François Bellivier, development manager of Capexo, describes the current avocado market as "very well oriented." "Prices are at record levels, 2-3 € [2.2-3.3 USD] higher, on average, than at the same time last year. We are at 14-15 € [15.3-16.4 USD] per avocado parcel on the Hass Vert market, compared with 12 € [13.1 USD] last year."
Decrease in Peruvian production
This favorable situation should continue for a few more weeks. "It will probably be a little tight in terms of supply for the next two months. This suggests that prices will remain at these levels." Reasonable quantities are expected, marked by the end of the Portuguese, Spanish and Moroccan origins and the decline of Israel, as well as an announced drop in Peruvian production. "We started with the Peruvian origin a few weeks ago. At the start of the season, the volumes were higher than at the same time last year, as the Highland season has benefited from good rainfall this year. However, when we switch to the production from the northern regions (Olmos, Viru and Chao), we might encounter a 20-30% drop in production and a 3-4 week delay in the start of the season. This is mainly due to the effects of El Nino."
Reduced supply of avocados over the summer period
Doubt persists as to whether June will see a peak in production. Several factors suggest that the summer period will be marked by a shortage of supply. "We already know that there will be very few large calibers from Peru. Peru also seems to benefit from a better American market, which will necessarily lead to fewer shipments to Europe. On the other hand, we are still faced with the same freight problems for Kenya and Tanzania. Tensions in the Red Sea have prompted the main shipowner Mærsk to use the Cape of Good Hope instead of the Suez Canal, which is considered too risky. As a result, it takes 10 to 12 days for the goods to reach Europe, which could have an impact on the quality of avocados and slow down importers' purchases."
Olympics-induced over-consumption of avocados this summer
Another unknown factor concerns the consumption trends induced by the Olympic Games taking place in France this summer. This unprecedented situation suggests an unusual over-consumption of avocados, a highly popular product for finger foods and takeaways.
The drop in Peruvian supply, the possible impact on quality of the Kenyan and Tanzanian origins due to longer freight times, and the unusual increase in consumption due to the Olympic Games, could offer other origins a great opportunity to gain a foothold on the French market. "Volumes from South Africa should increase by 10 to 12% this year. At the start of the season, there are very few large sizes, which is already leading to fairly high prices. The situation this summer should be favorable for South Africa, presenting a real opportunity to approach the French market at very good prices."
For more information:
François Bellivier
Capexo
Phone: +33 1 41 73 23 00
Mobile: +33 6 75 03 76 54
f.bellivier@capexo.fr
www.capexo.fr