock front, the Brahman market is extensive in Colombia, and requires technical and technological assistance to improve beef production. Protocols were recently approved for the import of bovine semen, embyos and livestock from Australia to Colombia.
Colombian farmers are interested in importing Australian cattle for breeding purposes and to develop their milking herd.
Agriculture and livestock market
Tropical location, the availability of natural resources, and climate diversity are factors that allow Colombia to have a very strong agriculture and livestock sector. According to the Ministry of Agriculture, this sector currently accounts for 14 per cent of the country’s total GDP.
Over the last few years the agricultural sector has been focusing not only on agricultural development, but also has included industrial processes to strengthen and consolidate the sector. As a result, agri industry activities account for approximately 27 per cent of total industry production and for four per cent of total GDP.
Colombia is a medium-size sugar cane producer, with only two per cent of world market share. However, it is one of the countries with highest potential since it accounts for three per cent of raw sugar exports worldwide and two per cent of white sugar, with 19 per cent and eight per cent annual growths, respectively.
Ethanol, another sugar cane product, is a substance that may be used as an additive to traditional fuels. Colombia has passed a legislation to reduce CO² emissions by mixing power alcohols with traditional fuels. Law 693 of 2001 mandates that, prior to September 2005, in cities with more than 500,000 inhabitants; gasoline must contain at least 10 per cent ethanol. Since mid-2004, there are four ongoing projects for the production of ethanol, with an average capacity of 150,000L per day. Given the estimates of required ethanol for the new law (1,000,000L per day), there is still space for more investment.
Cattle and dairy products
Cattle raising and related activities have modernised and grown in a sustained and competitive manner. The government has created several tax incentives such as sales tax exemption for milk, cheese and beef sales. Moreover, leather goods have been included in the ATPDEA.
Raising cattle is one of the main rural activity in Colombia, with 37 million hectares supporting approximately 24 million heads of cattle (80 per cent Brahman), two per cent of the world’s total. Of this amount, 57 per cent is devoted to meat production, three per cent to milk production, and 40 per cent to both purposes. Between 1990 and 2003, the average annual growth in number of cattle was one per cent (above the 0.24 per cent world average), allowing Colombia to position itself as the leading cattle producer in the Andean community and the ninth-largest producer worldwide.
Colombia has established itself as the leading milk producer in the Andean community. The potential for growth is still very large since exported volumes are marginal as a proportion of total production. Milk production in the country has grown significantly due to increased internal and external demand. Approximately 98 per cent of internal milk consumption is supplied by Colombian producers.
Opportunities
Colombian cattle raising, beef and milk production are increasing but the big producers are lacking side services such as:
- Genetics (bovine semen, embryos and livestock)
- Genetics technology (embryo and semen transfer and collection)
- Meat procesing (services, technology, machinery and equipment)
- Enhanced seeds and pastures
- Agricultural and cattle raising management know-how
- Fertilisers and enhanced nutrients (manure)
- Livestock: Australian livestock and genetics free of contamination and diseases have a competitive edge over imports from USA, Canada and Argentina.
- Traceability solutions (software, hardware)
Another sector that is booming in Colombia due to ethanol production is sugar cane.
- Sugar cane technology and management (to produce ethanol as well)
- Fertilisers
- Equipment and machinery
- Ethanol production technology
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