Opinion

Demand for Ecuadorian Avocado Higher than the Production Capacity

Published Jun 21, 2022
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Avocado is a non-traditional agricultural export product in Ecuador, and demand for Ecuadorian Avocado is higher than the production capacity. Currently, Ecuador holds a 2K hectares production area for Hass avocado, while to meet export demand the production area should be around 15-20K. So far in the 2022 season, Ecuadorian avocado exports surpassed 147.6 tons, which is already 59.74% more than the total export volume for 2021.

Avocado is a non-traditional agricultural export product in Ecuador, and the industry is growing exponentially. Unfortunately, the Ecuadorian avocado industry cannot cover the export demand as it surpasses the country’s capacity. The main production area for Ecuadorian avocados is 1,400 to 2,500 meters above sea level, and peak season occurs from October to February when production drops in other markets like Peru, Colombia, and Chile due to seasonality and weather.

Ecuador holds 46 export markets open for avocado exports. Recently, the United States opened its borders to Ecuadorian avocados in May 2022. As the largest avocado importer globally, the American market is set to have a massive demand for avocados. Ecuador is also opening additional markets in Asia for avocado exports.

Ecuador produces mainly two avocado varieties, Hass and Fuerte. Hass variety is mainly exported, while Fuerte is exported and consumed locally. Hass variety is most desired on the international market since it holds a longer shelf life.

In 2017, Ecuador exported 14.8 tons of Hass avocados and in 2021, the export reached 92.4 tons. So far in 2022, the export volume surpassed 147.6 tons, with the primary destination being European countries such as Spain, Holland, and Switzerland. The exports this year already represent 59.74% more than the total exports for 2021. While the total demand for avocados keeps increasing, producers can not cover the demand due to insufficient production.

 

Source: La Hora 

This year, the total avocado production area for Hass and Fuerte avocados reached 8K hectares, but to reach the production capacity necessary to meet the export demand for Ecuadorian Hass avocados, Ecuador should hold a productive area of at least 15-20K hectares for that variety while the harvest area for Hass avocados only reaches 2K tons. The Sierra region holds 1.5K hectares while the Coast region holds 500 hectares. According to the Ministry of Agriculture and Livestock (MAG), three provinces of the North Sierra region hold over 60% of local avocado production: Carchi, Pichincha, and Imbabura.

Ecuador needs to expand its avocado production area to reach export and local demand. It will take at least five years until the crop stabilizes and starts producing a significant output. Local avocado associations are looking to implement technology and merge productive areas to incentivize industry growth. If Ecuador reaches 15-20K hectares of production area for the Hass variety, the income from avocado exports could reach between USD 1.2B and 1.5B per year.

Unfortunately, the Ecuadorian avocado industry faces many obstacles. The main issue the industry faces is a lack of financing to expand the plantation area. Local banks do not provide enough financing options for agriculture, and investors usually seek plantations of 500 to 1K hectares, which is not conventional for the avocado farms in Ecuador, where the average producer holds less than 10 hectares. Despite complications, the government is trying to incentivize the growth of the industry. President Guillermo Lasso and the Ministry of Agriculture and Livestock are setting initiatives to incentivize the expansion of the industry, especially of products with great export potential like avocado, hemp, and pitahaya. Forecasts indicate these initiatives will help the Ecuadorian avocado industry grow in the next five years.

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