OVERVIEW GLOBAL AVOCADO MARKET
The World Avocado Organization has designated November as the world's avocado month. The Netherlands has offered its capital for a whole month for this event, so Amsterdam is now becoming the "avocado capital of the world." Looking purely at the trends worldwide, avocados hardly need any promotion. The demand for the fruit is growing worldwide. Prices are stable and even show a slightly rising trend. Several countries want to benefit from this growth, so a lot is being planted. And yet there is still a promotional campaign planned in Europe for the spring of 2018 where the focus will be on tastings.
Mexican exports are declining
Mexico exported 722,000 tonnes of avocados between January and October this year. Last year, the export figure for the same period amounted to 784,000 tonnes, so exports are about 10% lower this year. This decline affects all destination markets, the most important being the US, Japan, Canada, Europe and Central America.
Mexican exports to China, Japan and Europe ground to a halt for a number of months. As a result, other production areas took their chance. A trader says that Peru and Chile, among others, are taking over these markets with "much better prices." He argues that this development and the figures that go with it must be closely monitored by the Mexican sector. Mexico must address all factors that cause the country to lose its competitiveness, as "they really want to maintain the dominant position of Mexican Hass avocados on the global market."
Colombia is also a strong competitor on the US market. In the coming years, Colombia will increasingly become a competitor to Mexico, alongside Peru and Chile.
Colombia: rising star in the avocado market
The first Colombian exporters started negotiations on exports to Asia, starting with China. Ultimately, the exporters also want to reach other countries on the continent, namely Malaysia, Japan and South Korea. According to an exporter, Colombian avocados are similar to the Mexican, which is currently preferred in Asia. "That gives us a big advantage over the Peruvian and Chilean avocados," says an exporter. The country is ready; the interest of Chinese importers has been awakened and all that remains is for the Chinese government to conduct the final verification operations.
Traditionally, the country focuses on exporting to European markets such as Spain, France, the UK, Germany and the Netherlands. Production has increased in recent years and this rising trend will continue in the coming years, so exporters are happy with the new markets. Also, avocados have been shipped to Dubai for the first time this year. It has been a small volume, just 24 tonnes, but the exporter is optimistic about this market. The Middle East is an increasingly important destination. Moreover, the first avocados have been shipped to Hong Kong. Colombia has about 15,000 hectares of young avocado trees that have not yet reached their maximum yield. The peak in the season is expected between October and December.
Brazil increases exports to Europe
The main market for Brazil is Europe. In 2017, a total of 280 containers have been shipped to this destination, and the prospect for next year is to reach approximately 360 containers. "This makes Brazil a player to be reckoned with in this market," argues a Dutch importer. Brazil is currently fully focused on Hass avocados. The green skin (Fuerte) is no longer planted or exported. Besides the Hass, the demand in Europe has also increased for the Tropical (Margarida) avocado.
The Brazilian season runs from March to September. "Between March and late May, we receive about 30 containers per week," says the importer. He has plans to have this volume expand to 40 containers per week in the future. "And with a transit time of 10 days to Spain and 15 days to Rotterdam, Brazil has many advantages in terms of logistics."
Brazil has the potential to expand annually by 200-300 hectares and already has 1,000 hectares in production for the market. "In the 2016/2017 campaign, a lot was invested in the quality of the avocados for the European market and customers are noticing that this has had a positive impact on the demand," he says. In addition to Europe, Brazilian exporters are also looking to the US and Asia for sales markets, but it will take some time before these processes are completed.
Peru is committed to growth
Due to the rapidly growing demand for Hass avocados worldwide, production has increased in recent years. According to the latest figures, 1,500 hectares of Hass avocados are planted annually in Peru. The acreage amounts to 28,000 hectares, with a large share planted with young crops. That area will only increase, giving exports a push. At the moment, plantings are underway mainly in the region of Olmos, in Lambayeque. Despite the fear of damage by El Niño, 230,000 tonnes will be exported this year. It is too early to talk about the next season, but the first prospects point to a 15% increase over this year's production.
