Analysis & Reports
Global Avocado Market Update
Recent trends of major exporting countries
Mexico
Main variety for export: Hass
Production was slightly deterred at the beginning of 2020 due to labor shortages from COVID-19 restrictions. Current prices are slightly lower than the usual seasonal trend but are steadying after hitting a spike early this year. The implementation of phytosanitary pest-control programs has helped boost production in recent 3 years.
The majority of avocado production in Michoacán occurs in small orchards of just five to ten hectares and many producers have implemented SAGARPA’s food safety program.
Peru
Main variety for export: Hass
The price of avocados was quite high this season because the supply volume was limited. However, the supply of avocados from Peru began to grow in early April and this slowly restored the price to regular levels. During the first semester of 2020, Peruvian avocado exports totaled 265,260 gross tons, 15% more than in the same period of 2019. In The production volume was especially large this year in Peru and so the import volume of Peruvian avocados is expected to grow significantly. Peru still has a lot of young groves and the market expects steady growth in the 10-15 percent range from that South American country. Over 90% of the country’s exports go to Europe.
Chile
Main variety for export: Hass
Chile’s shipments to the United States have leveled off and it is not expected for them to increase in any significant amount in the foreseeable future. The Chilean avocado has unique characteristics in terms of oil quantity. During the 2019/2020 season, 168K tons of avocado were produced in Chile. 71.3% was exported to Western Europe, followed by 10.3% to South America, 9.1% to North America, 8.6% to Asia, 0.6% to Central America, and lastly 0.1% to Eastern Europe.
Colombia
Main variety for export: Hass
Columbian avocado has the seasonal advantage, as Peru produces avocados from April to August, and Colombia produces from October to March. Colombia is also expected to substantially increase its production over the next 10 years and was the host of the 2019 World Avocado Congress, signaling its aggressive approach to world avocado marketing.
Kenya
Main variety for export: Hass
Surprisingly, despite the coronavirus, exports for avocados in Kenya have increased during the first half of 2020 compared to 2019, resulting in more than 58,400 MT being sent, equal to approximately 75 million USD. The boom in exports has been reportedly attributed to an increase in acreage and quality of avocados. Additionally, once the global supply drops, Kenyan avocado prices are expected to increase from an average price of 350 shillings to 450 shillings (4 kg pack).
South Africa
Main variety: Hass
South Africa’s major competitor on the European market, Peru, landed record volumes of avocados in Europe during the month of June, which has resulted in an oversupply, with a concomitant sharp drop in prices. The estimate for South Africa’s avocado exports in 2020 has been adjusted down 11,6% from 18,5 million 4kg cartons to 16 million 4kg cartons, due to smaller fruit sizes as a result of the hot, dry summer. However, even at this lower estimate, 2020’s export volume would still represent a substantial improvement compared with the 2019 season when a total of 14,1 million cartons were exported.
Trade flow in recent years
Major importing countries from Mexico: US, Canada, Japan
The US market occupies more than 77% of Mexico’s total export value. Japan is the 3rd largest importer of Mexican Hass Avocado, while China has been continuously decreasing its import volume from Mexico. As the data shows in Table 2, China has started importing much more avocados from Peru and Chile since 2015, and the share of Mexican avocado in the market decreased from 85% in 2015 to 27% in 2019. Now the biggest exporter to China is Peru with its Hass variety.
Table 1. World Import from Mexico
Source: ITC World Trade Map
Table 2. China’s avocado import trends
Source: ITC World Trade Map
Major importing countries from Peru: Expected to become dominant in China and Japan
Peru has shown more slow export growth than Mexico, a 4% increase in trade value in 2019 compared to the previous year. However, it's export volume to east Asian countries - China and Japan - is aggressively expanding. In 2015, China imported only 104,000 USD from Peru but in 2019, the trade value is 25,684,000 USD. Similarly in Japan, Japan’s import value was 39,000 USD in 2015 and it reached 12,393,000 USD last year. While Peruvian export grew, Mexico is still occupying more than 90% of the market share in Japan. Export to the UK also doubled in 4 years.
Table 3. World Import from Peru
Source: ITC World Trade Map
Rising Sourcing Destination
Tanzania
Tanzania holds a unique seasonal window for its avocados, from December to March in Mbeya and May to August in Kilimanjaro, both of which are main producing regions. This gives Tanzanian avocados an advantage in exporting when there is little competition in the market. Production in certain regions increased due to optimal weather conditions including sufficient rainfall, resulting in earlier or longer harvests as well as good product quality, while other regions suffered from excessive rainfall since last October.
Due to a lack of buyers from the pandemic, prices for avocados have dropped drastically, from already low prices. Farmers have normally sold their avocados to buyers for around USD 0.69 - 0.82 (TZS 1,900) per kg, but currently, some producers have resorted to selling their avocados for USD 0.43 (TZS 1,000) per kg.
*Countries that have allowed Tanzanian avocado import:
The UK, the Netherlands, and France.
Major importers of Avocado and available species/countries
Europe
Available countries: Chile, Mexico, Israel, Spain, Columbia, South Africa, Kenya, Tanzania
The European summer's supply of avocados is dominated by Peru, South Africa, and Kenya. In the winter months, avocados come to Europe mostly from Chile, Mexico, and Israel, while Spain also supplies.
Europe almost exclusively requires a minimum of Class 1 avocados, and a tolerance of 10% is allowed for Class II fruits. Avocados should also have a minimum dry matter content, which is 21% for the Hass variety, 20% for the Fuerte, Pinkerton, Reed, and Edranol, and 19% for other varieties, except the Antillean avocado which may have lower dry matter content.
France/Spain: France imports a significant amount from Spain and Peru, with smaller quantities from Israel and Mexico. As much as the amount that France exports from Spain, Spain relies heavily on France for exports of its avocados, where France takes up nearly half, according to the International Trade Center in 2019. The Hass avocado is the main export variety in line with consumer preferences. Spain and France are also major re-exporters, with Spain a well-known source for Latin American avocado exporters to enter the European market.
United Kingdom: The most in-demand avocado variety in the UK is the Hass avocado. The country mostly imports avocados from Peru and Chile, with a smaller percentage to other European countries such as Spain and the Netherlands. Peru and Chile occupied 20.7% and 20.6% of the UK's imports respectively in 2019, according to the International Trade Center in 2019. The United Kingdom has an even lower maximum residual level (MRL) for pesticides and other contaminants on food products than the level set by the EU.
Russia
Available countries: Israel, Peru, Kenya, South Africa, Columbia, Mexico, Chile, Dominican Republic, Guatemala, Tanzania
Russia is one of the top countries that has shown very rapid growth in its avocado imports. It is now the 10th largest importer from the world. The country's import volume increased by 480% in 4 years. Israel and Peru is the main source of Its avocado import, but the sources are much diversified with other South American markets (Columbia, Chile) and African countries (South Africa, Kenya).
Korea
Available countries: United States (excluding Hawaii, Texas, and Florida), New Zealand, Peru
Avocados from the US-led imports in Korea, in 2016 to 1630 tons, and 2018 to 7991 tons. However, in 2019, cadmium was detected in U.S. avocados, and in February of this year, the KFDA announced that the U.S. avocado, which was able to clear through only the document inspection, strengthened the inspection to a cargo inspection. As a result, the number of imported avocados in the United States in 2019 was 66% (2716 tons) lower than 7991 tons in 2018. Even this year, the number of avocado imports in Q2 was down 25% from the previous year. From 2020, Peruvian Avocado has shown signs of occupying this position. Since Korea settled an FTA agreement with Peru in 2013, Peruvian avocados became tariff-free to Korea.
