1. Weekly News

Global

Avocado Market Size Estimated to Reach USD 21.55 Billion by 2028

The avocado market is predicted to experience significant growth, reaching USD 21.55 billion by 2028, with a compound annual growth rate (CAGR) of 7.3%. This growth is driven by increasing demand from the food and beverage industry, particularly in North America, which currently holds the largest market share. The market has grown from USD 15 billion in 2023 to USD 16.24 billion in 2024 at an 8.3% CAGR, fueled by health trends, dietary shifts, culinary changes, supply chain enhancements, and globalization.

The food and beverage industry's increasing demand for avocados will drive market growth. Valued for their nutrition and versatility, avocados benefit heart health, digestion, and weight management. The industry is investing in new storage to improve efficiency and reduce waste. Leading companies use artificial intelligence (AI) to meet demand for precision farming and supply chain optimization.

Europe

Europe's Growing Avocado Market Struggles with Global Oversupply

The European avocado market is expanding but is struggling to keep up with global overproduction, mainly from Latin America. In 2023, European demand grew by 9%, yet consumption remained lower at 1.6 kilograms (kg) per person per year compared to the 3.5 kg consumed by Americans. Experts believe that global avocado production has not peaked, posing challenges ahead. Unlike the well-funded Hass Avocado Board in the United States (US), the World Avocado Organization (WAO) faces financial constraints in promoting avocado consumption in Europe. Despite this, the WAO remains optimistic, expecting a 10% annual growth in European consumption and adapting marketing strategies to European eating habits.

India

Westfalia Fruit India Introduces Kenyan Avocados to Indian Market

Westfalia Fruit India has successfully introduced Kenyan avocados to the Indian market, marking a significant milestone in the country's avocado market development. The company has established itself as the market leader and largest importer of avocados in India, with over 60% market share of Tanzanian avocado imports and 85% of all Australian avocados imported into the local market. With the arrival of Kenyan avocados and recent market access confirmation for South African avocados, the company has steady volumes of consistent quality avocados lined up for this year. The Indian market for imported avocados has grown at 100% year-over-year (YoY) for the last two years, with the first quarter of 2024 doubling avocado imports from approximately 4 thousand metric tons (mt) in 2023 to 8 thousand mt in 2024.

Mexico

Mexican Avocado Industry Under Pressure Amid Severe Drought

Mexico is experiencing a severe drought, with rainfall nearly halved over the past year. This has had a significant impact on avocado trees and subsistence farmers. This has prompted subsistence farmers to act against commercial orchards and illegal avocado plantations, which demand significant water and deplete mountain water sources. In Michoacán, rivers and lakes are vanishing due to increased water usage. Farmers and activists in Villa Madero are removing illegal pumps and unlicensed irrigation ponds as streams, springs, and rivers dry up, with water being diverted for avocados and berries.

Additionally, residents of El Sauz propose giving landowners 20% of local stream water in exchange for allowing the remaining 80% to flow freely. Targeting avocado trees could have serious consequences, as drug cartels have infiltrated the industry, protecting this lucrative business. State police are monitoring lake shores and arresting individuals extracting water with trucks. The problem of illegal avocado plantations has become a political concern, with the US Ambassador stating that the US will not import fruit from these plantations due to their role in deforestation. Organizations are urging the US to halt avocado imports linked to deforestation.

Peru

Peruvian Avocado Exports Surged by 46% YoY in Q1-24

In Q1-24, Peru's avocado exports surged, reaching over 105 thousand tons, a 35% YoY increase, totaling USD 233 million. These avocados were shipped to 29 countries, with the Netherlands emerging as the primary market, accounting for 39% of the exports. The Netherlands imported 41.1 thousand tons, a 35% YoY increase, with an export value of USD 92 million. The average price for avocados in the Netherlands rose by 10% to USD 2.23/kg . Spain followed closely, exporting 22.3 thousand tons, a 34% YoY increase, with an export value of USD 52 million, an increase of 43% YoY. China also showed significant growth, becoming the third largest market for Peruvian avocados, importing 14.4 thousand tons, a 30% YoY increase, with a 38% YoY increase in the average price.

Avocado Production in Peru Surged by 47.4% YoY in Feb-24

In Feb-24, Peru's avocado production increased by 47.4% YoY, reaching 57.2 thousand tons. This increase was due to larger harvests and favorable ripening conditions. Most avocado production came from Lima, Ica, Ayacucho, and Huancavelica, accounting for 63.1% of the total. However, avocado production in Lambayeque, Apurímac, and Áncash declined.

Netherlands

Rotterdam Wholesale Market Adjusted Prices for Hass Avocados from Colombia, Tanzania, and Peru in Response to Market Demand During W12

In the wholesale market of Rotterdam, the Netherlands, prices for Hass avocados from Colombia, Tanzania, and Peru adjusted from W11 to W12 in response to market demand. Colombia's Hass avocados (12 to 24, 4kg box) increased from USD 13.99/box to USD 14.53/box, while (26/28/30/32, 10kg box) decreased from USD 30.14/box to USD 27.99/box. Peru's Hass avocados (14 to 18, 4kg box) remained at USD 15.61/box, and (20/24, 4kg box) stayed at USD 13.99/box. Hass avocados from Tanzania were also unchanged at USD 13.99/box for calibers 12 to 24.

