1. Weekly News

Global

Avocado Volumes Decline in US and Europe Driving Price Increases Across Markets

The Avobook W45 Report reveals a third consecutive week of declining avocado volumes in the United States (US), driving price increases across most sizes. Mexican avocados dominate the US market, holding a 95% share, with smaller contributions from Chile, Colombia, and the Dominican Republic. In Europe, avocado imports dropped by 8%, with Chile's market share falling by 25%, while Colombia and Israel saw increases of 40% and 30%, respectively. Small-caliber avocado prices in Europe are under pressure, with further declines anticipated. In China, avocado prices remained stable compared to 2023, although imports rose by 11%, mainly driven by arrivals from Chile and Peru.

Guatemala

Guatemala Gains Access to the US Market for Hass Avocados

After decades of efforts, Guatemala achieved a significant milestone. The United States Department of Agriculture (USDA) published a final notice allowing the importation of Guatemalan Hass avocados, provided that sanitary and phytosanitary requirements are met. While the regulatory process is complete, further steps are needed before exports begin. In 2022, Guatemala exported 10.8 metric tons (mt) of avocados valued at USD 11.7 million, and initial exports to the US are expected to reach 1.7 thousand mt, valued at USD 14.5 million. Projections suggest that 2030 avocado exports could exceed 15 thousand mt, valued at USD 45 million, providing economic growth and job opportunities in rural communities. Additionally, the US collaborated with Guatemala on responsible water use and deforestation prevention in avocado cultivation areas.

Peru

Peruvian Avocado Exports Lead Agricultural Growth in 2024

Between Jan-24 and Sep-24, Peru's agricultural exports reached USD 7.7 million, a 21.4% year-on-year (YoY) increase. Avocado led the industry with exports totaling USD 1.22 billion, marking a 28% YoY increase and accounting for 15.77% of total agricultural exports. The primary avocado-producing regions included Lima, La Libertad, Ica, Lambayeque, and Ancash. Overall, non-traditional agricultural exports grew by 18.3% to USD 6.92 billion, driven by avocados, blueberries, coffee, and cocoa. The US remained the top destination, receiving 30.6% of the total agricultural exports.

Philippines

Philippines Exports First Hass Avocados to Japan

The Philippines exported its first shipment of Hass avocados to Japan, representing a key advancement in expanding its agricultural exports. Sourced from Mindanao, this shipment highlights the country's commitment to high-quality produce and its growing presence in international markets. Japan, a significant importer of Hass avocados, purchased 61 thousand mt in 2023, primarily from Mexico, Peru, Australia, New Zealand, and the US. The Philippines' entry into this competitive market significantly opens new opportunities for local producers as Japan's demand for fresh fruits rises. This development is part of the Philippines' broader efforts to boost agricultural exports to Japan, valued at USD 1.1 billion in 2023. It positions the country to expand its reach in the global Hass avocado market, which is projected to reach USD 8 billion by 2025.

2. Weekly Pricing

Weekly Avocado Pricing Important Exporters (USD/kg)

Yearly Change in Avocado Pricing Important Exporters (W46 2023 to W46 2024)

Mexico

Mexico's avocado prices fell by 3.79% week-on-week (WoW) to USD 2.79/kg in W46, reflecting a slight decline of 1.06% month-on-month (MoM). This is due to the continued seasonal oversupply, as peak production volumes from September to December and cloudy weather conditions in W46 led to temporary market adjustments despite sustained demand. However, YoY prices increased by 3.72% YoY due to the ongoing strong demand for certified avocados and steady export activity, particularly from Michoacán, which continues to support premium pricing.

Peru

Avocado prices increased in Peru by 3.60% WoW to USD 1.15/kg in W46, with a 5.5% MoM increase. This is due to improved harvest timing and strong European demand, supported by better fruit quality and yield optimization as the industry prepares for the 2024/25 season. Additionally, favorable growing conditions contributed to the price rise. However, there is a significant decrease of 34.66% in YoY prices due to increased competition from Mexican avocados in primary markets like the US and a drop in export volumes by 9% YoY, compounded by concerns over cadmium levels and logistical challenges.

Spain

Spain's avocado prices dropped by 4.12% WoW to USD 1.86/kg in W46, a 27.63% MoM decline, and 12.26% YoY decrease due to continued market oversupply, particularly from early-season green-skinned varieties, which flooded the domestic market. Additionally, increased competition from imported avocados and ongoing water shortages affecting local harvests further pressured prices. The combination of excess supply and quality concerns due to the dry conditions continues to weigh heavily on Spain's avocado prices.

Chile

Chilean avocado prices increased slightly by 0.58% WoW to USD 3.48/kg in W46. There is also a 2.05% MoM rise and 6.75% YoY increase due to steady export demand, particularly from European markets, and the continued limited availability from regional suppliers. Despite ongoing competition from Colombian avocados, the stabilization of export volumes, especially with smaller contributions to the US market, allowed prices to remain relatively firm. Additionally, the tightening of supply following earlier fluctuations in production contributed to the modest upward price trend.

3. Actionable Recommendations

Strategize for Avocado Supply and Demand Shifts

Avocado importers and distributors should monitor market fluctuations closely, especially in the US and Europe, to adjust their purchasing and pricing strategies. As avocado volumes decline, particularly from Mexico, there are opportunities to capitalize on higher prices by ensuring a steady supply of premium varieties. They should also explore sourcing from alternative regions like Colombia and Israel, which are showing growth in the European market, to diversify supply chains and enhance market positioning. Additionally, focusing on managing small-caliber avocado prices in Europe and addressing supply gaps will help maintain competitive pricing.

Capitalize on Hass Avocado Export Growth to Japan

Philippine avocado exporters should focus on enhancing their supply chain and marketing efforts to solidify their presence in the Japanese market. By ensuring consistent quality and aligning with Japan's high standards, they can leverage the growing demand for fresh avocados. Exporters should also explore expanding relationships with distributors in Japan, targeting premium retail sectors, and promoting the unique qualities of Philippine-grown Hass avocados to differentiate them from competitors. This strategic push will help capitalize on the opportunity to tap into a competitive, high-value market and boost long-term export growth.

Optimize Pricing Strategy During Seasonal Oversupply

Avocado producers in Mexico should implement dynamic pricing strategies to manage the seasonal oversupply and fluctuating demand. Producers can maintain profitability even during peak production periods by closely monitoring weather conditions and adjusting pricing based on supply fluctuations. Additionally, they should prioritize the promotion of certified, high-quality avocados for export to premium markets, ensuring continued demand and supporting price stability. This proactive approach will help mitigate the impact of oversupply while leveraging high export activity for sustained revenue growth.

Sources: Tridge, Agraria, CGA, CEPEA, Freshplaza, Eastfruit, MXfruit, Portalfruticola, Gmanetwork