Opinion

Avocado Production in Chile to Strongly Recover for MY 2021/22

Fresh Avocado
Chile
Published Oct 20, 2021
The downward trend in avocado production in Chile over the last months seems to be coming to an end as substantial increases in avocado production are forecast for MY 2021/22. According to the Chilean Avocado Committee, MY 2021/22 production is forecasted to reach 220,000 MT, a 57% increase over the last year when frosts and drought severely impacted production. The production growth, attributed to improved weather conditions and a positive setting of the fruit, is expected to cause exports volume to increase while Chilean exporters will aim for larger participation in the European market.

With the optimistic production forecast, more Chilean avocados are expected to be in the market next season with an estimated export volume of 120,000 MT. However, last MY 2020/21 was marked by a short supply of Chilean avocados which impacted prices mainly in Europe and caused Peruvian and Colombian avocados to take the lead in the EU market.

A Strong Recovery from a Disappointing MY 2020/21

In MY 2020/21, Chile’s avocado production was impacted by heavy drought and increasing temperatures across the main producing regions. Export volumes were historically low during the export period because of limited supply. According to the USDA Avocado report on Chile, MY 2020/21 production reached 140,000 MT which was 40% lower than the previous campaign. The ongoing drought in Chile has affected fruit production in the country for more than a decade with high temperatures during the growing phase decreasing fruit set last season.

For MY 2021/22, a complete output recovery is expected due to improved weather conditions mainly in the Valparaiso and Metropolitana regions, translating into an effective fruit set. Chilean avocado planted area totaled 30,143 hectares in MY 2020/21 and is forecast to remain the same for the new season. However, the productivity of this same area will have a 57% increase, reaching 220,000 MT. The planted area of the Hass avocado reached nearly 90% of the total 30,143 hectares.

The substantial reduction in production in MY 2020/21 affected the export market of Chilean avocado and caused an increase in avocado imports from Peru and Mexico to supply the local market. Chileans consume around 30% of the avocado production, which amounts to about 65,000 MT per year. Consequently, local demand in Chile has gained significant relevance, with domestic distributors having to import avocados from March to July when the domestic production is out of the market.

Positive Expectations for MY 2021/22 Exports

According to the Chilean Avocado Committee, about 120,000 MT of the total production are set to be exported, compared to around 74,000 MT last season. The remaining 100,000MT of the output is forecast to be sold in the domestic market. With this projection, Chile would be increasing its export volume by 60% from the previous year. According to the Committee, within the first two months of the export season, which is concentrated between August and February, 397.29 MT have already been shipped to Western Europe and 203.18 MT to South America.


Source: ITC Trade Map, ODEPA

While exports to Europe last MY 2020/21 amounted to 75% of Chile's avocado exports, for this MY 2021/22, the EU is set to remain as the primary destination as well. Of the total volume exports last season, 55,520 MT were exported to the EU, mainly to the Netherlands, United Kingdom, and Spain. The South American market was the second-largest market with 10,000 MT, mainly to Argentina, and the third was China with around 6,000 MT sent.

Apparent Come Back to the Markets

For MY 2021/22 that has already begun, the USDA forecast is that Chilean avocado exports could reach 145,000 MT by the end of the season, which is 25,000 MT more than the 120,000 MT the Committee predicted. Regardless of this forecast discrepancy, it is apparent that Chilean avocados will have a comeback on its usual markets in which it has participated over the last years, with some new markets being added to the list.

In August and September of 2020, Chile announced that the Australian and the South Korean markets had granted access to Chilean avocados. As a result, Chile will be the only country besides New Zealand with access to the Australian avocado market to supply the country when domestic produce is offseason. Backed by solid production volume, for this MY 2021/22, Chile will try to remain Europe’s second-largest provider of fresh avocados and will try to boost exports to China and the Oceania region.

Sources:

By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes. To learn more about our cookies, please read our Privacy Policy.