Lower Global Mango Supplies Resulting in Historic High Prices

Peruvian Mango Exports to Drop by 76% in the 2023/24 Season

In the upcoming 2023/24 season, Peruvian mango exports are anticipated to plummet significantly due to adverse climate conditions. The Peruvian Association of Mango Producers and Exports (APEM) projects a substantial 76% year-on-year (YoY) decline, foreseeing export volumes to reach only 60 thousand metric tons (mt). This marks a stark contrast to the 2022/23 season, which witnessed the country achieving export volumes of 250 thousand mt, marking the fruit's fourth consecutive annual increase.

Anticipations of a mango shortage in Peru for the 2023 season were grounded in the sustained impact of the El Niño weather phenomenon. This phenomenon adversely affected the flowering process across the majority of Peru's mango orchards. Preceding the warmer winter, heavy rains induced by the Yaku cyclone in late February and early March contributed to the challenging conditions. Subsequent to this, the last quarter of El Niño brought about hot weather. Experts estimate that Peru faces a reduction of 8.5 thousand containers this season due to these climatic challenges.

The decline in export volumes has triggered a surge in prices, reaching even double the levels observed in the previous season for air-transported fruit. The San Lorenzo Valley, along with nearly every growing region, experienced significant disruptions in production caused by rains during March and April. As a consequence of the scarcity of mangoes in Peru, a competitive price war has ensued, with numerous producers vying to sell their fruit to the highest bidder, particularly among exporters from the country.

Source: Tridge Transaction Data Services (TDS)

Mango Supplies to the US Anticipated to Be Scarce This Winter

The availability of mangoes to the United States (US) is expected to be notably limited this winter, presenting a departure from the usual supply scenario. Ecuador and Peru, key contributors to the US mango market, have been adversely affected by the El Niño phenomenon, resulting in elevated temperatures during the crucial flowering stage. This has led to suboptimal flowering, negatively impacting yields, with forecasts indicating a significant 50 to 70% reduction compared to the previous year.

In the 2022/23 season, both Ecuador and Peru played a substantial role in supplying mangoes to the US, contributing 23.5 million boxes (4 kilograms) and 13.4 million boxes (4 kg), respectively. However, due to the unpredictable nature of El Niño effects, accurately predicting the volume for the current year proved challenging. The phenomenon introduces uncertainty, with the potential for rain during harvesting season, posing threats to logistical operations and the overall quality of exported mangos.

In contrast, the Brazilian mango season appears to be proceeding as usual: it commenced in the first week of August and extended until the first week of December. Brazil is expected to ship around 11 million boxes, reflecting a 19% increase from the previous year. While a significant portion of Brazil's mangoes typically goes to Europe, the country also directed 14% of its total exports to the US last season. From the perspective of US imports, 7% of all mango imports were sourced from Brazil in the preceding year. Additionally, Colombia entered the US mango market for the first time in the 2022 season, though volumes remain limited, totaling 20.7 mt.

Scarcity of Mangoes in the EU Exerts Pressure on Prices

The European mango market is grappling with an exceptionally tight supply situation, leading to a surge in prices. This trend is expected to become more pronounced around the turn of the year, coinciding with the commencement of the Peruvian season. The primary reason for this price surge is the insufficient volume of mangoes reaching European shores. The production challenges in Peru have left a notable gap in available supplies, with no alternative sources to compensate for the shortage.

The Dutch market is experiencing a scarcity of mangoes, which is anticipated to persist for a considerable period. In Germany, mango supplies are also constrained, contributing to elevated prices. The main factors driving this price increase originate from challenges at the source, including significant crop losses in Peru due to the El Niño phenomenon, adversely affecting blossom development. Italy has witnessed a decline in the number of mango buyers, leading to sluggish trade, coupled with sustained high prices until recently. Spain has concluded its mango season prematurely, facing a 30% reduction in volumes and market complications attributed to soaring prices and increased stocks from Brazil.

Prices are Projected to Keep Climbing

Global mango prices are expected to experience further upward pressure throughout the remainder of Dec-23. This upward trend adds to the already elevated prices compared to the same period last year. The market is anticipated to face increased tightening throughout the balance of December until the commencement of the Peruvian season, which may extend to the third week of December. The degree of tightening is contingent on the weather conditions in South America, particularly in Peru, where the season started later this year. The limited flowering in Peru has resulted in supplies well below the average, impacting the volume destined for both the US and European markets.

The commencement of Mexican mango production is eagerly awaited, with expectations of slim supplies for both red and yellow mango varieties. The yellow mangoes from Mexico are not projected to start harvest until the middle of January, while the red varieties are expected to commence in February. While flowering has initiated in southern Mexico, the northern regions are yet to begin. Regions like Chiapas and Oaxaca have experienced flowering for red and yellow varieties, with other areas expected to follow suit in the coming months.