B. DATA ON BEST PROSPECTS FOR AGRICULTURE AND INDUSTRY SECTOR EXPORTS 1.MATRIX OF BEST PROSPECTS FOR AGRICULTURE SECTOR EXPORTS (US$ millions, unless otherwise noted) A. Rank: n/a B. Name of Sector: Wheat C. ITA or PS&D Code: 0410000 1992 1993 1994 D. Total market size (000 MT) 170 219 236 E. Total local production (000 MT) 0 0 0 F. Total exports (000 MT) 0 0 0 G. Total imports (000 MT) 174 256 249 H. Total imports from US (000 MT) 125 167 152 I. Exchange rate Comments: The above data are on a July/June marketing year basis. The indicator years specified above correspond to the first year of the split marketing year. Honduran wheat consumption and imports increased dramatically during 1993 due mainly to increases in both human consumption and feed use. The United States is the main supplier of flour grade wheat to Honduras, primarily through the PL-480, Title III program and the Export Enhancement Program. However, imports of feed grade wheat from the EC and Canada have been growing largely at the expense of U.S. corn imports, which are subject to a higher duty. Much of the same import patters are expected to continue during 1995. A. Rank: n/a B. Name of Sector: Preparations for manufactured beverages C. ITA or PS&D Code: n/a 1991 1992 1993 D. Total market size (MT) 1,192 1,398 2,890 E. Total local production (MT) 0 0 0 F. Total exports (MT) 0 0 0 G. Total imports (MT) 1,192 1,398 2,890 H. Total imports from U.S. (MT) 940 877 2,556 I. Exchange rate Comments: Preparations for manufactured beverages have always been one of Honduras' chief agricultural imports items. According to data from the Central Bank of Honduras, this market totalled $22.5 million in 1993, with the United States supplying 92 percent of total import value. This market is expected to continue to expand in the near future by at least 5 percent per year. A. Rank: n/a B. Name of Sector: Soybean Meal C. ITA or PS&D Code: 0813100 1991 1992 1993 D. Total market size (000 MT) 40 47 53 E. Total local production (000 MT) 15 15 15 F. Total exports (000 MT) 0 0 0 G. Total imports (000 MT) 25 32 38 H. Total imports from U.S. (000 MT) 25 32 38 I. Exchange rate Comments: Rapidly growing poultry, shrimp, and swine sectors in Honduras have triggered a growing demand for soybean meal. Local processing of soybeans imported from the United States accounts for approximately 95 percent of local production. Imports of soybean meal have traditionally been sourced from the United States and this pattern is expected to continue in the future. A. Rank: n/a B. Name of Sector: Tallow & Grease C. ITA or PS&D Code: 4113200 1991 1992 1993 D. Total market size (MT) 7,494 11,350 7,994 E. Total local production (MT) 550 560 560 F. Total exports (MT) 0 0 0 G. Total imports (MT) 6,944 10,790 7,434 H. Total imports from US (MT) 6,944 10,549 7,168 I. Exchange rate Comments: The Honduran market for inedible tallow has proven to be a steady one for the United States. Traditionally, the United States has supplied virtually 100 percent of Honduras' tallow import needs. Local production of high quality tallow necessary for soap production is very small. Soap is also produced from locally produced palm oil. Tallow import levels ranging from 7,000 MT to 8,000 MT are expected for 1994 and 1995. 2. MATRIX OF BEST PROSPECTS FOR INDUSTRY SECTOR EXPORTS A. Rank of Sector: 1 B. Name of Sector: ELECTRICAL POWER SYSTEMS C. Three-letter ITA Industry Sector Code: EPS 1993 1994 1995 D. Total Market Size (USD 000's) 10,213.0 50,500.0 65,300.0 E. Total Local Production (USD 000's) 0.0 0.0 0.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 10,213.0 50,500.0 65,300.0 H. Imports from the US (USD 000s) 6,563.9 35,600.0 45,900.0 I. Exchange Rate (Lps to USD 1.00) 6.70 8.25 11.00 J. Comments: Honduras is facing a severe electric energy crisis because of difficulties at its main source of energy, the Francisco Morazan Hydroelectric Project. The National Electric Power Company (ENEE) is in the process of refurbishing several diesel and gas powered electric generation plants and will privatize generation of electricity in the future. At present, ENEE is tendering for the private generation and supply of 75 MW. The contract will probably be awarded in August 1994. A. Rank of Sector: 2 B. Name of Sector: COMPUTERS AND PERIPHERALS C. Three-letter ITA Industry Sector Code: CP 1993 1994 1995 D. Total Market Size (USD 000's) 22,497.3 25,197.0 27,716.7 E. Total Local Production (USD 000's) 0.0 0.0 0.