This year, exports to China have doubled compared to 2016 and for the next season there is again talk of a doubling in exports. Furthermore, work is being done on access to the South Korean market. The US market accounted for 25% of exports this season, while it normally absorbs 20% of the production. Also, avocados have been shipped for the first time to India.
Chile is betting on China
In the 2016/2017 season, Chilean exports to China stood at 13,000 tonnes. This means that, according to one exporter, Chile has overtaken Mexico as the largest supplier. A few years ago, avocados were unknown in China, but the demand has increased enormously. According to an exporter's calculations, exports to China will reach 18,000 tonnes next year.
Costa Rica opens borders for Mexico
The problems surrounding the avocado supply from Mexico will soon be resolved. Since May 2015, there have been no Mexican Hass avocados available. Costa Rica closed its borders to Mexico because it feared the entry of the Sunblotch disease. The country also closed its borders to avocados from the US, Australia, Spain, Ghana, Guatemala, Israel, South Africa, Bolivia and Venezuela. In the proposed protocols, Costa Rica asks for a guarantee that the avocados won't come from a risk area. Additionally, the products must be inspected in the country of origin.
Dominican Republic dominant in green skin
Although the island has a large production, it is not among the top 10 largest exporters. Production is therefore mainly sold on the domestic market. The green skin avocados have a share of 85% of the production. As a result, the Dominican Republic has a strong position in the American market, despite 96% of the market being dominated by the Hass. There is a market for green avocados on the east coast, where most of the Caribbean immigrants live. The Dominican Republic has a 98% share of the US market when it comes to green skin avocados. From March, the country is in a monopolistic position because the season is then over in Florida.
US: huge demand during football season
There is a good supply of Mexican avocados. "Chile and Peru are not yet on the market, so Mexico will remain the only supplier until the beginning of 2018," says an importer. In his estimates, there is currently slightly more volume available than at this same time last year. This has to do, among other factors, with the expansion of the acreage. Every year, 65,000 to 85,000 new trees are planted in Mexico, according to the importer. The demand for avocados remains high during the football season. There is room for around 18.14 million kilos of avocados in the market.
The harvest of Hass avocados in California was disappointing, leaving more room on the market for Peru.
Australia adjusts prospects
Prospects initially pointed to the production reaching a record 75,000 tonnes, but this figure has now been adjusted downwards as a result of the early start of the storm season and a disappointing fruit setting. Avocados Australia expects a stable supply in the coming months. Volumes could decline in the first quarter of the New Year. Given the rising demand, prices are not expected to fall.
New Zealand sector is recording massive growth
The value of the New Zealand sector has risen in recent years to 200.3 million dollars. A year earlier, it was still 133.9 million dollars. The production stands at 7.8 million 5.5 kilo trays, or 43,375 tonnes. Of this, 4.7 million are exported and 2.1 million trays are intended for the domestic market. Exports are expected to increase further in the coming years now that New Zealand and China have signed a trade agreement and the export protocols have been drawn up. However, the main sales market remains neighbouring Australia, which accounts for 3.9 million trays. In Asia, Japan, South Korea, Singapore and Thailand are the most important destinations.
Avocado plantations in the country are being bought for very high prices and land is being reserved for new plantations. This trend can be observed mainly in the far north of the country.
Kenya: from coffee to avocado
A lot of money is being invested in cultivation in Kenya. Coffee and tea plantations are being transformed into avocado plantations. The growers have no problems getting trees and seedlings. The challenge is to harvest at the right time and keep the cold chain in check.
South Africa hopeful about next season
Last season was not the best for South African exporters, with 11 million boxes exported. The market was good, but the volumes were so small that hardly any profit could be made. This year was an "off year", which meant lower volumes. The drought in the country made the situation even more dramatic. Next year, it will be an "on year" again and South Africa expects a big harvest. Prospects point to a volume totalling 15 to 16 million boxes. The new harvest has yet to arrive, and growers hope that no natural disasters will happen until that time. Also, there is still plenty of investment in acreage expansions. A large producer expects to expand the acreage by 200 to 300 hectares every year over the next four to five years.
