A Guacamole Crisis in Mexico?

Mexico is by far the most renowned country for avocados. In 2018, it produced around 2 million tons of avocado, making it the biggest grower in the world. On top of that, Mexican avocado exports account for 43% of global avocado exports, with an export value of 2.4 billion USD in 2018. Mexico is the main supplier of avocados to the United States. It exported 1.8 billion USD worth of avocados to the US in 2018, which accounts for a whopping 87.3% of total US avocado imports. However, the current market situation for avocados in Mexico is not ideal. Prices are extremely high, which has led to what some dub a guacamole crisis.

The demand for Mexican avocados has been rising. “We had a growth of 18% in exported value between 2014-2018. Total exported quantity grew by 11%,” stated Green Grown Fresh Produce. Export value to the US has grown by 16% over the same time period. The increased demand from the United States, however, is raising the prices of Mexican avocados. The demand from the US has increased due to a decrease in domestic production. Due to cold temperatures and wildfires in California, the production in California decreased by 48% to 79K tons. As California is the major producer of avocados in the US, the decrease in avocado production makes the US more reliant on Mexican avocados.

So far in 2019, Mexican production has been lower than during 2018. It is estimated that the total production so far has decreased by 1.2% or 10K tons. Combined with increased demand from the US and the threat of sanctions by the US government, prices have risen immensely. Especially as the supply of avocados between May and August is already lower than other months, current prices for avocados are too high for many Mexican buyers. This has led to a “guacamole crisis.” There have been reports of Mexican restaurants using squash for their guacamole instead of avocados, as they can no longer afford avocados. US companies have also started looking elsewhere for avocados.

The season for Mexican avocados is on the brink of starting. Over the next few weeks, avocados will reach peak ripeness and will be harvested by the farmers. Therefore, Green Grown Fresh Produce is assured prices will lower again. “The prices of avocados vary weekly.” Prices have already slowly been decreasing over the last few days, but the overall prices will be higher than they used to be due to increased production costs. With the season for Mexican avocados starting in the next few weeks, the prices are expected to decrease further.