In W42 in the avocado landscape, the avocado industry is experiencing growing worldwide consumption, with new origins, including Africa and Southern Europe, joining the market. Hass avocado is the dominant variety due to its longer shelf life and ability to travel. Mexico, Peru, Colombia, Chile, Spain, and South Africa are the major producers of this variety. Climate change, including the El Niño phenomenon, impacts avocado crops, affecting fruit set and flowering. Challenges for producers include high freight rates, demand meeting increased supply, and maintaining productivity and efficiency. Water projects like the Valle de Olmos in Peru improve production and help bring early-quality fruit to the market.
Excluding Lima and Callao, Peru's interior regions saw an overall increase of 1.5% in exports between Jan-23 and Aug-23, with ten regions contributing to this growth, accounting for 84% of the country's total exports. In Northern Peru, Piura and La Libertad excelled, with notable growth in various sectors, including avocados, fuel oil, squid, calcium phosphate, and fish meal. In 2023, exports from Peru's interior regions reached USD 52.86 billion, indicating their growing significance to the country's economy.
Furthermore, in Aug-23, the Agricultural Production Index in Peru experienced a 4.05% decrease compared to Aug-22, mainly attributed to reduced production within the agricultural (6.25%) and livestock (0.45%) subsectors. Decreased year-on-year (YoY) production levels were experienced across various agricultural products, including asparagus (20.38%), olive (70.83%), paprika (61.12%), oil palm (21.70%), corn (42.40%), avocado (6.94%), and several others. The challenging conditions, including El Niño Costero, socio-environmental conflicts, and technical and climatic factors, significantly hindered the country's productive activity.
Peru's avocado export sector faces significant challenges in the coming years due to the threat of the El Niño weather phenomenon. Despite being a major global exporter, adverse weather conditions are forecasted to reduce agricultural export revenues by 5% YoY in 2023. The Association of Agricultural Producers Guild of Peru (AGAP) expressed concern over the impact of El Niño, which has intensified production issues across various crops. The Piura region in Northern Peru, susceptible to heavy rains during El Niño events, faces particular vulnerability. With the potential for an intense El Niño event in 2024, the agricultural sector remains uncertain about its prospects.
In the European market, there has been an increased supply of avocados from Latin America. Nevertheless, the market still faces shortages due to the sharp decline in Peruvian avocado arrivals and shipment delays from Chile. The average retail price stood at USD 5.25 per kilogram (kg).
Lastly, hail storms in Spain have caused significant agricultural damage, particularly in regions of Valencia. These storms affected nearly 15 thousand hectares (ha) of vineyards, leading to extensive losses estimated at USD 42.67 million (EUR 40 million). The damage includes the destruction of grape harvests just before they could be gathered, impacting many winemakers. Losses also extended to avocados, citrus fruits, cacao, almond trees, olive trees, and rice crops. One severely affected area, Utiel-Requena, saw losses exceeding USD 12.80 million (EUR 12 million) and is expected to experience a decline of over 60% in the upcoming harvests. The Valencian Farmers' Association (AVA-ASAJA) has called on the government to implement measures to alleviate the economic impact on affected farmers.