Ecuador the New Avocado Supplier to the US

Ecuadorian Hass avocados have secured access to the US market after almost nine years of negotiations. The decision was announced by the Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture (USDA) on Monday 30th of May-22. APHIS officers have determined that the use of one or more designated phytosanitary measures will be sufficient to minimize the risk of introducing or disseminating plant pests and noxious weeds into the US, through the importation of fresh avocados from Ecuador.

US Imports aiming for Supplier Diversification

The authorization comes amid pressure from the US industry to increase the number of imported avocado-supplying countries available to US importers. Despite supply chain tensions over the last months, avocado imports have continued to increase into the US amid rising demand, causing prices to skyrocket.

Earlier this year, Mexican-origin avocado prices in the US market reached a historical high by Week 6 when they recorded a 100% YoY increase. The price for big-size avocado (60s) was reported at USD 5.20/kg or USD 61/carton in the San Francisco Wholesale Market and kept on an upward trend for the following weeks, reaching the highest price ever recorded at USD 5.60/kg in Week 8.

The substantial price increase was largely driven by continuously increasing demand in the US market, along with soaring production costs, labor shortages, and supply chain backlogs that have triggered price hikes. Therefore, the Ecuadorian avocado authorization is part of the government strategy to have broader avocado suppliers from different origins to support year-round demand and curb the dependency on Mexican supply.

Ecuadorian avocado exports, however, are extremely low in volume when compared to Mexico, Peru, and the Dominican Republic, which are US’ largest suppliers. Therefore, the authorization of Ecuadorian avocados is seen as a potential long-term solution, with Ecuador’s avocado production having the potential to increase exponentially within the next five years.

Ecuador's Potential in the US Market

Although avocado is considered a non-traditional agricultural export product in Ecuador, its global popularity makes it the fruit tree with the most potential for cultivation in the Inter-Andean valleys of Ecuador. Thus it comes as no surprise that the Ecuadorian government is conducting initiatives to promote the increase of the harvest area and exports. Moreover, market authorization into the US market is also expected to motivate producers in Ecuador to increase their harvest area and achieve better yields significantly.

There are currently around 6,000 ha of avocado plantings in the country. The Ministry’s goal is to increase this to 10,000 ha over the next five years, achieving 15 tonnes per hectare yields. According to data from the Ministry of Production, Foreign Trade, Investments, and Fisheries, Ecuador exported more than 600 mt of avocados in 2021, the main destinations being Spain (78.28%), Colombia (6.24%), and Hong Kong (5.54%).

In the last three years, the average income from Ecuadorean avocado exports has been around USD 2.2M. With considerable growth production potential and now access to the biggest avocado market globally, avocado exports in Ecuador are expected to have exponential growth and triple within the next two years. However, in order to be able to make a difference in the US import volume, the export volume will need to reach at least 3K mt, similar to the amount Colombia supplied in 2021.