OVERVIEW GLOBAL AVOCADO MARKET

The avocado market is currently in a stalemate. Shortages are reported in Peru, the main supplying country, which results in an impact on prices. The ongoing corona crisis and the closure of food service establishments in many European countries are still an issue.

Belgium: Substantial shortages in the avocado market
There is a substantial shortage of avocados. According to a Belgian importer, there is a very low supply and shipments have been considerably delayed. The avocados currently available are arriving from Peru, and South Africa is about to start. Prices are quite high, but not extremely so. According to the importer, this is due to the closed catering industry. "We expect the supply to increase next week, but we won't be seeing any oversupply for the time being, because the new Peruvian harvest is also maturing at a very moderate pace."

UK: First easing of restrictions in hospitality sector noticeable
At the beginning of the year, the supply from Israel and Spain was underwhelming, which resulted in record prices. Despite starting early, Peru was still unable to fill this gap satisfactorily. Volumes are in line with last year's, reports said. The first large volumes from South Africa are expected to arrive around week 20. Kenya plays a rather marginal role due to its mediocre quality.

Percentage-wise, Peru plays the most important role in the summer months, with a 70% market share, followed far behind by South Africa (16%). Kenya and Colombia play a modest role, as do Brazil and Mexico.

The first easing of the restrictions in the hospitality sector seems to be bearing fruit, literally and figuratively, in view of the rising demand. Given the sunny weather and prospects of further easing, this trend should continue in May. However, as soon as the hotel and catering industry starts absorbing more volumes, retail sales will decrease slightly.

Morocco: Israelis invest in Moroccan avocado cultivation
A group of Israeli investors is about to launch a cultivation project in Morocco. This project - which has yet to be approved by the government - is reportedly expected to yield 10,000 tons of avocados for export to Europe per year. According to the Israeli newspaper Globes, the investors in question have reached an agreement with a local company, with which it has already worked in the past. A total of 455 hectares are planned to be planted. 

Spain: Early season closing
The Spanish season is drawing to a close. Production in southern Spain (about 90% of the total harvest) already finished three weeks ago, and Valencia only has some small volumes of Lamb Hass left to be harvested. In other years, the season would normally continue until the end of April or even mid-May. The early season closure has everything to do with the cold spring weather, which reduced the harvest volume in a situation of relatively high demand. 

Due to these circumstances, the Peruvian season started earlier. Only fruits with a minimal fat content can be properly shipped and ripened, causing shortages and consequently high prices. The on-going Ramadan has also contributed to this, experts report. Overall, the Spanish are looking back on a good avocado year with excellent crop prices and steadily growing consumption. 

Netherlands: Will panic cause price drops after good avocado market?
The avocado season is currently in full swing. In addition to the Colombian supply, Peruvian and Kenyan shipments are also at their peak. According to a Dutch importer, the demand is now starting to wane though. "The market conditions are still good at the moment, but a big drop in prices is expected. There is still a lot of volume coming in, mainly from Peru. Prices have stayed high for months, also because of the good demand from China, but now there is starting to be some panic."

Currently, the prices for the good sizes (4kg) from Peru still range between 11 and 13 Euro, while those from Kenya are traditionally a bit cheaper. "People don't dare charge anything extra right now because the market is expected to collapse for a while, especially for the small sizes. You always see this panic at the beginning of the season, but I hope that the market will recover after two or three weeks. Hopefully then we'll manage to keep prices at around 8 or 9 Euro."

Germany: Wholesale prices reach record highs
In the German wholesale market, avocado prices are slowly but surely reaching record levels. "Despite the falling demand due to the growing supply of summer fruits, the prices per package are soaring, ranging between 20 and 23 Euro for ready-to-eat Hass avocados. That's two Euro higher than around this time last year," reports one trader. This has everything to do with the severe shortages in Peru. In addition to Hass avocados, green ones (Fuerte) are also available. Again, the supply is limited, although slightly greater than that of the Hass avocados imported by air.

Italy: Avocado consumption has grown during the corona crisis
The Peruvian Hass season is now in full swing. "The first volumes are relatively small (18, 20 and 22), which makes them perfect for the Eastern and Northern European markets. In the domestic market, the most sought-after sizes are the 10, 12, 14 and 16, of which there is a limited supply. This situation is expected to continue until mid-May," said a Northern Italian trader. "Israel, Morocco and Mexico are almost completely off the market, and South Africa is now entering it with both green and Hass avocados."

Looking back, there was no difference in terms of consumption at the beginning of the crisis compared to 2019, reports a trader. "Gradually, however, consumption picked up and grew by as much as 500% in March this year. People see avocados as a superfood after all, and the Hass is the pinnacle in this regard."

South Africa: 'Off-year' for avocado exports
South Africa is having an 'off-year', with a total export estimate of 16.5 million 4 kg boxes. The early varieties between week 12 and week 20 will be sold smoothly, as Spain and Chile are off the market relatively early and an almost empty European market is expected.

From week 18 onwards, considerable pressure is expected on the European avocado market. There are rumors that Peru will again increase its total export volume this year, which traditionally causes prices to drop. This is also having an impact on South African exports, as Europe, including the UK, is the main destination.

Since the South African citrus season is also in the starting blocks, things could get tight as far as shipping containers are concerned.

Domestic wholesale prices currently stand at R13.33 (€0.77) per kilo, and the domestic demand is decent. 

Australia: Transition from Shepard to Hass 
The Shepard avocado season is almost coming to a close, as the variety is mainly marketed between February and April. After that, the Hass avocado harvest kicks off. Experts estimate the domestic Shepard production volume at 2.9 million packages this year, also in view of the weather and seasonal labor issues. The Shepard accounts for around 18% of the total avocado acreage, with the Hass still leading the way at 75%. 

Avocado consumption in Australia is rising noticeably, with a total consumption of 3.88 kg per capita. Experts expect further growth in the coming years. 

US: High demand for Mexican and domestic production
Currently, the bulk of the volume comes from Mexico. "At one point, there was some disagreement about the total volume. Some mentioned 1.256 million tons, while other sources spoke of a higher volume. Mexico managing to deliver 27,000-32,000 tons per week would roughly meet the US demand," reports a trader.

The domestic production from California is also on the market and is expected to account for around 15 percent of the total supply. About 20 percent has reportedly already been harvested, with a total harvest estimate of 132 million kilos.

The demand is currently relatively high; around 8-10 percent higher than last year. The price per package is lower than in March (around $37-38), with California's production once again reaching slightly higher prices.

China: Current market situation marked by price drop
With the approaching end of the Mexican season, a price decline has been observed in the Chinese market. The Peruvian season is still in the start-up phase, with smaller harvests and unstable quality grades coming from smaller plantations. From mid-May onwards, the high season is likely to get underway. 

Besides, China has some small volumes of Philippine avocados, which are usually of poor quality, with many spots on the skin. In March, the Chinese authorities allowed Californian air freight for the first time. Larger shipments are expected to enter the market in mid-June. The quality of Californian avocados is very high and the market demand has so far been excellent. According to traders, California has the potential to fill the gap between Mexico and Peru. Furthermore, the supply route is shorter compared to South America, which is quite an advantage. 

Until recently, the price of Chinese avocados was relatively high. Due to the higher volumes, prices are now slowly starting to fall. This week, the wholesale price for Mexican avocados dropped to 260 yuan per package (10 kg). 

Next week: Overview global asparagus market


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