Peru’s explosive housing market is showing a decline as inventory increases. As I’ve mentioned in these pages before, the amount of debt in dollars is weighing on the marketplace, and the overbuilt market is screaming “bubble.” Furthermore, as many new units are set to come on the market in the next year, expect declines in prices as builders realize that they have to sell something in order to keep up with debt service. The construction sector has been a big employer in recent years both through construction jobs & all of the ancillary services and products related to housing. As construction slows, so will the overall economy.
Reposted as it’s soon!
Each year on June 24th (which coincides with the winter solstice in South America) there is a festival to honor the Inca god Inti. The Festival also celebrates the coming New Year.
The celebration began in 1412, but was banned after 1535 by Catholic Clergy. It was then preserved secretly for many years, and recreated publicly again in 1944.
From Peru This Week:
The festivals that fill Cusco’s cultural calendar honor a unique blend of Andean and Catholic traditions. Every June 24th, the city stages Inti Raymi, the Festival of the Sun, and thousands of Peruvians and visitors take to the city streets for dancing, music, and colorful cultural reenactments.
Inti Raymi is a religious celebration that pays homage to Inti, the Inca Sun deity. Held during the winter solstice when the sun is furthest from Earth (in the southern hemisphere), the celebration is a plea for Inti to return to his Inca sons, as their crops would receive no nourishment without the life-giving energy of the sun. Today’s Inti Raymi celebration honors a new cycle of life, just like the ancient festival upon which it is modeled.
During the Spanish conquest Inti Raymi was banned by authorities because of its pagan nature, and the festival went underground, much like many of the Inca structures buried beneath the monuments and cathedrals built by the Spanish. But in 1944, Inti Raymi rose once again with a reenactment of the festival performed by local Cusqueño actors. The event has grown in size and popularity since then to become one of the largest and most important celebrations in the region.
With the Peruvian Sol declining in value, the Central Bank of Peru is keeping the current rate of 3.25% in place for now, mainly to avoid further weakening of the currency.
The rapid descent of the Peruvian Sol is affecting consumers in Peru. While the US is seeing official rates of inflation below the Fed target of 2%, Peru is paying a lot more for imported products including appliances because of the decline in the national currency the Peruvian Sol.
Another month has flown by, and here we are in March already. We did however manage to get all of the materials for the solar coffee drying tents lined up, and they all have a waiting space in San Ramon for installation in May.
Meanwhile, we’re focused on the move. Just to bring you up to speed, our place in Lima is going to be needed by the owners, so we’ve decided to relocate home base in Peru to the cloud forest region of San Martin province and the tropical city of Tarapoto. Everything is lined up, we’re just waiting until the last possible moment to do the final wrap. It quite literally is a wrap, as we’ll be covering up everything that’s not in a box (and those too) in shrink wrap. Everything goes tomorrow!
We had wanted to go to Chanchamayo this trip personally, but there were many washed out roads & even impassable river crossings, so we just decided to focus on the growing season ahead (see Massive Flooding in the Peruvian Rainforest, and Torrential Rains & Mudslides Continue to Plague Peru.)
I try to keep up with the news as much as I can, and Yrma often points out things that may be of interest. We watch with particular attention to news that affect the Peruvian economy, and we tend to focus of course on agricultural imports, in particular coffee & chocolate. Here’s several translated articles that you may enjoy.
Two of the things that we’ve always wanted to import are cocoa (cacao) & chocolate products such as nibs, and raw cocoa pasta. We have met many smaller and medium sized producers, and visited farms and seen the whole process from picking the beans, fermentation, drying, roasting, cleaning, mixing and finally to adding ingredients to form something marvelous to the tongue…
We’re currently staying in Tarapoto (the City of the Palms,) which is a laid back medium sized city in a cloud forest region of Peru. One lure to this area is the vast amount of natural areas that surround Tarapoto in the region of San Martin.
One of those natural attractions is the cascading waterfalls at Ahuashiyacu. Considered by many to be the best falls overall, it’s certainly the closest, at just 14 km from Tarapoto.
The Lima Chamber of Commerce recorded a six-fold expansion of the crop. (Photo: Andina/Melina Mejia)
6 Fold Increase in Production
From Peru This Week:
Growth in the quinoa market increased from 8 new markets in 2013 to 18 new markets in 2014. These markets include major importers such as Poland, Taiwan, Singapore, Thailand, China, and later Malaysia, South Korea, Saudi Arabia, Romania and Portugal in 2014.
According to Carlos Garcia, manager of CCEX, the main market for Peruvian quinoa above all is the United States.
Of the varieties of quinoa, white quinoa is the most commonly exported making up 85%, followed by red quinoa at 10%.
In 2014, quinoa finished fourth in major agricultural products exported after grapes, asparagus, and avocados.
Depending on who you talk to or read these days, the Peruvian economy is robust, or slowing. While officials remain upbeat & expect economic growth to be close to 5%, they missed the mark by nearly half last year. (see Why the Peruvian Economy Matters to the World) While the continued decline of the Sol vs the USD is supportive of export growth, the fact that 50% of all debt in Peru is denominated in dollars will offset any gains from a lower national currency.