Avocados. We are anticipating some challenges with supply and availability for the foreseeable future. Freshview purchase all our avocados directly from one of the UK’s largest importers, and we have witnessed avocado prices leap on 5 occasions since March. Put simply, the rises are due to the huge drop off in availability of the fruit making its way to the UK. In the past week the situation has escalated, and sourcing fruit has become an increasingly difficult due to short in supply. This shortfall is coming as a result of the importers being unable to source enough fruit to satisfy the demand. Read on for full details as to why this is happening……

Global Avocado Market Overview
Due to the ever-growing popularity of avocados globally and issues within the supply chain, Europe will be facing some significant challenges during the coming months. The lack of avocados on the European market is a consequence of the huge surge in popularity in the United States and China. Due to demand and the higher prices being paid by these two nations which is seriously hampering availability in Europe. Currently, Peru, Mexico and South Africa are the countries in production.

News from the growing nations

Peru: Lower production than last year
With harvest figures at 351,000 tons last year this sees Peru are the largest exporter of avocados in South America, though as avocados trees are alternate bearing, meaning trees can yield more one year and less in the following year, this year’s harvest is expected to drop to 305,000 tons. Of which 55-57% is intended for export to the US, 27-30% to Europe, 9% to Asia and the remaining to South America and Canada.

Mexico: Record prices for avocados
Last week the price for Mexican avocados reached a record price of 650 pesos (£27/$33) per 10 kilos. The price has been increasing since the end of April due to a lower yield of avocados, and it is expected that by the end of July the supply & demand will have got more critical and forcing prices higher. The Association of Avocado Growers in Mexico expects more than 1 million tons of avocados to be exported to the US in the 2019/2020 season (an increase of 5.23%), leaving just 188,513 tons available for export to other markets.

Chile: Not yet in production
It will take another two to four weeks for the Chilean avocado season to start and there is a good chance that the country will purely focus just exporting the bulk of their avocados to the US due to the favourable prices there.

Kenya: Avocado exports boosted by trade agreement with China
Weather issues has seen a reduction in Kenya’s avocado production. It has been the worst season ever for the Fuerte variety, with one trader reporting a fall of 20%. Currently Kenyan avocados are mainly intended for Europe and the US but this will change once the Trade Agreement with China becomes fully active, seeing 40% of avocados going to the Chinese market. In 2017, Kenya accounted for 38.9% of Africa’s total avocado exports and 1.3% of the fruit’s global trade.

South Africa: A major supplier for the European market
South African avocado growers have reduced their production estimates down to 14.5 million 4 kilo boxes. That is a million less than originally expected and 30% less than last year’s record harvest. Hass prices are on the a steady increase and see no sign of stopping. The most significant market for South African avocados has traditionally been Europe, however crop is now being increasingly shipped to the US to attain higher prices and his is having a major impact on supply to Europe.

News from our neighbours in Europe, facing the same challenges as the UK

The Netherlands: Avocado market changing completely in one and a half months
Although the avocado market is usually a bit slower in the summer, this is not the case this year. Dutch importers say that the market has completely changed in a month and a half. The main reason is that almost all Mexican avocados are now going directly to the US. What remains is the production from Peru, Colombia and South Africa, supplemented with some small shipments from Kenya.

Belgium: Avocados sold before they reach the market
There is a serious lack of avocados currently on the market in Belgium, seeing them sold even before some importers have received them. There is simply too little available to meet the market demand and the prices are therefore high.

Germany: Hardly any volume available
The German avocado market is currently at an impasse: Until recently, there was enough available to meet the demand, but the situation has changed in recent weeks. “At the moment, there is hardly any volume available and we have to be happy with every batch that comes in,” reports an importer from Hamburg. The prices are therefore extremely high and fluctuate around €20 per 4 kg package. The main supplier of summer avocados is currently Peru, supplemented with some small volumes from Kenya and other countries. Partly due to the shortage on the market, there is currently no demand for alternative varieties and only the Hass is sold.

France: Prices will not fall until November
In general, the season has been completely different to last years. This time, the Peruvian production being volume has fallen by 12%. California has grown little, so the US market is demanding a lot from production countries in Latin America with high prices. This is resulting in fewer avocados being shipped to the European market. The prices are therefore high and amount to around €15-17 / 4 kg. Prices will only fall around November with the arrival of Spanish and Israeli avocados. The demand is still outgrowing the supply, especially for the Hass, while the “greenskins” are not as popular.

Spain: Domestic consumption on the rise again
At the end of May, the yield from the avocado harvest in Spain was 55,000 tons, with prices at origin oscillating between €2.50 and €3 per kilo. The crop’s cultivation is expanding in Spain, just like in the rest of the world, and the demand for avocados continues to grow. Spain currently has more than 15,000 hectares devoted to avocados, half of which are in Malaga; however, it is difficult for avocado cultivation to expand in this region due to water management, so new areas are being planted in other regions, such as Huelva, Cadiz, Valencia, Alicante and also Portugal to try and keep up with demand however these plantations are not expected to yield any significant volumes this year.

Italy: Production of Sicilian avocados is increasing
The avocado season has just ended in Sicily, and when looking at the entire year, the figures show an upward trend with the demand higher than the supply. Sicilian avocado cultivation is not yet in full production and this year at 50% of capacity. This season 700,000 tons of avocados were grown, mainly Hass with Fuerte at a lesser extent. The sizes of the Italian fruits are average, and the new season is currently delayed by a month or two due to the cold spring. South African avocado prices are currently rising on the wholesale market, while the price of the Peruvian Hass avocado has risen on the market in Rimini to around €21 / 4 kg.

The two biggest markets for Avocados

China relies on import markets
Avocados are gaining popularity in the Chinese market, especially among the younger generations, as young people have more health-oriented lifestyles and avocados are a nutrient-rich fruit. China is fast becoming a local producer of the fruit, even though the country still largely relies on imports from Mexico, Peru and Chile. The price raised significantly in June and has continued to increase in July due to shortages caused by being unable to import large volumes from Chile at the same time. Currently, the price is continuing to rise, the import season of Peruvian avocados is almost over and the Mexican avocados are arriving in small numbers. This naturally pushes up the price, which is now over 100% higher than in the same period last year.

United States: Market supply on the rise
The harvest in California has been significantly smaller this season. A yield of over 77,000 tons of avocados was estimated, compared to 170,000 to 181,000 tons a year earlier. The price for half a kilo of avocados was $1.70 in April, since then has risen sharply to $2.70. Outside of California, the US imports avocados from Mexico and Peru. The price of Mexican avocados has risen sharply and due to price developments on the US market, and to capitalise on the fruits increasing popularity in the US Peru has shipped the majority of its production to the US, instead of Europe. The old Mexican harvest is ending in 2 weeks and the “Flora Loca” harvest started on July 1st. Mexican growers are not accustomed to attaining such high prices currently paid for avocados (120 Pesos per kg, as opposed to the usual 20-30 Pesos per kilo). When California and Peru are out of production, a further significant price increase is expected again, this will take place between August and September, when most avocados will come from Mexico.