Country Profile

Panama Country Profile

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Export Intelligence Video Series - Costa Rica, Honduras, Nicaragua, Panama

Market Overview

Focus Economics reported on May 19 that due to the COVID 19 pandemic the Panamanian economy will contract this year as domestic demand evaporates and the external sector suffers in the face of markedly reduced global economic activity and collapsing tourism.  The depth and duration of the impact on global trade flows as well as ballooning debt levels are the key risks to the outlook.  They project that the economy will contract -2.3% in 2020, which is up 0.1 percentage points from last month’s forecast, before growing 4.9% in 2021.

Over the past decade, Panama’s economy has been growing much faster than in other countries in the region.  Key sectors such as ports, construction, and transportation all enjoyed strong gains.  During this period, the economy was driven by private demand, the implementation of an ambitious public investment program, and the Panama Canal expansion project.  The economy’s performance led to a sharp reduction in poverty as well as a rapid fall in the debt ratio.  However, the pace of growth slowed somewhat in recent years owing to a drop in public investment and delays in the Canal expansion.

Panama can now claim the highest per capita GDP on a Purchasing Power Parity, (PPP) basis, in the region at US$25,500 (2020 Est.).   Growth is spearheaded by the transportation, telecommunications, and commercial and tourism sectors.  Panama's economy is based primarily on a well-developed services sector, accounting for about 70% of GDP.  Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, and flagship registry.

USDA’s Office of Agricultural Affairs, OAA, in Panama City, hereinafter referred to as “Post” reports Panama is one of the top markets for U.S. consumer-oriented products in Central America.  Each year Panamanian importers keep up with the food retail industry and new trends by attending USDA endorsed food trade shows.  In recent years, the consumption of more health-conscious food has significantly contributed to increased U.S. exports of consumer-oriented products.  These products had nutrient claims, such as low fat, low sodium, gluten-free, baked, and sugar-free.  In addition, an increase in dual-income households has resulted in a growing demand for ready-to-eat frozen and prepared foods.

Panama recognizes the clear link between free trade and competitiveness and seeks to join an elite group of countries that have achieved growth and development through trade.  Panama has Free Trade Agreements in force with Canada, European Union, (EU), Mexico, Colombia, Peru, Chile, Taiwan and Central America (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua).  Currently, Panama is negotiating a Free Trade Agreement with South Korea.

U.S. agricultural exports have been benefitting from the U.S.-Panama Trade Promotion Agreement (TPA), which entered into force on October 31, 2012.  Almost half of U.S. agricultural exports immediately received duty-free treatment, with most of the remaining tariffs to be eliminated within 15 years.  The TPA also provides duty-free access for specified volumes of some agricultural products through Tariff Rate Quotas (TRQs).

Law 41 of 2007 relating to Multinational Enterprises has enticed 156 companies from different countries to establish their regional hubs or headquarters in Panama, bringing in their executives and employees.  Examples of these companies are Dell, Maersk, ADM, Procter and Gamble, Caterpillar, Mars, Adidas, Nike, SAB Miller, among others.

Consumer-oriented food products continue to be the most important category of U.S. agricultural exports to Panama.  They totaled US$449.6 million in 2019, nearly 62% of the agricultural total and up 14.6% from 2018.  Panama is the largest export market in Central America for processed food products from the U.S., importing US$412.6 million in processed foods from the U.S in 2019, a growth of 5% and nearly 57% of the agricultural total.  Top processed food exports to Panama in 2019 included:

  • Food Preparations
  • Processed/Prepared Dairy Products
  • Non-Alcoholic Beverages
  • Beer & Wine
  • Snack Foods
  • Prepared/Preserved Meats
  • Processed/Preserved Vegetables & Pulses
  • Distilled Spirits & Other Alcoholic Beverages

Advantages and Challenges for U.S. Food Exporters in Panama


  • Shipping from the United States to Panama is easier as a result of the Panama Canal expansion.
  • There has been an increase in the cultural diversity of tourists and ex-pats coming to Panama each year. That includes increased immigration with permanent residence from Venezuela, Colombia, The Antilles, Asia, Europe, among others.
  • There is insufficient domestic production of agricultural products leading to a strong demand for food and feed imports.
  • Panama has a strategic geographical location and its service-oriented economy. Panama continues to strengthen its seaports and logistics assets (Panama Canal, seaports, airports, special economic zones, logistics parks, and railroad) over the next years.
  • There has been an expansion of store brands (private labels) among supermarket chains that use U.S. consumer-oriented imports. They are offered in most food and non-food grocery categories such as fresh, frozen, and refrigerated food, canned and dry foods, snacks, ethnic specialties and ready-to-eat prepared food.
  • Local importers frequently search for new-to-market products in order to compete. Big and small chains attend U.S. food trade shows to keep up with market trends and update their portfolios of food products.
  • Local retailers and distributors usually negotiate exclusive contracts with U.S. exporters.


