Many Peruvian heavy cargo carrier drivers affiliated with the National Union of Transporters and Drivers (GNTC) joined a nationwide strike that commenced in March. The strike was called to protest against soaring fuel costs, which are reportedly impacting the financial sustainability of the transport cargo sector nationwide, with many employees at risk of unemployment as a result. The overall aim of the protests is to build a solution with the Peruvian government to stabilise fuel prices by reducing taxes or providing subsidies. In addition to a significant rise in fuel costs, truckers have been hit with a tax on cargo vehicles, further worsening the current situation.
The protests have caused large pile-ups of vehicles, resulting in road closures and travel disruption on several highway routes. Consequently, top food producers are struggling to transport perishable produce, including avocados and pomegranate, the top produced commodities in Peru. Additionally, producers have missed their reserved spaces on vessels, thus customers are expected to face delays to orders throughout April. According to the Association of Agricultural Producers Guilds of Peru (AGAP), the strikes have affected the entire agricultural export chain.
Avocados are just entering peak production season, therefore, the inability to export could limit shipments, potentially driving avocado prices higher over the 2021/22 season. This will be a watch-out factor moving forward. However, market participants are expecting a good supply of avocados this season, which should limit the growth in prices. Furthermore, there are positive hopes that this is only a temporary dispute, which provides optimism for the remainder of the season.
