GLOBAL OVERVIEW AVOCADOS

There seems to be no stopping the rise in popularity avocado has been enjoying globally, with consumption in Italy even predicted to double. Some countries, however, have noticed an oversupply affecting prices at times, such as in the Netherlands and Australia, with the latter even having dumped some avocados due to this. Despite this, Australia is set to double its avocado production by 2026, and Spain is expecting a 20% larger harvest this year compared to 2020.

The Netherlands: Avocado market very difficult
The avocado market is very difficult at the moment, according to a Dutch importer. He blames the situation on too much supply from Israel and Colombia, combined with traditional difficult December retail sales, as this is when space is freed up for other items. Add to that the fact that in large parts of Europe the hotel, restaurant and food service industry is closed, and many importers are faced with a full stock and difficult sales in combination with low prices.

Germany: Tropical and Moroccan avocados on the rise
The Hass avocado is still by far the most popular variety on the Western European market. The Spanish season will start soon, the Moroccan season has already started in German and Austrian food retail. "Moroccan avocados are now increasingly finding their way to European consumers, whereas until recently they were mainly shipped under the Spanish flag," says one importer. The same applies to tropical avocados, such as Semil, which are particularly popular in the premium segment.

There is still growth potential for avocados on the German market. Although consumption is on an upward trend, it has been a difficult year. The ongoing Corona problem leads to great uncertainty in the exotic trade. While sales have gradually stabilised since the end of 2020, sea freight is becoming steadily more expensive, they confirm. In addition, there is a trend towards more delayed container deliveries due to the problems in global shipping.

UK: Retail sales increase due to end of lockdown
This summer saw increased volumes of avocados from Peru, this was due to a combination of new plantations coming into production and all the biannual nature of the trees. 

“There was an increase of around 20% on last year,” according to a UK importer. “This means we were able to extend our Peruvian supply into November before we moved on to the Chilean supply.” 

Supply into the UK and Europe is currently coming from Morocco, Mexico and there is a strong supply from Colombia. Demand is down in Europe at the moment because a lot of European countries are under stricter Covid restrictions with curfews imposed meaning people are eating out less. 

In the UK retail sales are down on last year when there were still some lockdown restrictions and more people were buying from the retailers. 

Shipping has not been too bad, and importers are now getting used to the delays but it does remain a challenge. Supply from South Africa was much better than last year and this meant less issues with quality on arrival. 

“Chile is a bit more complicated, as some containers were left on the quayside in Chile and not all vessels stopped at the port. Shipping in general has been less reliable, although the supply isn’t short.”

There will be a slight uplift going towards Christmas, but demand for avocados remains pretty stable. 

Italy: Avocado consumption in Italy predicted to double
In Italy, avocado has an ample potential for growth: per capita consumption is about one third of that of Northern Europe or the United States. Regular consumers of exotic fruits and avocados mostly buy it in large-scale distribution (71%). The greengrocer (18%) follows at a great distance.

In a few years, consumption in Italy is predicted to double: currently it is around 440 grams per capita, against an average of 1.30 kg per person in other EU countries. Typically, the most purchased fruit is the packaged Hass variety (92%; green variety 7%) of which packaged ones make up 52%.

An important player in the sector, who has recently created a 1000-hectare farm in Colombia for the sole cultivation of avocados recently spoke on this subject. In the last 12 months, this distributor producer has marketed about 6000 tons of avocados in Italy, but the growth prospects are considerable. Five years ago, the per capita consumption of avocados in Italy was 250 grams. Today it has reached around 440, with strong growth prospects.

In Italy there was an import of 25,000 tons per year; in the last year alone, sales increased by 67.4%. More generally, the Hass variety of avocado will record a compound annual growth rate (CAGR) of 4.8% during the period 2020-2025, making it the most popular variety in the world.

Spain: Up to 20% increase in avocado production compared to last year
The Spanish Hass avocado season goes on in Malaga with consistent volumes in what is expected to be a larger harvest compared to last season. The demand, however, has yet to take off in a market where many origins converge. For this campaign, avocado volumes could grow by around 20% in Spain as the around 4,000 new hectares planted in the last three or four years in the provinces of Cádiz, Huelva and Valencia are coming into production. Thus, Spanish avocado production could be around 70,000 tons. This year the avocadoes have a very good quality and mostly medium sizes, influenced by dry conditions.