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 22,497.3 25,197.0 27,716.7 H. Imports from the U.S. 20,438.5 22,891.1 25,180.2 I. Exchange Rate (Lps to US$1 6.70 8.35 11.00 J. Comments: Growth in this sector will be driven by an increase in the number of local commercial banks, as well as by a drive to modernize by local firms. The market for used personal computers, mainly those based on Intel's 286 and 386 micro processors, also continues to be strong. A. Rank of Sector: 3 B. Name of Sector: AUTOMOTIVE PARTS AND SERVICE EQUIPMENT C. Three-letter ITA Industry Sector Code: APS 1993 1994 1995 D. Total Market Size (USD 000's) 46,492.3 53,466.2 61,486.1 E. Total Local Production (USD 000's) 0.0 0.0 0.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 46,492.3 53,466.2 61,486.1 H. Imports from the US (USD 000s) 22,817.8 26,240.5 30,176.5 I. Exchange Rate (Lps to USD1.00) 6.70 8.35 11.00 J. Comments: An ageing car population, as a result of economic hardship and limited consumer purchasing power, continues to fuel demand for automotive parts and accessories in Honduras. Local importers and distributors of these products prefer to buy them directly from U.S. based suppliers. The automotive parts aftermarket is one of the most promising subsectors. A. Rank of Sector: 4 B. Name of Sector: MEDICAL EQUIPMENT C. Three-letter ITA Industry Sector Code: MED 1993 1994 1995 D. Total Market Size (USD 000's) 6,313.6 7,197.5 7,917.3 E. Total Local Production (USD 000's) 0.0 0.0 0.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 6,313.6 7,197.5 7,917.3 H. Imports from the US (USD 000's) 2,914.0 3,351.1 3,686.2 I. Exchange Rate (Lps to USD 1.00) 6.70 8.25 11.00 J. Comments: The main forces driving the local market for medical equipment include the Government of Honduras' regional hospital program and the modernization of private hospitals. A. Rank of Sector: 5 B. Name of Sector: TOOLS: HAND AND POWER C. Three-letter ITA Industry Sector Code: TLS 1993 1994 1995 D. Total Market Size (USD 000's) 6,664.4 7,464.1 8,359.8 E. Total Local Prod. (USD 000s) 1,735.3 1,874.1 2,099.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 4,929.1 5,590.0 6,260.8 H. Imports from the US (USD 000's) 1,672.5 1,996.8 2,236.4 I. Exchange Rate (Lps to USD 1.00) 6.70 8.35 11.00 J. Comments: Demand for products in this sector continues to be fueled by strong growth in the agricultural, forestry, and wood processing sectors. A. Rank of Sector: 6 B. Name of Sector: AGRICULTURAL MACHINERY AND EQUIPMENT C. Three-letter ITA Industry Sector Code: AGM 1993 1994 1995 D. Total Market Size (USD 000's) 23,945.6 25,603.3 27,356.4 E. Total Local Prod. (USD 000's) 1,850.0 1,961.0 2,059.1 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 22,095.6 23,642.3 25,297.3 H. Imports from the US (USD 000's) 9,601.1 10,273.1 10,992.2 I. Exchange Rate (Lps to USD 1.00) 6.70 8.35 11.00 J. Comments: Honduras continues to strengthen its position as the main producer of agricultural basic grains in the Central American region. The Government of Honduras is placing strong emphasis on basic grains production and has agreed on a program of price incentives with the largest agricultural operations in the country for that purpose. A. Rank of Sector: 7 B. Name of Sector: BUILDING PRODUCTS C. Three-letter ITA Industry Sector Code: BLD 1993 1994 1995 D. Total Market Size (USD 000's) 248,614.2 226,893.7 271,173.2 E. Total Local Prod. USD 000's) 227,675.3 204,907.8 245,889.4 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 20,938.9 21,985.9 25,283.8 H. Imports from the US (USD 000's) 8,373.6 8,792.3 10,111.2 I. Exchange Rate (Lps to USD 1.00) 6.70 8.35 11.00 J. Comments: While the construction sector in Honduras is expected to grow at a very slow pace in 1994 as a result of an economic recession, construction activity is expected to accelerate by the second half of 1995. This growth will be driven by an ambitious low- cost housing program that will be executed by the Carlos Roberto Reina administration, including the construction of about 20 thousand new homes for low-income families. A. Rank of Sector: 8 B. Name of Sector: FOOD PROCESSING AND PACKAGING EQUIPMENT C. Three-letter ITA Industry Sector Code: FPP 1993 1994 1995 D. Total Market Size (USD 000's) 10,434.8 11,165.2 12,281.8 E. Total Local Production (USD 000's) 0.0 0.0 0.0 F. Total Exports (USD 000's) 0.0 0.0 0.0 G. Total Imports (USD 000's) 10,434.8 11,165.2 12,281.8 H. Imports from the US (USD 000's) 6,392.9 6,840.1 7,524.1 I. Exchange Rate (Lps to USD 1.00) 6.70 8.35 11.00 J. Comments: The Honduran food processing industry continues to grow as a result of export incentives from the Government of Honduras and the availability of raw materials for processing.