GLOBAL OVERVIEW AVOCADOS

Avocados remain as popular as ever across the globe, with most markets for avocado remaining generally stable in terms of sales, despite continued logistical issues and higher costs. Some are even performing better than usual, with France seeing an unusually balanced market for this time of year. There are concerns that the ongoing Russian invasion of Ukraine will create an oversupply, as some countries will not be supplying Russia this year. In Spain, the expected price increase at the end of the season has failed to materialise, which is unfortunate for those who held onto supply for this reason. On the production side, there have also been some concerns in various regions. Mexico is much lower on avocados than usual, and in Italy, changes to the climate have caused a lower production, a cause of concern for many growers. Meanwhile, Australia has had a rather positive season despite a lower supply, as an increase in value for the avocado has more than made up for this drop in production.

The Netherlands: Avocados in great supply, good sales, but prices under pressure
While many fruits are currently at good prices, that does not apply to avocados. "There is sufficient supply on the market at the moment. South Africa is sending both Greenskin and Hass avocados, there is sufficient supply from Peru and there are also many Kenyan avocados on the market. As a result, prices are under pressure. With the Easter weekend ahead, the sales are going well, but the prices are under pressure," says a Dutch importer.

Germany: Good supply, stable demand
Avocados are currently offered mainly from Peru, Spain and Israel. In addition, there are the first small shipments from Chile. According to one wholesaler, the favourable supply situation has led to slight discounts in recent weeks. The Peruvian campaign has only just started, and larger quantities and correspondingly better qualities are not expected until two weeks from now. The supply from Israel and Spain, on the other hand, is gradually running out, although the shipments there are still characterised by a high fat content and excellent fruit quality.

The situation in terms of logistics and transport remains difficult with correspondingly high freight rates. There are bottlenecks with certain products, but the supply of avocados has been maintained so far. Despite the traditionally strong demand for asparagus and berries, the demand for fruit such as mangoes and papayas was somewhat higher at Easter, but the marketing of avocados was rather stable.

France: Unusually balanced market in run up to Easter
In France, the avocado market is rather balanced compared to other years as Easter approaches. This is partly due to the fact that the supply of avocados from Spain and Israel is still present, whereas in previous years it was nearing its end. With this increase in the production of Mediterranean species on the market this winter, the promotions in stores are therefore interesting for consumers, which boosts consumption and allows exporters to offer a good quality product. There are currently a number of origins on the market such as Spain, Morocco, Israel, Chile, Colombia, Peru, South Africa, Kenya, Tanzania, Guatemala and Portugal. According to the WAO, France is still the first European consumer of avocados in volume, with 3,1 kg/inhabitant.

Italy: Climate change affecting domestic production of avocados
The market for Hass avocados (already ripe and ready to eat) in Italy has changed dramatically in recent weeks. A wholesaler in Bologna says that the war in Ukraine in recent weeks has caused a freeze on exports to eastern areas, so there has been a lot of unsold produce with prices down 40%. Then, in the last week, production in Israel and Morocco has almost finished, Spain only has fruits for internal consumption and production in Sicily has little impact in terms of volume. The result is that the price of ripe Hass has reached 4.20 Euro/kg, compared to half price of the other greenskin varieties. Consumption in this season is not very high, while it grows in summer.

A wholesaler in Milan says: "The greenskin varieties Fuerte, Ettinger and Zutano, mostly from Peru, are sold at around 10 Euro, while the Israeli Pinkerton is at the end of the season. Prices are on average lower than usual, partly because the quality is not great. The South African avocado season is starting and this will help a little in terms of the quality of the goods. For the Hass variety, on the other hand, the average prices are stable and higher: the green ones range from around 14-15 Euro at sale, up to 17-18 Euro for the premium ripe ones. Consumption is sparkling.”

It has been a difficult production season for Southern Italy, due to climate changes that are affecting the avocado crop, mainly in the first three months of the year. The fruit suffers from temperature changes. Harvesting of the Sicilian avocado will continue for another month, with the Hass variety of sizes 16 and 18. In general, the size of the fruit has been non-homogeneous throughout the season, mainly medium-small. Prices have been lower, compared to last year.