According to an exporter, the demand has been so far quite irregular since he started the season a couple of weeks ago. On the one hand, although there are European retailers that have already started with Spanish avocados, others prefer to wait until January, since there is still a lot of supply from different origins, such as Colombia, Mexico –which is extending its campaigns more and more–, Chile or Morocco, which  has increased competition this year. In addition, Portugal is also producing more on its own. The supply is growing and consumption seems to be distributed more among origins.

On the other hand, according to the exporter, the new wave of coronavirus cases has also altered consumption parameters in the last two weeks, something that is reflected in sales after tightening restrictions in various countries. As a result, prices are around 10-12% lower than last year, getting closer to the averages of 4 years ago. Although it is still a product with good profitability, the sector has to face the fact that production and handling costs have increased by a 38% and everything indicates that they will continue to rise. The exporters hope that in the next few days consumption will stabilize and demand for avocado will increase a little.

Morocco: Focus on Dutch market
The avocado season in Morocco started in November and a good season is expected. Morocco exports 32,000 tons of avocados and half of it is just for Spain alone. The Moroccan season has already started offering the Fuerte variety since November. By mid-December, the Hass will be available and exporters will then start supplying their customers in the UK. The plantations are young and soon they will be in full production. Europe is very important for Moroccan exporters and the emphasis will be on the Dutch market this year, as they import 420,000 tons of avocados.

South Africa: Domestic prices more competitive than exports
At the moment South Africa’s late avocados from KwaZulu-Natal and the Western Cape are sold locally where prices are more competitive than for exports. South Africa’s avocado exports for the past season came to 15,172,246 of 4kg cartons.

The last export avocados were recently flown out but air freight prices have become “frightening” (says a subtropical fruit marketer) after this latest round of Covid-related border closures aimed at Southern Africa.

On the domestic market the price per kilogram is R23 (1.44 euro) and is supplemented by avocados imported from Spain and Israel.

In the early production areas in the north of the country the crop is looking good, gaining in size and showing good quality. In Tzaneen, though, the effect of hail will be felt in the upcoming season’s avocado crop, but in other areas like Levubu and the Lowveld growers are “cautiously optimistic”. An avocado grower from the earliest area, Levubu, far northern Limpopo, whose avocados start around late January, says they’re very excited about the upcoming crop, the weather has been perfect thus far and they reckon their crop might be 15% up on last year.

November is traditionally the month during which there is significant fruit drop in avocado orchards but growing regions have so far not experienced the heatwaves and concomitant fruit drop of other years. It has been a cooler than usual first half to summer. Producers have had to keep on their toes with their spraying programmes amid all the rain.

The first crop estimate will probably follow in early January.

China: Chaotic prices on Chinese avocado market
At present, the avocados in the China market mainly come from Chile, New Zealand and Mexico. There is a small amount of local Yunnan avocados on the market. The quality of the fruits on the market varies a lot, and the prices are relatively chaotic. The price of the fruit sometimes just covers import cost.

The early Chilean fruit of the new season arrived in wholesale market two weeks ago. The fruit that arrived came from a farm in northern Chile. Due to the early harvest, the dry matter content of this batch of fruit is not very high, the taste is not so waxy, and the fruit isn’t as oily. The strong cherry market has an impact on avocado sales. Especially near the holiday season, many Chinese consumers buy cherries as gifts when visiting relatives and friends. Many traders in the market have cherries as their current focus. This undoubtedly caused some impact on the sales of avocados.  

In recent years, the planting area of Yunnan avocados has become larger and larger, but because it has just started, the overall yield per mu is not very high, and the quality has not yet been able to compete with imported avocados. First because of the difference in variety. Most of the varieties grown in Yunnan are not the popular Hass varieties on the market, but varieties such as Pinkerton. Secondly, because Yunnan has just started planting, the technological level of planting is not very high, and there are still some shortcomings in terms of quality. The Chinese market therefore relies mainly on imports from New Zealand and Mexico.