  • China is expanding its influence across Latin America as Panama is looking to boost the re-exports of Chinese goods throughout the region. China is the world’s second most frequent customer to the Canal and the largest supplier to the Colon Free Trade Zone.
  • Recent governmental protectionist policies have been making importing food, beverages, and agricultural products more burdensome.
  • U.S. exporters are inclined to work with higher volumes and larger markets.
  • Supermarkets are offering store brands (private labels) that do not use U.S. consumer-oriented imports. Store brands are growing in popularity as they offer shoppers more selection, better value, and savings.
  • Strong competition in the following sectors: snacks and processed food (China and Central America), fruits (Chile, Mexico, and Peru), grains and oils (Argentina, Canada, and Brazil), meat (Canada), dairy products (Costa Rica, Argentina, New Zealand, and Australia).

“All of Food Export’s programs were a tremendous help getting us export ready, understanding the challenges that come with international business, and learning how to navigate them.”

Katz Gluten Free

Food Export-Northeast Participant since 2018

Interested in importing from U.S. suppliers?
Contact us to learn more.

Retail Sector

Euromonitor has estimated that the retail sales of packaged food products reached just over US$2 billion in 2019.  This also represents an increase of US$346.1 million or 20.5% from 2015.  They also forecast the packaged food market to grow to US$2.4 billion by 2024, an increase of US$466.6 million and 21.8%.  High growth categories in the forecast include:

  • Ready meals
  • Soups
  • Baked goods
  • Sweet Biscuits, Snack Bars and Fruit Snacks
  • Breakfast cereals
  • Ice cream and frozen dessert
  • Sauces dressings and condiments
  • Processed fruit and vegetables  

Post reports that (pre-COVID 19) modern food retailers have been improving in quality and convenience. Supermarkets, hypermarkets and independent food stores, which are most popular among consumers, primarily drive the grocery market in Panama.  Supermarket chains are increasing their presence by opening new stores in populated areas across the country and offering online grocery shopping and delivery services.  Store brands are becoming prevalent in these chains and allow retailers the opportunity to set themselves apart from the competition and offer customers more choice. 

Independent grocery and convenience stores are also transforming their store plans by strategically opening stores in more convenient locations—usually in local neighborhoods. There are approximately 11,000 of these independent grocery and convenience stores in Panama. There are also mini-convenience stores (conventional sized stores with expanded foodservice) and hyper convenience stores with an extensive variety of product offerings and in-store seating for foodservice.  Pharmacies have also leveraged their small size, convenient locations and proximity to consumers to offer more consumer-oriented products such as canned and dry food, snacks, dairies, ethnic specialties, wide selection of fine wine, beers and spirits, and pet food.

Supermarkets are led by the two largest supermarkets in the country, Super 99 and Supermercados Rey, with other supermarkets such as Super X-tra offering lower prices to serve their less affluent consumers, and supermarkets such as Riba Smith and Super Kosher offering more variety in value-added foods. Supermarkets, hypermarkets, and independent food stores, which are most popular among consumers, primarily drive the grocery market in Panama.  

Euromonitor reports that modern grocery retailers remained very popular and recorded positive growth in 2019.  This is viewed as a positive performance given the ongoing shift of affluent consumers towards e-commerce, with a growing number seeking convenience by having the goods delivered to their homes without the need to visit stores.  Much of this change stems from the growth of technology and the spread of the internet in the country, especially as Panama has considerable mobile phone penetration.

Best Product Prospects

In recent years, Panamanians have consumed more convenient and healthy foods.  This has increased prospects for U.S. food exports and created higher import demand in the following categories: low fat, low sodium, gluten-free, sugar-free, fresh fruits (such as apples, grapes, peaches, and pears), organic foods, processed fruits  (especially canned fruits), snack foods (including corn chips, popcorn, cookies, and candies), processed and canned vegetables (especially canned mixed vegetables, yellow sweet corn, peas, mushrooms, and garbanzo beans), and frozen processed products (such as pizza and ready-to-eat foods).

Food Service Sector

Post reports that the supply chain for the foodservice industry is being disrupted by the coronavirus pandemic.  The sudden and ongoing shutdown of most economic activities in Panama to address the coronavirus (COVID-19) pandemic has battered the Hotel, Restaurant and Institutional (HRI) sector.  Industry representatives say they understand the public health needs but warn that many businesses may not recover from the pandemic without the government’s help.

For more than 50 years, international foodservice operators and local companies, such as Sysco, H.T. Tzanetatos, Proserv, Procesadora Monte Azul, have been servicing the foodservice sector.  They have been importing U.S. food and beverages, providing logistics in warehousing/transportation, and promoting product sales and marketing. When the pandemic struck Panama in March, these institutions and facilities were among the strongest in the country.  They serviced fast-food franchises, cafes, bars, bakeries, ice-cream shops, family-owned restaurants, food trucks, street-side vendors, convenience stores, and catering services, all of which have been drastically affected by the current measures to stop coronavirus (COVID-19) from spreading.  At this time, many businesses are closed or operating at a severely scaled back level.  Food services distributors are operating with only 40% of their staff.