Spain: No price increase towards end of season for first time in 15 years
Producers continue to harvest Hass avocados in Malaga on rather unusual dates, as the harvest should have finished weeks ago. There is still about 15% of the production left to be harvested, as from January, many growers have been waiting until the price went up, as always used to happen, although this year it has not happened for the first time in 15 years. This year's harvest has been 50% higher than last year and the average price has dropped by around 40 cents per kilo in the field. Many farmers have resisted harvesting at that price and those who have held the fruit longer than expected will have less harvest in the coming years because of the effects on the trees. In addition, because this harvest has been 'on' the next one will be an 'off' year, so production will most likely be much lower. On the other hand, for several weeks, the arrivals of avocados from Peru to the EU have continued to increase, and those figures already exceeds 300 containers per week. The Spanish Hass and Lamb Hass avocados will compete for one more month with Peru, which will set the prices and be much cheaper than the current Spanish product.

This year, the average price of Malaga avocados has fluctuated between 1.90 and 2.00 euros per kilo. Although it is true that prices have dropped this campaign and production costs have increased significantly, avocados continue to have a high profitability compared to other crops according to one producer. Although the supply has been below demand for all these years, this is the first year in which a greater balance is beginning to be seen, due to the increase in production in various countries, such as Morocco, Portugal, Brazil, Peru, Kenya, Colombia, etc…The greatest concern in this sector in Malaga is the water shortages and the ability to keep up the subsistence of this crop over the coming years.

China: New ripening centres opened in Shanghai and Guangdong
There are eight production areas in the world that currently have market access to export avocados to the Chinese market, including: Peru, Chile, Mexico, New Zealand, Colombia, California, Philippines, Kenya. Combined, these eight production areas provide year-round supply. Chinese consumers look for high quality avocados, with a moderate sweet and sour flavour. Favourite packaging options are environmentally friendly plastic boxes, degradable carton and mesh bag packaging. New ripening centers have been opened in Shanghai and Guangdong.

Partly due to the outbreak of COVID-19, people are paying more attention to food safety and health. Foods that are high in nutrients are becoming more popular. Then again, Chinese consumers are used to preparing and eating warm, cooked food. However, many younger people and office workers do not like to spend a lot of time cooking and preparing meals, which makes ready-to-eat dishes, and cold dishes, a new trend on the market.

The instability of shipping schedules, high freight costs, and market and economic uncertainties are all challenges to the market.

South Africa: Potential oversupply on European market puts pressure on greenskin prices
The avocado crop estimate in South Africa remains at 15.5 million 4kg cartons with between 25% to 30% exported, and sizing reportedly slightly smaller than last year.

Israel’s season ran longer than usual, so the European market was fuller than normally, but Hass prices are now returning to normal and prices are lifting as volumes decrease. On the other hand, due to logistical constraints, South Africa was able to get to the market quicker than Peru which is usually the dominant player in the European avocado market this time of year.

Russia was an important market for South African greenskin avocados like Fuerte. Some exporters have taken a cautious approach and are not sending to Russia. A lot of that fruit will end up in Europe, where it’s already put greenskin prices under a bit of pressure.

Some of those who are still sending avocados to Russia are shipping to Rotterdam and from there taking it overland to Russia, or using other ports in Russia.

Local markets are fairly full as exporters are concerned about volumes in Europe and Russia not taking the avocados it normally does.

Around 80% of South African avocado exports leave from Cape Town, so the closure of the port of Durban doesn’t affect European exports, but it does have a negative impact on dispatching avocados to the Middle East.

North America: Unusually low supplies of avocados from Mexico
Supplies of avocados are tight currently as the industry heads into a typical promotional period for the popular fruit.

“It seems like fruit is moving into the higher altitudes and it’s harder and harder to find in Mexico. So the inventory has dwindled over the past week and a half and now there probably won’t be any harvesting or picking or packing for at least the next four days,” says one California-based shipper. “Everybody is scrambling looking for fruit the last couple of days, especially with Easter pulls and Cinco de Mayo. Pulls for that will be starting next week.”  

This kind of low supply from Mexico is unusual this year. “It seems like the crop is a little lower than anticipated. Normally there are good supplies for Cinco,” says the shipper.

