Agricultural commodity market: Overview global avocado market

The global market for avocados is generally good, as the popularity of this fruit continues to rise across the board, with many countries seeing good prices for both locally grown and imported avocados.

In some areas, the rest of the season is still unpredictable, as hospitality reopens in the UK and countries such as the Netherlands hope that those missing holidays abroad this year will buy avocados as they remain at home.

In South Africa, however, the current unrest in many parts of the country and a lower harvest have caused a disappointing season.

The Netherlands: Good market for Greenskin avocados; larger Hass sizes under pressure
Hass avocados are not expensive at the moment, but a Dutch trader is not dissatisfied with the sales. “In any case, sales continue to be good, so that no huge stocks are built up. At the moment the market is changing a bit.

“Peru is in the market with many thick sizes and the last shipments they will send are expected to consist mainly of thick sizes as well. The prices are therefore at a low level, around 6 euros. The small sizes – from 22 upwards – are limited in availability and are becoming more expensive, too; they are now approaching 9 euros for 4 kg.”

The good market for Greenskin avocados also stands out. “That applies to all sizes actually. Because of the poor quality in Kenya, most growers are – wisely – choosing not to send any product. This limits the supply to some product from South Africa and Peru.

“Prices are at a nice level around 9-10 euros for 4 kilos. And Kenya’s second season only starts again in September. The summer period is traditionally a lot quieter for exotics and now that the first holidays are starting, it will only get quieter.

“The fact that fewer people will be going abroad may stimulate sales, but this summer there will be a lot less shopping. Fortunately, the small sizes have already started to recover and once Peru has sent the last batch, we can start the new season fresh,” concludes the Dutch trader.

Belgium: Strong prices despite higher production from Peru
Avocados are currently being imported from Peru. The quality, supply and for the time of year the price is relatively strong. Production in Peru is 30% higher than last year, but on the other hand there is a higher demand from Asia and Chile is also an outlier this year and is taking a lot.

Peru exports 140 trucks of avocados to Chile every week. Peru starts exporting Hass avocados from the end of March, beginning of April and there is some more price pressure on them now because the supply is higher.

However, the price has remained stable for quite some time and the increased production has not led to dumping prices like last year because the volume is spread over more markets.

The share of small fruits is lower. For climatic reasons, the dry matter of avocados in Peru lagged behind, so they had to stay on the tree longer, resulting in larger sizes. So the price of the smaller sizes is now higher than normal.

Chile will start shipping in mid/late August and good volumes are expected. Last year Chile had an off-year and the production was lower, this year the country has an on-year with sufficient production.

UK: Unpredictable demand for avocados as hospitality reopens with good weather
Peru and South Africa are the main avocado suppliers to Europe and the UK at the moment. This is the peak seasons from those countries. Peru is supplying 64% of the EU market, South Africa 14%, Columbia 10% and Kenya 7% (other sources 5%)

South African supply is consistent at the moment, after trouble accessing containers earlier in the season. The current riots taking place in the country are concerning and may affect supply down the line. Quality is better than last year when there were delays in shipping and fruit was at sea for longer.

Peruvian supply was hindered by strikes early on but those have stopped now. Quality from Peru is also very good.

Demand in the UK retail sector has been very good, the opening of food service and hospitality has meant an easing off in retail sales but they are still strong.

For suppliers it is difficult to predict how the demand will be in the next 4-6 weeks as hospitality opens up more, but it is likely to be a slow transition. Good weather which is forecast this weekend will mean an increase in sales as people have more salad and are dining alfresco.

Italy: Logistical issues and high summer demand boost avocado price
The avocado is becoming increasingly popular in Italy: the greatest consumption is in the north of the country, although it is also very popular in the south, especially among young people.

The avocado is becoming more and more of a consumer product: in fact, in addition to catering, it is highly appreciated by consumers, who demand a more ripened and ready-to-eat fruit.

Over the last few days, the wholesale price of the first class avocado has been very high, at around EUR 4/kg. This seems to be due to logistics factors, as well as the fact that demand is high in summer. The packages sold by the wholesaler are 4 kg and currently cost around 15-16 Euro each.

Sales would be smoother if the price were slightly lower, but the current conditions leave no space for price decreases in the short term. The current origin of avocados, mostly by sea, is South America, specifically Peru and Colombia. The green ones come from South Africa.

A wholesaler in Milan says: “The greenskin campaigns are almost over and the little product available is being sold at very high prices for dubious quality. For the next few months, until the end of September, we will only have Hass varieties available from Peru, Brazil and South Africa. Prices here are currently low. From September, the avocado campaign from Israel will start again.”

A Sicilian businessman adds: “In the season that has just ended for the Sicilian avocado, we have recorded a significant increase in productivity of 30% to around 1,400 tonnes. It is too early to make estimates for the 2021/22 campaign, we will draw the conclusions and develop the schedule and calendar with the categories in mid-September.

The trees are full, thanks to the extraordinary management techniques, but it will probably not be a superlative year like the last one. Not in terms of quality (which is undoubtedly excellent), but in terms of quantity, considering the increasingly evident and decisive negative climatic trend between spring and summer, with fluctuating temperatures during pre- and post-flowering.”

