Opinion

Global Avocado Industry Keeps Growing Due to Global Demand

Fresh Avocado
South Africa
Published Mar 31, 2024
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The global avocado industry continues to flourish, driven by increasing consumer demand for its nutritional benefits and culinary versatility. With avocado exports surging from 2.53 mmt to 3.05 mmt between 2022 and 2023, the industry has demonstrated remarkable resilience and growth. Despite challenges such as weather anomalies, the global avocado market is projected to reach a value of USD 16.24 billion by the end of 2024.

Avocado, recognized as a global staple, has surged in popularity due to its versatility and nutritional benefits, growing the industry in the past years. This surge reflects the fruit's integral role in diverse cuisines and dietary preferences, positioning the avocado industry as a dynamic and essential component of the global food market.

2023 Exports

According to FAO’s 2023 preliminary results, avocado exports witnessed significant growth on the global stage from 2022 to 2023, reflecting a remarkable increase from 2.53 million metric tons (mmt) to 3.05 mmt. This surge in export volume underscores the expanding demand for avocados worldwide and highlights the industry's robust performance. As consumers continue to embrace avocados for their nutritional benefits and culinary versatility, countries around the globe have responded by enhancing production and trade efforts. The upward trajectory in avocado exports signifies a promising outlook for the industry, with opportunities for further expansion and market penetration on the horizon.

Figure 1. 2022 vs. 2023 Global and Top Players Avocado Exports

Source: FAO

Mexico: Mexico is anticipated to maintain its position as the world's leading exporter of avocados in 2023, with a projected export volume of 1.48 mmt, representing an increase of 26.79% year-over-year (YoY). This growth is attributed to a strong recovery from weather-induced production losses experienced in 2022. However, the average export unit value dropped to USD 2,186 per metric ton (mt) in the first seven months of 2023, largely due to high supplies. Almost 80% of Mexico's avocado exports during this period were destined for the United States, with additional shipments to Canada, Japan, and the European Union.

Peru: Peru is poised to reinforce its position as the second leading supplier of avocados globally in 2023, with an estimated export volume of 625.55 thousand mt. The 2023 export volume represents a YoY increase of 7.19%. The country's exports benefited from favorable weather conditions and prior investments in production expansion, resulting in higher supplies and improved product quality. Despite this growth, export unit values averaged USD 1,596/mt in the first eight months of 2023, reflecting competitive pricing strategies. Approximately 50% of Peru's avocado shipments were directed to European Union markets, particularly the Kingdom of the Netherlands and Spain.

Kenya: Kenya, an emerging avocado exporter, is expected to witness a 24% increase in exports, reaching 127.67 thousand mt in 2023, a slight increase of 1.2% YoY. The country has significantly expanded its avocado cultivation area in recent years, nearly tripling it since 2015 to 25,919 hectares by 2021. With more than half of its exports directed to European Union markets, Kenya maintains competitive pricing, with average export unit values around USD 1,100/mt in the first eight months of 2023.

Chile: Chile's avocado exports are estimated to decline by nearly 40% in 2023, reaching approximately 66.91 thousand mt, a 38.68% drop YoY. This reduction is attributed to spring frosts in September 2022 and strong domestic demand, diverting produce away from export markets. Chile primarily supplies avocados to European Union markets.

South Africa: South Africa's avocado exports in 2023 grew by 7.4% YoY, reaching approximately 67.64 thousand mt. Nearly 80% of these exports are destined for European Union markets, where rising consumer demand drives continued growth. The average unit value of shipments from South Africa increased by 8% year-on-year, reaching USD 2,048/mt up to September 2023.

2023 Imports

Global avocado imports have shown significant growth, with figures rising from 2,440.90 mt in 2022 to 2,845.01 mt in 2023. This increase reflects the growing demand for avocados globally.

Figure 2. 2022 vs. 2023 Global and Top Players Avocado Imports

Source: FAO

United States: In the United States (US), avocado imports are projected to rise to approximately 1.2 mmt in 2023, marking a 15% increase from the previous year. This upturn is largely attributed to favorable supply conditions in Mexico, the primary avocado supplier to the US market. Despite the heightened import activity, there was a notable YoY decrease of 33% in the average import unit value from January to August 2023, falling to USD 2,325/mt. Noteworthy is the indicative average wholesale price range for avocados in the US, which hovered around USD 5.07 per kilogram (kg) during the initial nine months of 2023, signifying a substantial downturn compared to the preceding year.

European Union: The European Union (EU) is anticipated to import approximately 780 thousand mt of avocados in 2023, marking a 15% increase from the previous year. Avocado consumption in the European Union continues to gain popularity, driven by its perception as a highly nutritious fruit. Within the EU, Spain experienced significant import growth of 32% in the first eight months of 2023, primarily due to higher procurements from Peru. Poland, another emerging avocado consumer, witnessed import growth of 24% over the same period. Additionally, avocado imports by Germany increased by 10% during the first eight months of the year. It's important to note that the Netherlands serves as a major regional trade hub within the EU, accounting for approximately 50% of total imports and re-exporting about 90% of their gross avocado imports.

