"Global avocado prices will standardise"

For a few years, the consumption of avocados has been soaring worldwide, as reported by Celso Castillo, sales manager of Promega (Promotora Mexicana Gaitan), a company that exports avocados from Mexico to North America, Europe, Japan and Asia. He believes that demand in the European market in particular has increased so much that it can no longer be stopped. "There is a consolidated market," affirms Celso Castillo. He also notes that regular avocado consumers are already convinced about the fruit's properties, which, added to the decline in global supply, has meant that the continent was willing to pay a little more for the avocados.

"Global Hass avocado consumption is growing at a rate of 3% annually, and production in all countries is only expanding by 2% annually," he explains. "There is a deficit of 1% compared to the increase in international demand, which all growing countries put together are unable to meet." Because of this greater demand than supply, they are not too worried about competition. Furthermore, he believes that El Niño and other weather phenomena will affect the production of many countries, reducing supply.

Nevertheless, Celso Castillo argues that Mexico has a great future ahead. "Mexico stands out for its huge production capacity and will play a key role in the future of the avocado industry," mostly because of the physiological characteristics of Hass avocados together with the country's meteorological and geographical conditions, namely its abundant rainfall, climatic diversity and wide range of altitudes at which fruits can be grown. "Mexico has avocado plantations from 1,400 metres above sea level to 2,400 metres above sea level." Thanks to this combination of different heights and temperatures, Mexico is able to produce all year round.

The price of the avocados exported to the U.S. has fallen in recent years, but it is not expected to drop anymore. Celso Castillo also sees a trend toward price standardisation worldwide, towards more stable and affordable prices during the entire agricultural cycle. "The market that will play the most determining role for the setting of the international price of avocados in the coming years will be the United States," he explains. "The U.S. imports avocados from all countries; it is a melting pot where it is possible to determine the 'right' international price for avocados."

He points out that, this year, both Europe and Asia have been able to buy avocados for the same price as the United States. "Historically, prices are always cheaper in Europe, Japan and Canada than in the United States; however, the European market has been able to match the U.S. prices this year." From this, he concludes that the European market conditions have improved and that the U.S. market has lowered its prices, while they have substantially gone up in Europe, Japan and Canada, with the consequence of the aforementioned trend towards standardisation.

More information:
Celso Castillo, Sales Manager
Promega (Promotora Mexicana Gaitán)
T: (452)528-0332 Ext.# 116
F: (452)528-2069
M: (452)525-6322
E: celso@promegaupn.com
www.promega.com.mx