The Mintec price of US avocados has gone up by 34% to $3.68 per kg in the nine weeks to 21st April. This rise is primarily attributed to an increase in the price of Mexican avocados, supply tightness in California and an uptick in demand from the foodservice sector.
Mexico witnessed similar price movements and saw prices increase by 84% to $2.8 per kg over the same period. The rise in Mexican avocado prices can be largely explained by firm European and US demand. The interrelated price nature between the US and Mexico avocado market is apparent, with Mintec pricing data showing a strong positive correlation between the two countries over the last two years.
Meanwhile, the Californian avocado crop for the 2020/21 (Nov-Oct) marketing year is projected to be smaller than initially expected due to weather events. Earlier in the year, avocado production was estimated at 317 million pounds for MY 2020/21; it was recently revised down to 292 million pounds, significantly lower than the 2019/20 MY total of 360 million pounds.
Moreover, the gradual reopening of the economy and the foodservice sector has contributed to the bullish price impetus in the US avocado market over the last few months. Considering all this, the Mintec price of US avocados is projected to remain firm over the next few months, with most of the fundamentals pointing towards supply tightness.