Mexico was the first country to be allowed to export avocados to China. It has a wide range of production areas and large production, and it produces avocados throughout the year. Domestic consumers have a high degree of recognition of Mexican avocados. However, compared with other producing areas, the climate in Mexico producing areas is relatively humid, and the fruit peels produced are not very good-looking, and the fruit pulp has more moisture. After long-distance transportation, the skin may swell, which is not very beautiful. The Mexican season also has unstable shipping schedules this season. When the market is out of stock, Mexican fruit sells well and prices are high. The current price of avocado in Mexico is 100 yuan/carton (5.5 kg size).

The New Zealand season overlaps with Peru and the initial production season in Chile, and it is now nearing the end. In the past, many New Zealand avocados were distributed to the Japanese and South Korean markets. Due to the production volume and quality performance last year, many local orchards began to pay attention to the Chinese market, hoping to increase exports to China. Compared with Chile's production areas, New Zealand avocados started late in China, and the brand promotion is slightly less strong than other producing areas. The overall import volume is very small.

North America: US now open to second Mexican state for avocado export
One shipper of avocados out of Mexico says this week’s decision to allow avocados from a second Mexican state to be exported to the United States is a “game changer.” For almost 25 years, Mexico has been allowed to export avocados only from one western Mexico state: Michoacán. The second state is Jalisco.

“With Jalisco now open to the U.S., that could take the this production area out of two other markets which are Europe and Japan,” he says. He notes that worldwide avocado movement is a sort of delicate dance where different growing countries rely on a network of markets and this decision could affect other markets. “There’s going to be an adjustment commercially,” he says. He adds that Japan for example is fairly dependant on Mexico as a whole for avocados, but more so the state of Jalisco and that fruit from Mexico to Japan takes 15 days on the water. “That’s good timing for avocados to travel. But this decision for Mexico is a big step. As an industry we’ve always worked towards this decision.”

This decision comes at a time when Mexican avocado supplies overall are slimmer. “There’s definitely a shortage of avocados this year,” he says. Avocados are an alternate bearing fruit in which abundant years are offset by a less abundant one. “We’re at 70 percent compared to the crop last year. It’s about a 30 percent difference between last year and this year’s drop so I think we’ll have 10-15 percent left from our crop.”

While Mexico is by far the predominant shipping region, some fruit is coming from Colombia as well. Domestically, California, which is still determining its upcoming avocado season volume for 2021-2022, notes at this point it’s planning on a normal sized crop. This follows a season where early spring projections came out fairly close to the final avocado numbers for the California season at 264 million lbs.--this includes about 7 million lbs. of carry out from the 2020 season.

Meanwhile demand is fairly stable for avocados and he notes once January arrives, demand could strengthen with resolutions for healthier eating underway as well as the run up towards the Superbowl. He also adds that generally, consumption of avocados continues to grow annually.

All of this leaves pricing fairly strong currently. “Pricing is about 10-15 percent stronger than last year,” says the shipper. 

Australia: Avocado production expected to double by 2026
According to reports, Australian avocados are in abundant supply this year and great value. The fruit has been retailing for around $1-2 for several months, depending on the store and the location. “This year’s Hass crop is of excellent quality, and at this time of the year Australian Hass avocados are coming from the Western Australian and Tristate growing regions," says the CEO of a major avocado company. However, the large supply of avocados this season has not been all good news with reports that some growers have had to dump fruit due to the oversupply and prices dropping so low.

It comes as a recent online research survey conducted recently found that the majority of respondents would strongly prefer to buy avocados grown in Australia, than imported fruit. It found that 72 per cent of consumers rated purchasing Australian grown avocados as either “Very important” (34.11%) or “Extremely important” (37.81%) to their household - however, 55 per cent of consumers find it difficult to identify Australian avocados in store. The updated long-term forecast suggests Australia’s avocado production is expected to continue to increase to about 170,000 tonnes by 2026, more than double the 2020-21 crop, so domestic growers can easily supply Australian avocados to retail stores throughout the year.