Our outlook for Peru's agricultural sector remains positive. The livestock sector is very dynamic, and investment into the country's ethanol sector is boosting sugar production. Export crops such as coffee and cocoa are hampered by a lack of infrastructure and investment, but there is scope for strong growth in both, particularly as Peru is becoming increasingly recognised for organic and speciality crops. We caution that a lack of profitability threatens to weaken the dairy sector; this could be further exacerbated by the entry into force of the free trade agreement with the EU. The country is set to ben efit from cheaper food imports owing to the lower price of grains as well as the weakness in the Argentine peso, from where it imports a great deal of its grain.