4.2.3.- Guatemala

Guatemala is the second Central American exporter of non-traditional agricultural crops. Costa Rica is still much bigger. The climate is very favourable, labour is available in large quantities, supply companies exist for most products and services and infrastructure, both internal as for exports, is acceptable. The main restraint for further development of the agriculture is considered to be safety and crime.
Guatemala can potentially start playing a bigger role in both specialty markets as well as commodity markets. In other to extend its exports, Guatemala will have to start focussing on markets like Europe. Nowadays, exports are mainly directed to the North American market. In order to do so, Guatemala will have to adjust itself to quality requirements and European certification systems like Eurepgap and MPS / FFP.
The longer transit time to Europe is a limiting factor for further development of exports to Europe although not considered as a major problem. More container boats making the journey to Europe without any stops in the Caribbean would be a welcome contribution to this realise this goal. 

Figure 4.5 Business Ideavelopment Chart Guatemala.
*Tomato, cucumber, pepper and eggplant

4.2.3.1.- Pineapple

Pineapple production is a fast growing sector in Guatemala which reached an export value over US$ 7.5 million in 2006 but with an area harvested of 4.200 hectares relatively small compared to Costa Rica.
Land availability and prices are still attractive but competition with large sugar cane producers is getting stronger. With an increasing demand of pineapple in the European market, Guatemala can be an option to expand pineapple production. 

Opportunities

4.2.3.2.- Banana

Guatemala is the second largest exporter of bananas in Central America after Costa Rica. Banana is being produced on the tropical lowlands by companies like Chiquita, Del Monte, Dole and Fyffes and a few independently owned plantations. Banana is no longer regarded as non-traditional export crop. The challenge in banana production for the future will be reducing the environmental impact and improvement of the social and working conditions of the workers. An example of efforts being made is the certification of Chiquita’s plantations with Rainforest Alliance and the commercial adds and publicity that goes with it.  

Opportunities

4.2.3.3.- Melon and Watermelon

Melon and watermelon are produced in rather large quantities in Guatemala for the North American market in the North Western region of Zacapa. The production window is wider in comparison to other Central American countries. The production season is divided in two periods (December until end of January and March until the end of April) to prevent problems with insects like predominantly white fly.
Europe is still an insignificant destination although like previously mentioned in chapter 2, the real export value is suspected to be higher.
The main opportunity to be identified is that Guatemalan melons and watermelons can be a good alternative for the European market. Importers can source their melons in Guatemala but will have to invest to adjust production methods to their requirements and certification standards. Varieties and growing protocols will have to be revised. Providers of melon seeds are already present in the Guatemalan market but can play a significant role in the supply of varieties suitable for the European market and / or varieties containing resistance against certain plagues.

Opportunities

4.2.3.4.- Mango

Mango is being grown in the zone of Zacapa in the North-eastern part o the country and in the zone of Retalhuleu in the South-western part of the country. Guatemala has about 20 companies that are producing mango for export. The export of mangoes is focused on the United States market, although phytosanitary requirements are much higher than in Europe (hot water treatment). On the other hand, quality requirements for Europe are stricter and the longer transit time is more risky, especially with a sensitive fruit like mango. Few companies are actually exporting to Europe but technically and agronomically speaking, it has proven to be possible.
An opportunity that can be identified is on post harvest processing equipment to assure consistent quality (e.g. size, weight and colour) and post harvest treatments.
Recently mango gained importance as export product and a technical assistance program under PIPAA was being executed.

Opportunities

4.2.3.5.- Young plants

For the past 30 years, Guatemala has been producing and exporting ornamental young plants to Europe and North America.  The ornamental plant sector exports live plants in various forms, such as: rooted and sprouting plants, tips, rhizomes, shoots and cuttings. The great diversity of climates and micro-climates in the country permits growing native and foreign species.
Next to the production of ornamental young plants, Guatemala plays an important role in the production of young plants and seeds of bedding plants and flowering pot plants. The sector is made up of both local companies as well as foreign companies (mainly from the USA).

