Global trading platform TridgeGlobal trading platform TridgeGlobal trading platform Tridge
Intelligence & Data
Sign In
Current Plan
Intelligence & Data Solution
Get started with Premium Plan of our Intelligence & Data Solution to get access to premium content and data in food and agriculture
Tridge analysis

Peruvian Avocados Turning Heads in China

Fresh Avocado
Tropical
Chile
Fruits
China
Jul 25, 2019
Written by
image
Anna Hommel
Contributed by
Share This Story
The Peruvian avocado export has grown by 24% between 2017 and 2018. Currently, it is the biggest supplier of avocados to China, exporting around 49.2 million USD. The Chinese market shows potential for growth, but there is fierce competition from Chile, Mexico, and soon, Kenya.

Over the last few years, Peru has been growing its avocado export massively and it is currently the 3rd largest exporter of the fruit in the world. The export value grew by 24% between 2017 and 2018, from 580 million USD in 2017 to 722 million USD in 2018. This was partly due to a greater demand for avocados in Asia, particularly in China.

Peru has been exporting to China since 2015, competing with Chile, Mexico, and soon Kenya. For a long time, Chile was the main supplier of avocados in China, but it was overtaken by Peru in 2018. Between 2017 and 2018 the country exported 49.2 million USD worth of avocados to China. China is the main market in Asia, but still only receives around 9% of the Peruvian avocado supply, according to GBP Services. The per capita consumption rate of avocados is still very low in China compared to that of Europeans, their current biggest market. However, China has a high growth rate, almost doubling every year. “The Chinese market is expected to match the European market in the overall consumption of Peruvian avocados in the following years.”

China proves to be an interesting market for exporters, not just because demand is rising, but also because price dynamics are starting to change. China experienced a big drop in prices this spring due to an oversupply from especially Chilean avocados. Last year in May, there was an extremely beneficial price for importers, which attracted many new companies. However, the demand did not rise as fast as the supply, which created an oversupply, putting downward pressure on prices to FOB of 9 USD per box. Currently, prices are rising again due to a natural shortage in the Chinese market, as the Chilean and Peruvian season is coming to an end and the Mexican season has yet to start. Prices are expected to reach FOB 18 USD per box.

Mexican and Chilean avocados are the main competitors for Peruvian avocados. Despite 10% tariff, Mexican avocado occupies the largest share of sales in the Chinese market with their price competitiveness. GBP Services mentions that the Chinese customers often assume that Mexican avocados are of superior quality, as they arrive ripe whereas Peruvian avocados must be transported green due to longer transportation time. Many Chinese customers do not know that Peruvian avocados need ripening upon arrival and thus assume that Mexican avocados are softer and of better quality. Therefore, most of the concerns about the Chinese market are related to teaching the Chinese how to eat avocados properly. To this end, multiple campaigns have been launched.

According to GBP Services, the Chinese market shows promising potential for growth. Transporting the avocados is becoming easier. Since 2014, Peru enjoys a tariff-free agreement with China, which has caused the import of avocados to increase quickly. Also, Peruvian avocados are even arriving by plane, which is more expensive but does provide more opportunities for supplying eat-ripe avocados. However, the company mentions that the new phytosanitary agreement between China and Kenya will impact their sales in China. They have already noticed the presence of Kenyan avocado in the Hong Kong market. Despite this, GBP Services remains confident that “the growing demand in the Chinese market will allow both countries to grow side by side.” 

Was this story helpful?
By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes. To learn more about our cookies, please read our Privacy Policy.