Spain: Avocado production in Spain continues to grow as the season sees good prices
The Spanish avocado season will start at the end of September. The harvest of Hass avocados, the most commonly grown variety, is expected to increase by around 20% this year thanks to a good fruit setting favoured by good growing conditions. As for the green skin varieties like Bacon, the production is expected to be around 10% lower.

The acreage of avocados keeps growing in Spain, in the province of Cadiz, which already counts around 4,200 hectares, Huelva, with approximately 2,500 hectares and Valencia, with nearly 1,500 hectares, Malaga (combined with Granada) being the main growing area at 10,000 hectares. However, the sector faces growing limitations due to the water shortage.

Spain is now importing avocados mainly from Peru, which dominate the European markets, as well as smaller volumes from Colombia, while Mexican avocados will hit the markets within 2 weeks. According to an exporter the market has been pretty quiet in June, as the entry of Kenya added pressure on the supply and pushed the prices down.

At the moment avocado sales are better than last year in the same period, with more stability in the demand. According to the exporter, Peru has organized its supply better this year. The opening of new markets such as South Korea and Japan and the 20% of growth in exports to Chile this year has resulted in less containers to the UE.

Last summer Peru was sending around 800 containers per week while this summer Peru is sending 500-550 containers per week to the European markets. The progressive opening of the hospitality is also having a positive impact in sales.

Large sizes are now abundant in the market due to a late ripening of the fruit in the trees in the North of Peru. Promotions are expected in the coming weeks that could boost the demand.

South Africa: Disappointing avocado season with unrest causing shipping issues
It has been a disappointing avocado season for South Africa so far, with lower volumes than expected. The harvest has now moved to KwaZulu-Natal where fruit has been packed and palletized, but is unable to be shipped out because of the unrest in the province and road closures.

There have been no attacks on avocado farms or packhouses in KwaZulu-Natal, despite the current unrest in the country, according to a local grower. If they are unable to export in a few days’ time, they might have to look at contingency plan B and market the fruit locally.

The export estimate for this season is 16 million 4kg cartons, most of it to Europe where Peruvian volumes offer stiff competition and it’s been a tough season for South African avocado exporters.

The average domestic avocado price is R16.66 (0.96 euro) per kg.

North America: Avocado supplies down with Mexican crop transition
Supplies of avocados are down somewhat in North America, even with fruit being sourced from multiple regions currently.

“As Mexico transitions into the Flor Loca crop, and the California season nears its end, the U.S. industry supply is down,” says a California based producer.

Domestically, California’s avocado industry has harvested the majority of its anticipated 250-million lb. crop. Sizing of the fruit is skewing towards sizes 60 and 48 for the state’s avocados, which started harvest earlier this year and sees peak availability through August.

From Mexico, the country that ships the most avocados to the U.S., its crop size for the 2020-2021 year is approximately 2.9 billion lbs. of fruit. Looking ahead, the preliminary crop size for 2021-2022 is an anticipated 3 billion lbs. of avocados.

“The Mexico crop is also skewing toward small fruit sizes 48 and 60,” says the producer. “Compared to a few weeks ago, prices are higher due to the transitioning of the crop in Mexico. The industry will typically see higher prices during transition until the new crop is in full swing.”

And then there’s Peru where harvest is going strong and anticipated to continue through September. “For Peru, the industry is in peak season of the anticipated 1 -billion-pound crop, which is skewing toward smaller fruit sizes 60 and 48,” they continue.

At the same time, the producer notes that they also turn to regions such as South Africa to continue providing regions such as Europe with year-round supplies of Hass avocados.

Altogether, the supplies of avocados are similar to last year at this time. “Looking ahead, the industry expects the market to balance out as Mexico completes its transition to the Flor Loca crop.”

Meanwhile demand for avocados continues to be strong. Consumption continues to increase year-over year. The biggest challenge is to balance supply with demand.

Australia: New Zealand produced record export and total crop volume; Australia expects some of the biggest crops ever
New Zealand’s avocado industry value eclipsed NZ$227m in the 2020-21 season, with $167m delivered by avocado exports and $60m in sales in the New Zealand market.

NZ Avocado reported that the 2020 New Zealand avocado season produced a record export volume and total crop volume; 44,000 tonnes of avocados were harvested, with 5.1 million trays (5.5kg) exported to 11 export markets, an increase of 10% on the previous season.

Australia was New Zealand’s largest market for avocado exports receiving more than 4.2 million (5.5kg) trays. In 2020, domestic production in Western Australia was depleted which allowed for more imports.

Around 500,000 trays of avocados were exported to eight markets across Asia and of those Thailand was the largest market. Around 2.5 million trays worth over $60m were sold in New Zealand in the 2020 season.

Meanwhile, a major Australian avocado producer is expecting some of the biggest crops that the country has ever produced in 2021, which will lead to more opportunities both domestically and internationally.

They noted: “Price has been something that has been a factor in the past 10 years in getting new customers into the mix, so when supply is abundant, we have the opportunity to get more consumers into the product as well.

The weather has been surprisingly good across the growing regions. It is some of the biggest crops that the Australian industry has had over the past 20 years, so it has created plenty of opportunities from the perspective of export and expanding domestic sales.”

Consumers are enjoying some cheaper prices at the retail level, with the major supermarkets selling the fruit for as low as AU$1 each in recent weeks. Australia is now in peak production for the Hass variety in Queensland, following the Shepard avocado season, which ran from February to May.

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