The hotel industry in Panama was one of the first sectors to experience the fallout from the spread of coronavirus.  Panama City hotels, which account for 20,000 rooms, have seen hotel occupancy rates plunging to below 40%.  Many U.S. and international hotel and resort chains are present in Panama, including the Waldorf, Hilton, Marriott and J.W. Marriott, Bristol, Country Inn, Sheraton, Radisson, Holiday Inn, Intercontinental, Riu, Westin, Wyndham Garden, Novotel, Hard Rock Hotel, Hotel Las Americas Golden Tower and Tryp Hotel.

In Panama, hotels and resorts primarily purchase from foodservice companies and/or directly from distributors, supermarkets and restaurants.  Many hotels have announced temporary closures hoping to reopen at the end of May.  Those temporarily closing their doors include the international chains of RIU, Hilton, W Hotel, and Marriott. Hotels’ web pages are communicating about their cancellation policies and other information related to the coronavirus.  Some hotels have offered their now vacant hotels rooms for use by local hospitals.

Ship handlers and foodservice distributors from international cruise lines docking in Panama are also adversely affected.  So far, 35 cruise ships have canceled scheduled transits through the Panama Canal.  Of the 258 cruises expected for 2019 season, 209 transited the Panama Canal before the coronavirus crisis.  The ship management firm, Pullmantur has suspended operations in the Caribbean until at least May.

Only 15% of restaurants remain open and those are only providing delivery service, The Restaurants Association of Panama calculated $76 million in lost already.  All bars and discotheques are closed due to prohibition of sale and consumption of alcohol beverages for the duration of the state of emergency, based on the article 7 of Executive Decree No. 507 of 2020. (Source: Panama America newspaper March 31, 2020).

McDonald's Panama (with over 60 locations nationwide) has closed its operations temporarily.  Franquicias Panamenas, a company with one of the largest portfolio of fast-food chains in Panama (KFC, Pizza Hut, Taco Bell, Dairy Queen and Chili’s), has temporarily closed it operations as well.  The restaurants that are still open are offering only delivery service.  Other restaurants reinvent themselves: Restaurants that still in operation are selling gift cards to promote future consumption “apoya hoy y Disfruta luego” (Support today and enjoy later”). Casa Bruja (Brewery), Anti Burguer, VSweet and Amano has formed a temporary joint venture to deliver menus and promote gift cards.

Best Product Prospects

During stable times Post reports that high-value products offer good market opportunities in Panama, especially ready-made or convenience food, wholesome and healthy products.  A list of favorite imports from the HRI sector includes pre-cooked potatoes, snacks, frozen or ready-made food, seafood, cheese, vegetable oil, frozen vegetables, condiments and dressings, and margarine.

Food-Processing Sector

Panama’s food processing industry has experienced a 12% annual growth rate over the past five years. Two forces that contribute to opportunities in this area are the U.S. – Panama Trade Promotion Agreement (TPA), and capacity building programs offered by USDA to the Panamanian industry on food safety inspection and quality.

With 150 food-processing companies, Panama’s food processing ingredients market accounts for US$135 million in U.S. exports about a 60 percent market share. These companies include dairy processors, meat and poultry products processors, fishery products processors, fruits processors, beverages and spirits, bakery, snacks, pet food among others.

Panamanian consumers are demanding more convenience and healthy food products. This trend has resulted in good prospects for U.S. exports of fresh fruit (mainly apples, grapes, peaches, and pears), organic foods, healthy food products such as gluten-free, low carb, low sodium, low sugar, low fat, processed fruits, and vegetables (especially canned fruits), and snack foods (including corn chips, popcorn, cookies, and candies). Processed canned fruits and vegetables, especially mixed fruits, mixed vegetables, yellow sweet corn, peas, mushrooms, and garbanzo beans generate strong import demand because most of these food products are not processed locally.

Poultry is the top source of protein in the Panamanian diet. Pork is Panama’s second favorite meat.  Beef is typically found in supermarkets fresh and chilled.  Consumers prefer fresh meat over chilled.  Chilled beef tends to be imported as specialty cuts that are more expensive and used for BBQ and parties. Imported processed meats, mainly from the United States, and cured hams from Spain and Italy, supply the Food Service sector. Most processing is done for seafood products.

The processed food sector in Panama is price sensitive, and companies try to keep prices low in order to stay competitive.  Market competition comes from large local food processors that carry increasingly modern and developing lines of Panamanian food products.  Companies like Riba Smith, Bimbo de Panama, and Nestle are local competitors for U.S. exporters, but also represent opportunities in terms of imports of raw materials and ingredients for their processing.

Large multinational companies have a competitive advantage over smaller domestic producers in certain product categories such as frozen foods, soups; specialty canned and preserved products, and well-known condiments and flavors that cater to the international pallet.  Because of this, companies able to meet the demands of this competitive processed food sector must have the means to invest in technology and innovation to not only meet consumer demands but also maintain low, competitive prices.

Best Prospect Products

Post reports that Panama is the third-largest market in Central America for U.S. agricultural products exports.  U.S. total exports of agricultural and related products to Panama totaled US$758.8 million in 2019.  Exports include corn (US$88.9 million), soybean meal (US$13.4 million), prepared food (US$55.8 million), dairy products (US$57.7 million), and pork & pork products (US$46. million).  Best market prospects are dairy products, pork, poultry, and snack foods.

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