The US Halts Mexican Avocado Imports following the USDA's Temporary Suspension

Published Jun 19, 2024
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The US's recent suspension on Mexican avocados two days ago has temporarily halted avocado exports to the US market. With uncertainty surrounding when the suspension will be lifted, Tridge interviewed its in-house trading team to analyze and anticipate potential repercussions.

The United States (US) heavily relies on Mexico as its primary avocado supplier. According to the United States Department of Agriculture (USDA), between 2020 and 2023, the US imported approximately USD 2.65 billion worth of avocados from Mexico, which is 91% of its total imports. However, in a recent development, the United States Department of Agriculture (USDA) has temporarily banned Mexican avocados from entering the country due to safety concerns regarding its on-the-ground inspectors after an unclarified incident in early June. This ban stops all new avocado exports coming from Michoacán, one of two regions authorized to export avocados to the US. This region accounts for 80% of U.S. avocado imports.

Examining Possible Repercussions: Interview with Tridge Fulfillment Fruits & Vegetable Team

Tridge interviewed the in-house trading team, the fruit and vegetable fulfillment, and avocado trading experts to better understand this ban's repercussions over the next few days.

Golden Opportunity for Peru & Colombia

According to the Tridge Fulfillment team, the US has around one week and a half before its avocado supplies deplete. Although the exact price increases are too early to predict, there will be a sharp increase in avocado prices in the US, Peru, and Colombia.

Due to its proximity to the US, Mexico is a dominant avocado exporter to the country. This has led Peru and Colombia, the second and fourth largest avocado exporters, to primarily ship their produce to the European Union (EU). Therefore, the new temporary ban is a golden opportunity for Peru and Colombia to capitalize on the US market.

The Tridge Fulfillment Team anticipates several events in the coming days, including US buyers frantically contacting suppliers in Peru and Colombia to secure the first pick of available avocados. To maximize profit and capitalize on the ban, Peru and Colombia will likely impose high costs, such as air transport to export as much as possible to the US In return, this focus shift to the US market will lead to reduced avocado supply in the EU, where most Peru and Colombian avocados are primarily exported.

Worst Case Scenario?

According to the fulfillment team, the worst-case scenario would be if this issue remains unresolved until US avocado inventories are depleted.

However, the fulfillment team expressed doubts that the worst will come to pass, as neither country wants to reach that point. In 2022, the US authorities quickly lifted the suspension on Mexican avocados in a week, and a similar timeline is expected for this current temporary suspension.

Resolving this matter as soon as possible will be in the interest of both countries. As the world awaits how or when the suspension will be resolved, the fulfillment team will contact partners to keep track of the dynamic price changes of avocados and seek market opportunities. The team has reached out to growers and suppliers in Peru and Colombia. It will be interesting to see how this will impact prices.

To learn more, please visit the Tridge website to submit your RFQ or visit Tridge’s Fruits and Vegetables Catalog.

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