Agricultural and Agri-Food Sector Profile - Guatemala

March 2015

Christine Luttmann
Trade Commissioner
Guatemala City, Guatemala

Produced by the Canadian Trade Commissioner Service

  • United States (US)
  • United States dollar (US$)
  • Gross Domestic Product (GDP)

Sector overview

Guatemala is the northernmost country in Central America, with over14 million people living in a 108,900 square kilometre area of land, and has the largest economy in the region, with a gross domestic product (GDP) of US$5,200 per capita.

According to the Ministry of Agriculture, Livestock and Food (MAGA), 26% of the land in Guatemala is fit for agriculture. Traditional crops are: vegetables, coffee, sugar, and African palm (the crops which generate more Jobs - rural area).

There are areas in the country, for example Almolonga, in Quetzaltenango, where 60% of the population works on growing vegetables, with daily sales of 250,000 pounds. Other important vegetable crops are broccoli (26,800 hectares), as well as carrots (3141 hectares) and cabbage (2214 hectares). Four years ago growers switched from crops for consumption (black beans and corn) to vegetables for trading.

The Southern region of the country is dedicated to sugar cane. One of the main employment generators in the country with 425,000 jobs. Represents 3% of the GDP. During the period 2013/2014 the production increased to 2,800 million metric tons of sugar. Main buyers of sugar are Korea and the United States.

Another example of the production in the North-West region of the country is Sololá, where they grow over 35,000 hectares of vegetables, 25,000 tons of potatoes, carrots, onions, cabbage, peas and tomatoes. As per data from the Ministry of Agriculture, Guatemala produces 1.2 million pounds of grains each year, in over 10,00 hectares. But this region also bases its economy in handcrafts and tourism (1.2 million tourists in 2014).

Guatemala has a livestock production of bovine, porcine, ovine and goats, poultry and rabbit. Also present are beekeeping (honey is also one of the important exports of the country), fishing and aquaculture (shrimp and fish) and, on a smaller scale, shellfish. The sector generates employment for 42.1% of the population, especially in the rural area, with a female participation of 29%.

The agricultural sector is still the most important economic activity in Guatemala, employing an estimated 32% of the labour force of the country. Most of the farmers still use the traditional system of slash-and-burn agriculture, mainly in shifting cultivation. This sector accounts for one third of exports of Guatemala.

Agriculture contributes 14% of GDP. Most manufacturing is light assembly and food processing. Non-traditional agricultural products have boomed in recent years, while more traditional exports such as sugar, bananas, and coffee continue to represent a large share of the export market.

Guatemala ratified the United States (US)-Central America Free Trade Agreement (CAFTA-DR) on March 10, 2005, and the agreement entered into force between Guatemala and the US on July 1, 2006. Canada and Guatemala's Free Trade Agreement (FTA) discussions are still ongoing. Guatemala also has FTA's with Panama, Mexico, the Dominican Republic, Taiwan, Colombia and Chile, and most recently an agreement with the European Union (EU). In addition it has partial free trade agreements with Cuba, Belize and Venezuela.

According to the Guatemalan Central Bank statistics (Secretaría de Integración Económica Centroamericana - SIECA), total Guatemalan imports and exports in 2014 were:

  • Total imports from the world US$ 11.8 billion
  • Total exports to the world US$5.6 billion

According to the same source, Agriculture and Agri-Food imports and exports for the same period were:

  • Agri-agrifood imports from the world US$ 1.84 billion
  • Agri-agrifood exports to the world US$ 3.18 billion

Canada and Guatemala two way trade

Total Imports and Exports: Canadian exports to Guatemala during 2014 (January to December) increased by 12%. Agriculture exports to Guatemala decreased 6%, the world economic situation, plus the advantage US products have with the existing Central America Free Trade Agreement (CAFTA) still has an impact in all Guatemalan imports, including agriculture and agri-food products.

Guatemalan exports to Canada also increased by 30% in 2014. Canadian agriculture exports represented 56% of the total exports in 2014.

