Record-Breaking Year for Peruvian Avocados

Published Jun 10, 2021

At the beginning of 2021, the USDA estimated in its report forecast that Peruvian avocado exports would reach 450,000 metric tons in volume this year, which would represent a 10% increase from 2020. However, just in the first four months of the year, there has been a 32% increase in export volume and a 34% increase in value. Steady leadership in the EU market, new increasing demand in the US, and an expansion strategy into Asian markets have Peru's avocados experiencing their best year in numbers so far.

In April, avocado exports totaled USD 150 million in value, which means a 33.6% increase from the same month the previous year, while their shipped volume was 71,200 tons, representing a 27% increase. In addition, the price of avocados, which averaged USD 2.28 per kilogram, was 14% higher than that obtained in 2020. Avocado exports already increased 30% in 2020, compared to 2019, reaching a record of over 410,000 MT.

Source: Agrodataperu, Tridge

For Victor Quillay from Fruits Farms, a producer, packer, and exporter in Peru, the 32% increased in the first four months responds mainly to a commercial strategy. “Due to the shortages in other producing countries, prices in the first months of the year have been high, so producers like us have take advantage of this and harvested earlier. Which is the reason there is more volume over these months”, he mentioned. The exported volumes recorded won’t be available all year round, so he expects shipments to reduce for the following months.

Maintain Leadership in the EU Market

Peru is and has been Europe’s number one supplier of avocados for the last years now. In 2020, 52% of avocados were exported to the European market, with the Netherlands and Spain as the main destinations. The Netherlands accounts for 33.5% of Peru's export share, followed by Spain with 17.3%, and a few other countries like Belgium, Italy, and Germany complete the imports into the EU. According to the Peru Export Association (ASOEX), exports of avocado to the European market have increased 25% to its various destinations from 2019.

Peru has maintained its preference in the EU market, as other suppliers haven´t been able to grow their market share in key importing countries. The Netherlands, the second-largest importer in the world and the first importer in the EU, buys 31% of its avocados to Peru and has increased these imports by 23% from 2016 to 2020. A similar case happens in Spain, where 42% of their import avocados are from Peru, and there was a 25% increase in export value in 2020 from the previous year. Countries like Colombia, Mexico, and Chile haven´t increased their volumes in these markets.

Source: Tridge

The US Market can Make the Difference

Although Peruvian avocado exports to the world increased in 2020, exports to the US decreased by 32% by value and 9% by volume to USD 158 million and 80,000 MT. This decrease was mostly caused by better pricing in other markets. However, the US still accounts for 21% of total avocado exports in 2020. As the US is still the number one market globally, Peru is undoubtedly after a larger market share. According to Agrodata Peru figures, the US has only taken 1% of the avocados exported in the first four months of the year, while the Netherlands and Spain have taken 45% and 20%, respectively.

There is no doubt that the US has one major supplier: Mexico, from which it buys 90% of its imports. However, Peru follows the share with 7.5% of those imports. The key to growth that market share is to offer a good quality product from May through September when Mexican avocados are less available in the market.

According to the Peruvian Avocado Commission, shipments of avocados from Peru have been landing in US ports since mid-May and are programmed to continue into late September. For Mr. Quillay, the US market is highly dependent on Mexican production. “The price in the US market will be determined by how much avocados can Mexico provide and in which months. This generates an unstable market for the Peruvian avocado as it relies on the production of other suppliers.”

The New Chinese Market

Although the Chinese market has enormous potential and their import volume grows every year, only about 3% of the Peruvian avocado export volume was destined for the Chinese market in 2020. China has rapidly become an essential importer of fresh avocados worldwide; however, Peru and Mexico are the two countries that have been able to source avocados to the Chinese market for longer. In 2020, Peru had the most significant share of Chinese imports with 52%, followed by Chile with 30.3% and Mexico with 15.5%. Chinese suppliers had shifted over the years when Mexico used to be the leading provider of avocados. In 2015, Mexico used to have 84% of the Chinese import share, while Peru only had 1% and Chile 14.6%.

For Mr. Quillay, the Asian market is where the biggest potential for Peruvian avocados is. He mentioned, “major avocado suppliers might not putting enough attention to the Asian market, and Peru needs to take advantage of it. China, Japan, and South Korea are all stable markets that can pay a good price for Peruvian avocado.”

Peru was able to expand its market share in China since the market was open to Peruvian avocados in 2013. For the first four months of 2021, China still represents 3% of Peruvian exports. However, the market is forecasted to grow after pandemic restrictions are lifted, and China will return to its accelerated import growth. As already the leading supplier, Peru has significant opportunities to grow the export volume into the Chinese market and other Asian countries like Japan and South Korea.

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