Avocado Industry Forecast

Value Forecast

The avocado industry has seen remarkable growth, fueled by rising consumer demand for its distinctive flavor and perceived health benefits. Avocado trade plays a pivotal role in ensuring its availability in markets worldwide. Recent years have witnessed significant expansion in the global avocado market, with its value reaching USD 15 billion in 2023. Projections indicate further growth, with the market expected to reach USD 16.24 billion by the end of 2024, reflecting a noteworthy compound annual growth rate (CAGR) of 8.3%. Looking ahead, sustained expansion is anticipated, with the avocado market forecasted to surge to USD 21.55 billion by 2028, demonstrating a CAGR of 7.3%.

Figure 3. Global Avocado Market Value Forecast 2023 to 2028

Source: The Business Research Company

The avocado industry's anticipated growth reflects its enduring popularity and capacity to adapt to evolving consumer preferences and global market trends. Fueled by rising health consciousness, culinary innovation, and expanded distribution channels, avocados continue to transcend cultural boundaries, driven by their versatility and perceived nutritional value. Despite challenges such as sustainability and market fluctuations, ongoing innovation and a growing emphasis on sustainability initiatives position the industry for sustained growth and expansion.

2024 Forecast for Top Players

The global avocado production in 2024 is expected to drop due to ongoing weather anomalies exacerbated by the El Niño phenomenon. El Niño's effects, such as irregular rainfall patterns and temperature fluctuations, are anticipated to impact avocado-producing countries like Mexico, Peru, Chile, and Colombia, potentially leading to reduced fruit size and harvested volumes. Each of the top market players will play an important role in the overall market development for avocados in 2024.

Mexico:In 2024, the avocado industry in Mexico is expected to maintain stable supply and demand, resembling trends from the previous year. Notably, the Super Bowl created high demand from the US in February. Despite initial weather-related challenges, the harvest has rebounded, leading to increased exports. Field prices have remained steady amidst these developments. The overall avocado market in Mexico has been increasing since 2022. However, alongside this growth, there have been concerning reports of increased criminal activity, particularly in regions like Michoacán. Surprisingly, these criminal groups may have inadvertently contributed to the legal market's expansion, drawn by lucrative profits and collaboration opportunities. Addressing corruption and promoting sustainable practices are imperative in light of these challenges. Nonetheless, collaborative efforts led by Michoacán's self-defense groups have notably improved security in avocado-growing regions.

Peru:ProHass noted adverse weather in Peru impacting the 2024 Hass Avocado campaign, foreseeing a 20 to 25% export volume decline due to reduced fruit presence and smaller sizes, mainly in Trujillo and Chiclayo. Production is expected to drop by 30% in the north coast and 15-20% in central and southern regions, contrasting with robust Sierra exports of 300 containers weekly. Despite potential price hikes from reduced supply, uncertainties linger on compensating for volume losses. Market strategies aim to increase exports to the US, capitalize on potential challenges in other producing countries, and exploit Europe's expected high prices. Also, there is a strategy to expand export markets to Asian markets like Malaysia and exporting more to existing markets like US, Europe, and Chile.

Kenya:The 2024 forecast for Kenya's avocado industry is promising as the export season started on March 1st. Following a thorough field survey by the Horticultural Crops Directorate (HCD) to evaluate fruit maturity and volume, stakeholders anticipate a year marked by growth and success. Quality assurance remains paramount for 2024, with the Agriculture and Food Authority (AFA) and HCD inspectors committed to upholding stringent standards, while exporters must adhere to size restrictions for Hass and Fuerte varieties to maintain product integrity. Regulatory oversight and accountability measures will be enforced, ensuring compliance with established guidelines and penalizing non-compliance. Despite the challenges posed by weather conditions, Kenya's avocado industry is poised for a fruitful season in 2024, with stakeholders ready to capitalize on opportunities for sustainable growth and reinforce the country's position as a global leader in avocado production.

Chile:According to the USDA, Chilean avocado production and exports are expected to see significant growth in the 2023/24 season. It is forecasted that there will be a 21% YoY increase in avocado production, reaching 200 thousand mt, attributed to favorable climatic conditions and abundant rainfall. The avocado area planted is expected to rise slightly by 1% compared to the previous season. Export projections for the season are expected at 110 thousand mt. With such optimistic projections, the avocado industry in Chile is poised for a prosperous year in 2024.

The global avocado industry is thriving due to rising consumer demand for its nutritional benefits and culinary flexibility. Despite challenges like weather disruptions and market fluctuations, the industry is expected to soar in 2024, with significant growth opportunities ahead. Top avocado-producing countries like Mexico, Peru, Kenya, and Chile are actively shaping the industry's trajectory. The avocado industry is set for a prosperous year in 2024.

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