Agri-Food

Guatemala has as many different sales outlets as Canada, including supermarkets, club discount markets, convenience stores, open markets (farmers' market style) and corner stores.

For the scope of this report, the Guatemalan food and beverage sector is defined as including anything you would find in a modern supermarket in Canada: fresh produce, fresh/frozen and packaged meat, poultry, fish and seafood, dairy products, all beverages, canned goods, breads and cereals, packaged baked and snack foods, pet foods, and consumer household products.

The largest supermarket chain in the region (Paiz-La Fragua) became part of the Wal-Mart Central America Group in 2006. Wal-Mart entered the region in 2005 and became Wal-Mart Centroamerica in 2006. In 2009, Wal-Mart Mexico acquired Wal-Mart's operations in Central America from Wal-Mart Stores, Inc. and two minority partners. Wal-Mart has 686 stores in the region: 32% in Guatemala and 32% in Costa Rica, the rest divided amongst the other countries with the exception of Panama and Belize. The other two dominant store formats in Guatemala are Price Smart and Unisuper.

These supermarkets target middle and high income customers; however, there are still ample opportunities in the retail sector, since only 30% of food sales are made through supermarkets.

Market trends

The market trends impacting the agri-food imports are marked by a strong growth in outlets, as described above. The changing habits among consumers, and increased brand awareness, due in part to the large integration of women to the workforce.

An interesting trend is the fact that Guatemalans have also followed the trend towards more natural and healthy products and consumers are demanding goods with less sugar, saturated fat and cholesterol. This is in part due to the fact that Guatemalan supermarket customers are accustomed to brands from the US, and have grown up with them and are used to the brands and different choices of imported food.

Present in the country are firms from the United States, Mexico, South Korea, Japan, Panama, Honduras, Costa Rica and El Salvador. The US has the majority share of Guatemala's agri-food import market, followed by Mexico. Guatemala produces a wide variety of consumer-ready products and can import products from other Central American countries duty free.

Mexico is a major exporter of cookies, cake mixes, beer, canned goods and snacks. Chile has become an important supplier of fruit, cookies, wines and canned goods.

Opportunities for Canadian agri-food products in Guatemala

There is a fair amount of Canadian brands presence in the country such as McCain and Cavendish. Other Canadian products represented include food franchises (Yogen Früz, and Marco Polo Gelato Fresco from Toronto), candy (for vending machines) and sugar-free candy, chocolate, and cookies (Voortman). Other products such as lentils, beans and chick peas can be found with private labels.

Available data from the World Bank reports, estimate that the 2013 retail sales of packaged food products in Guatemala reached US$4.6 billion, and that Guatemala remains the largest packaged food market in Central America. Forecast grow of the packaged food market is US$5.5 Billion by 2018.

The high growth categories in the forecast include snack bars, meal replacement, noodles, dried processed as well as canned/preserved, and chilled processed food, ready meals, sweet and savory snacks and soups.

Canadian government contacts

  • Embassy of Canada in Guatemala
    13 Calle 8-44 Zona 10, Edificio Edyma Plaza 8th. Floor
    Guatemala, Guatemala
    Tel. +011-502-2365-1253
    Email: christine.luttmann@international.gc.ca
  • Agriculture and Agri-Food Canada
    International Market Development
    Tel.: 613-694-2797
    Fax 613-759-7506
    Ottawa, Ontario K1A 0C5
    Email: vieiras@agr.gc.ca
  • Dial Singh
    Senior Desk Officer
    Central America and Caribbean Relations Division
    Global Affairs Canada
    125 Sussex Drive
    Ottawa, Ontario K1A 0G2
    Tel.: 343-203-3286
    Email: dial.singh@international.gc.ca
  • Sara Browne
    Trade Policy Analyst, Americas Division
    Market Access Secretariat
    Agriculture and Agri-Food Canada
    1341 Baseline Road, Tower 5, Floor 3
    Ottawa, Ontario K1A 0C5
    Tel. 613-773-0178
    Fax 613-773-1616
    Email: sara.browne@agr.gc.ca

Useful Internet sites

Sources of information

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