Opinion

Peruvian Avocado Season Starts with Higher Prices on Strong Chinese Demand

Fresh Avocado
Fruits
China
Peru
Market & Price Trends
Published Feb 21, 2023
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The new Peruvian avocado season, which started in December 2022 and will continue until October 2023, has begun with higher prices than the previous season, particularly in the Chinese market. As of week 5 of 2023, Peru has exported more than 7 thousand mt, an 11% increase from the same date last year. Notably, exports to China doubled during this period, indicating a good start to the year for Peruvian avocados on the Chinese market. Moreover, unlike the previous season, this season started with higher prices for Peruvian avocados in the Chinese market due to a low arrival volume of containers with avocados from Peru and a rising demand for avocados.

According to the Peruvian Hass Avocado Growers Association (ProHass), Peruvian Hass avocado exports would reach 624 thousand mt in the 2023 campaign, which would represent an increase of 12.5% ​​compared to the 554 thousand mt shipped in the 2022 campaign. As a result, the total export volume of Peruvian avocados in 2023 is likely to double from the 2018 season export figure of 338 thousand mt.

ProHass further reported that, for the 2023 season, Peru’s avocado exports as of week five of 2023 totaled 7.14 thousand mt, up by 11% over the same period of last year. Approximately 30% of these exports occurred in the fifth week, representing a 47% YoY increase for the same week. This season's key overseas markets have included the Netherlands, China, and Russia. During the first five weeks of the year, exports to China doubled, attesting to a strong start for Peruvian avocados in the Chinese market this year. However, exports to the Netherlands dropped by 13% compared to last year, while shipments to Russia also declined due to the conflict with Ukraine. As a result, Peruvian exports have put a stronger focus on enhancing its avocado trade with Asia. In an effort to reduce its reliance on trade with European countries.

Peruvian avocado exporters intend to diversify their exports this season by sending more shipments to the US and Asian countries. As a result, Peru is anticipated to export at least 125 thousand mt of avocados to the United States. Meanwhile, exports to Asia are expected to continue their upward trend. Furthermore, exports to Asia are expected to increase in value due to a price increase generated by the Chinese demand for avocados after the Covid-19 pandemic restrictions.

Unlike the previous season, this season seems to be starting with higher prices for Peruvian avocados in the Chinese market. Alice Zheng, from Tridge’s Global Fulfillment department in China, has reported that prices of Peruvian avocados in the Guangzhou market continue to increase due to a supply shortage. “Even if the selling prices per box are 3-4 times higher than before, consumers are still willing to purchase,” she explained. According to Miss Zheng, the selling prices for February 7, 2023, stood for 20-22pcs at USD 30.98-32.45/4kg (RMB 210-220/4kg) and for 28-30pcs at USD 67.86-69.33/10kg (RMB 460-470/10kg).

Also, Gillian Liu, Tridge’s Distribution Manager in China, has reported that a single container of Peruvian avocados was available at the Shanghai wholesale market. “Due to the low arrival volume, even though the prices were high, many consumers still bought the product; 18 pallets of avocado were sold completely on that particular day,” she reported.

For the 2022 season, avocados were oversupplied throughout the northern and southern hemispheres, so there was a lot of fruit at the beginning of the year, which marked the start of the campaign with low prices. However, the avocado supply for 2023 is expected to be more evenly distributed throughout the season, without large volumes being excessively concentrated in just a few short weeks.

Peruvian avocado prices are expected to remain higher in main importing countries than last year. With the Chilean export season coming to an end soon in the Asian markets, Peruvian avocados promise to have an active role in the Chinese market this year, driven by the Chinese consumer demand for avocados that are willing to pay a higher price for the fruit. It is also expected that the volume of shipments coming from Peru will gradually increase throughout the season, pushing down prices slightly. However, prices are expected to remain higher than last season.

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