Morocco is trying to gain a foothold on the world market
This North African country is not the first one that comes to mind when it comes to avocados. The season runs from January to April. "This year we are optimistic that the volume and quality will be good," says a grower. There are some challenges. In some parts of the country there has been no rain, while in other parts the frost could take a toll on the harvest. Given the competition on the world market, it is difficult to gain a foothold in it.
Israel expects smaller volume
The season is not yet in full swing. The green avocado production has arrived first; then the Hass harvest will follow with small volumes. From January, both varieties will be readily available. The Ettinger is currently on the market with a price of 5 Euro in November. In the same month a year earlier, the price stood at 7 Euro. When the Pinkerton arrives, the price will go up to at least 10 Euro, according to an exporter.
Spain expects stable volume, but large calibres
The Spanish sector expects a similar production volume compared to last year; that is, between 45,000 and 50,000 tonnes, although calibres are expected to be larger. The season for the Fuerte is ending with high prices. The Hass harvest will kick off in a few days.
At the moment, traders have avocados from Chile, Mexico and Colombia available. In recent years, Colombia has become a serious player after companies from different countries have invested in cultivation there. The prices are good and stable this year. For the coming weeks, an increasing demand is expected, as the Holidays are getting closer. In the coming years, the market will continue to grow and avocados should become a commodity, just like apples and oranges. "I have recorded enormous growth in sales to Italy, France and Belgium," says an exporter.
Netherlands: Year-round avocado craze, but December still peak month
Although the avocado craze is there all year round, December is still the peak month for this tropical fruit. In recent months, the market has been recording a fairly stable development and it is expected to continue in this direction in the coming weeks, especially if Chile leaves the market. For the small sizes, prices currently reach around € 13.50 and the larger sizes are sold for up to € 14.50.
While the Chilean avocado season will come to an end in about a month, the Colombian and Spanish have only just started. The first Peruvian fruit is expected to hit the market at the end of January. This year, there will be an increase in the volume of Colombian avocados shipped to Europe. A not too large harvest is expected in Spain. According to importers, Colombia has also moved forward in terms of quality and has the potential to become an important player on the avocado market.
Germany: November is a calm month
In Germany, the Hass avocado is dominating the entire market. At the moment, this product is coming from mainly Chile, Peru and South Africa. Here and there, there is also some from Mexico and Colombia. Wholesale prices are reasonably stable, fluctuating between EUR 14 and EUR 16 per 4 kg box.
Traders admit that, with regard to demand, November is a calm month compared to September and October. The saturated market has lead to prices gradually dropping slightly over the last two weeks.
In Germany, the avocado is gaining popularity across the board. The population’s consumption per head has risen over the last two years from 250 to 640 grammes per year. This is still, however, considerably less that its neighbouring countries. In France, consumption is at 1,6 kg per person per year, in the Netherlands and Scandinavia, this amount is even more at about 2 kg. Organic avocados are also seen more often, and are keeping pace with the rising demand.
Belgium: high avocado prices
At the moment, avocado prices in Belgium are quite high. In September, the prices were a fraction lower. At the moment, the price per box stands at around 12-14 Euro. Little seems wrong with the quality of the avocados. Occasionally, there are some poorer quality Chilean batches, although those volumes are not significant.
At the moment, there is some supply from Spain, Colombia and Mexico. Most avocados come from Chile. A trader reports that the demand and supply around the Holidays should be fairly stable as long as nothing unexpected happens. The prices will therefore remain virtually the same. However, there is a shortage of green skin avocados, as a result of which their prices are slightly higher. Consequently, more Hass avocados are currently being imported to Belgium.
Little demand in Russia
The demand for avocados is currently very low, says an importer. Imports arrive from Kenya and other African countries, but there have been some problems with quality in the past. There are also imports from Israel, which offers better quality, but has a shorter season. At the moment, many Russians are in "survival mode" because of the economic situation in the country, especially now that the winter has started and the mercury is falling rapidly.
Publication date: 11/24/2017
Author: Rudolf Mulderij
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