2. Weekly Pricing

Weekly Avocado Pricing Important Exporters (USD/kg)

Yearly Change in Avocado Pricing Important Exporters (W18 2023 to W18 2024)

Mexico

Avocado prices in Mexico has slightly increased by 6.54% week-over-week (WoW) from USD 2.6/kg to USD 2.77/kg in W18. Furthermore, a 30.39% month-on-month (MoM) price increase is due to a new national marketing program in the United States (US) leading up to Cinco de Mayo. Moreover, concerns about environmental impact, specifically deforestation for avocado plantations, have also been raised. Despite international agreements to stop deforestation by 2030, doubts remain about their effectiveness, given the significant avocado trade between the US and Mexico.

Peru

In W18, the wholesale prices of avocado in Peru has slightly decreased by 4.76% WoW. The decrease in Peru's avocado prices in W18 can be attributed to the global avocado market's challenges. Reduced outputs in primary producing regions like Mexico and California, along with water scarcity in Chile, have affected global avocado supply. Despite these challenges, high consumer demand is expected to keep Peruvian avocado prices relatively high. Peru is aiming to increase exports to the US and Europe to address global shortages, which could help stabilize prices in the future.

Spain

The avocado market in Spain has seen significant growth in recent years, driven by increased production, imports, and changing consumption patterns. Over the past decade, global avocado production has nearly doubled, with marketing multiplying by 150%. Despite having minimal production, Europe leads in imports. Spain, historically a major avocado exporter to France, has experienced a shift in consumption patterns, with domestic consumption rising sharply. In W18, the price of avocado slightly declined to USD 2.31/kg, marking a drop of 1.28% WoW. Consumption figures in Spain are approaching those of the US, with per capita consumption likely to exceed 4 kg.

Chile

In W18, wholesale prices for Chilean avocados dropped by 17.56% WoW to USD 3.38/kg. The price decrease is partly due to the implementation of a solar energy program by the Chilean Agricultural Research Institute (INIA). This program aims to reduce irrigation costs and increase crop area, especially for avocados. This increase in production efficiency could lead to higher avocado yields and lower production costs, potentially affecting market prices. However, global demand and international market conditions also play a role in determining avocado prices.

Colombia

Wholesale avocado prices in Colombia have surged by 28.66% WoW from USD 4.10/kg to USD 3.38/kg in W18. Additionally, there is a 20.38% MoM price increase but a 119.79% YoY decrease. This price volatility is driven by a transition between harvests, which has limited product availability and increased demand. The rise in domestic demand for avocado paste and oil has also contributed to the notable price hikes, alongside weather conditions such as the impact of El Niño. Despite these challenges, Colombian avocado exports have increased, with efforts to enter new markets, highlighting the industry's resilience and importance to Colombia's economy.

3. Other Outstanding Price Anomalies

South African Avocado Prices Dropped by 41.45% YoY in May-24 Amid Oversupply

South African avocado wholesale prices have dropped by 41.45% YoY, from USD 0.89/kg on May-23 to USD 0.52/kg on May-24. This significant price decline can be due to the expected increase in avocado production in South Africa in 2024, leading to an oversupply situation and subsequent price decreases.
Moreover, South Africa heavily depends on exporting avocado, with 63% of the crop going to the Netherlands, Ukraine, and Russia. If the demand in these markets does not increase along with the increased avocado supply, it could result in much lower prices as avocado producers compete to sell their avocados. While many avocados grown in South Africa are sold in local markets where it's hard to know the prices, selling more locally might not be enough to sell all the extra supply of avocados. This could be a bigger problem if people don't have enough money to buy avocados at higher prices because of economic issues.

Lastly, the prices of South African avocados could face pressure from emerging markets such as China and Japan, as other avocado-producing nations are increasing their exports. Additionally, the cyclical nature of avocado production, where some trees have a productive year in 2024, is also a factor contributing to the price decrease.

4. Actionable Recommendations

Diversify Sourcing Channels

Given the projected growth in the global avocado market, importers and retailers should diversify their sourcing channels to ensure a stable and diversified supply chain. Explore emerging avocado-producing regions beyond traditional sources like Mexico and Peru to mitigate risks associated with oversupply and climate-related disruptions.

Implement Flexible Pricing Strategies

Avocado traders and retailers should closely monitor global pricing trends and adjust pricing policies in response to fluctuations in supply and demand dynamics. Implement flexible pricing strategies that account for changes in production levels, import tariffs, and currency exchange rates to maintain competitiveness and profitability.

Promote Sustainable Production Practices

Encourage sustainable avocado production practices to address environmental concerns such as deforestation and water scarcity. Collaborate with industry stakeholders, government agencies, and local communities to promote responsible cultivation methods, efficient water management, and forest conservation initiatives.

Enhance Market Access and Promotion

Support initiatives that enhance market access and promote avocado consumption in emerging markets. Invest in marketing campaigns, consumer education programs, and product innovation to stimulate demand and expand market opportunities beyond traditional consumer demographics.