Young plants in Guatemala show rather good perspectives because of increasing possibilities in first of all the North American market but also because of improving facilities at the international airport and the positive set of conditions to set up businesses in this sector. Safety, as mentioned before, remains to be the major issue of concern.

 Opportunities

4.2.3.6.- Pre-finished pot plans

Guatemala has good options for the production of pot plants due to the variety in climate and the low cost of labour. As the young plants sector is already quite well developed, it can be considered as a relatively small step to upgrade their products to pre-finished pot plants. Nevertheless, knowledge and capital is required to make such steps which is the main reason that there is a strong need for strategic partners. Dutch companies can play that role. Some of them have already decided to do so and some of these initiatives supported with PSOM funds. 

Due to the enormous potential of pre-finished pot plants for Central America and the positive aspects Guatemala has to offer compared to other countries in the region, it is expected that this sector will grow substantially in the near future. As it is a sector which requires quite some (Dutch) technology and consultancy, there are various opportunities to be detected for Dutch suppliers, investors and importers.

Opportunities

4.2.3.7.- Cut flowers

Flowers are cultivated in the central highlands. Flower production is mainly for the local and regional market although some companies export to mainly the east coast of the United States. Guatemala does have favourable conditions for the production of cut flowers but the significance of this sector in an international perspective is so small, that international companies quickly make other choices.

It is hard to predict what the future of the Guatemalan flower sector will look like but if foreign companies start to invest, it might have a snowball effect. If so, various opportunities start to appear for mainly Dutch supply companies.

Opportunities

4.2.3.8.- Foliage

Cut foliage is mainly being produced in the northern highlands and lowlands. Recently some growers have been doing some tests on the production of leather leaf in more moderate climates in the south-western part of Guatemala. After Costa Rica, Guatemala is the largest exporter of cut foliage.

Costa Rica still is the main supplier of foliage but its sector is facing difficulties due to rising costs and staggering prices in the (European) market. Another big producer of foliage, Florida, is also reducing its production due to increasing problems with hurricanes destroying produce. As a result, both the European market as well as the North American market could become more attractive in upcoming years for produce which has good quality and is produced with acceptable costs. As the climate is favourable and the sector is already present in Guatemala, the country can be regarded as the main candidate to grow substantially in this crop.

Opportunities

4.2.3.9.- Vegetables

Mini vegetables
Mini vegetables (mainly leguminous vegetables) like sugar snap peas and snow peas are being produced in the central highland of Guatemala. The lower altitudes are used for production at the beginning of the growing season and moves up later on in the season to be able to produce the required quality. These crops are commonly produced by small farmers who deliver the products to a central grading, packing and exporting facility. Next to collection of small farmers and small farmers’ organizations, several exporting companies started their own production fields.
Export of mini vegetables is mainly to the United States by air. Several companies have succeeded in sending vegetables by sea container to the United States.
The grading and packing of mini vegetables like sugar snap peas and snow peas are very labour intensive which gives Guatemala a competitive advantage. 

Tomatoes, sweet pepper, cucumber and egg plant
One of the advantages of signing DR-CAFTA is the admission of Guatemalan tomatoes and sweet peppers to the United States Market since 2006. Export is being done with refrigerated sea containers. Guatemala is geographically well located to the United States and can enter through both west and east coast. Besides exports to the US, vegetables are exported to Canada, Mexico and within the Central American region.
Business opportunities can mainly be identified for suppliers of products (and in lesser extent services) for the production of high quality, green house grown vegetables. For outdoor grown vegetables, main opportunities can be detected for seed companies and to a lesser extent (biological) crop protection.

Other vegetables
Some other vegetables (like cabbage, potatoes and carrots) are being produced for local and regional markets (mainly El Salvador). No business opportunities in this sector have been identified. See next page for the opportunities identified for the Guatemalan vegetable sector.

Opportunities

4.2.3.10.- Processed fruits and potencial crops

Guatemala is mainly exporting processed fruit and vegetable juices to the Central American region (El Salvador, Costa Rica and Honduras) and to the United States.
A crop that can be mentioned as potential for Guatemala is avocado. There already exist commercial plantations and fruits are being exported.

Opportunities:

4.2.3.11.- Sumary