Meanwhile California avocado growers reported recently that they’ve already harvested more of their crop this year compared to last year at this time due to market conditions and available supply. One avocado association notes that this year some customers transitioned to California avocados earlier than usual. Through March 7, growers had already harvested 40 million lbs. of California avocados--the association had projected about 6-8 million lbs. in the first two months of the year. “California growers this year are going to do very well,” says the shipper. “We had that shut down in Mexico for a week in February and that created a gap and California growers went out and filled that gap. Pricing for California fruit this year has been very good and I’d expect that to continue as well.”

Chile is also shipping fruit right now as is Colombia, though those volumes are more marginal comparing to the amount of fruit Mexico produces. “And Peru will show up mid to late May. I heard they were a little bit later this year than last year,” says the shipper.

All in all, U.S. consumers consume some 60-65 million lbs. of avocados weekly and the combined volume available right now is approximately 44 million lbs.

Of course, prices have spiked because of all this and currently are at least 80 percent higher than last year at this time. “And only having 44 million lbs. going into this promotional period, I’d expect pricing to last two to three more weeks like this, maybe even longer or into the summertime. It’s going to be tight.”

Peru: Peru plans to increase its exports again in 2022
Peru continues to increase its avocado production and its share of the global market. According to figures from the National Agricultural Health Service (Senasa), avocado shipments to international markets grew by 30% in 2021 compared to the previous campaign, exceeding 550,000 tons and far exceeding 1,000 million dollars.

This year a new growth of between 8 and 10% is expected in its industry, which, although it is less than that experienced in the previous campaign, is still considerable for the country that has already managed to be the second largest exporter of avocado to world level.

Based on the official records of Senasa, the Netherlands continued to be the main destination for this fruit for yet another year, receiving approximately one out of every three avocados exported by Peru, followed by Spain and the North American market, both with a share of over 16%; it also highlighted the important growth of Chile's participation, which amounted to 14%. As an exporter from the country already anticipated: "It is expected to continue to grow significantly, especially now that maritime freight is scarce and expensive."

Although maritime transport has not been the only challenge for Peruvian avocados at the start of the 2022 campaign. The protests in the land transport sector and the stoppage in its activity left their mark on Peruvian agricultural exports, drastically contracting them at the end of March/ start of April, and also affecting avocado shipments. In fact, the conflicts related to the carriers' strike, which most intensely affected the main avocado-growing region in Peru, La Libertad (whose fruit, according to figures, represents 38.5% of the export market), significantly reduced shipments at the beginning of the last week.

Australia: 13 percent increase in avocado value, despite 11 per cent drop in volume
Australia has transitioned from the Shepard avocado season to Hass, which is expected to continue throughout the different growing regions until early next year. The latest statistics showed an increase in the value of avocados in the year ending June 2021, with a 13 per cent jump to $488.7 million, despite volumes decreasing by 11 per cent to 78,085 tonnes. Export wise, Australia's peak avocado industry body is confident of growing opportunities for growers, particularly in the Japanese market, following a successful trade show in Tokyo in January.

Overall, for production in the 2021 calendar year, Hass volumes were a bumper crop, just like industry was expecting. According to an industry representative: "We did over 110,000 tonnes last calendar year, so that was a massive increase on the year before. So, there was a lot of pressure in the domestic market and some prices that industry hasn't seen for decades. It was a tough year, but in terms of our export markets, we were more price competitive, which allowed us to increase our share in a number of our markets".

Avocados in Australia sold for less than $1 each at certain stages of the season. Also, domestically, early in the year, flooding in Central Australia led to transportation issues when shipping the fruit domestically from Western Australia, right in the middle of their Hass season.

Meanwhile, The 2020-21 New Zealand avocado season produced a record export volume and total crop volume. 45,304 tonnes of avocados were harvested, with 4.8 million trays (5.5kg) exported to 11 export markets, an increase of 10 per cent from the previous season. 54 per cent of New Zealand’s avocado production came from the Bay of Plenty region in 2020 with 39 per cent coming out of the Northland.

Next week: Global Overview Pomegranates!


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