At the moment, Mexico and Chile dominate the market, but their volumes are declining. In Europe, there is also an on-going switch to the productions from Israel, Spain and other countries around the Mediterranean, where the season is in full swing. Many traders expect prices to remain high.
Netherlands: Stable, high prices for avocados
In the Netherlands, avocado sales have been good during the holidays, with stable, high prices. Importers expect this market situation to continue in the coming weeks. Fewer Hass avocados have been supplied by Colombia, which means that their prices are higher than those of the traditionally more expensive Spanish Hass avocados. For the Greenskin avocados, the key supplier is Israel with its Pinkerton. This market is characterized by a shortage of large sizes, whose prices are also at a high level.
Germany: Difficult avocado market
As a result of the current market developments and the extension of the lockdown, the situation in the avocado market is extremely difficult. Due to the closing of restaurants, the volume purchased in the wholesale trade has been reduced, and there is still a shortage of air freight capacity.
Volumes are stable across the board, with few excesses. Wholesale prices fluctuate around 10-12 Euro per colli. “The current surcharge for air freight, in combination with the seasonal supply of European tropical fruits, means that citrus and pomegranates are more likely to be purchased than pineapples and avocados. We see that clearly reflected in the market situation,” said a wholesaler.
France: Several origins on the market
On the French market, the supply from Mexico, Chile and Columbia is currently coming to an end and the first avocados are arriving from Israel, Spain and other Mediterranean countries. However, the harvesting is limited due to the cold weather and rain. Prices have risen slightly, but the demand is currently stable.
Spain: Prospects for January and February are favorable
This year, the avocado harvest is expected to be about 10% smaller in Malaga, the main production area of this subtropical fruit in Spain, although this could be offset by the entry into production of new plantations in other production areas of Granada, Cadiz, Valencia, Huelva and Portugal. The Spanish avocado season started in October with the Bacon variety, which had good sales in the first weeks. As of late October, sales fell by about 30-40%, given the growing uncertainty caused by the pandemic continuing to spread and the stricter containment measures enforced in every country and region.
After the worst Christmas campaign of the past 10 years, sales are now starting to recover. In the past 3 weeks there has been a lot of speculation in Spain and prices are too high, reaching around 3 to 3.50 € per kilo at origin. With those prices, the demand stagnated, but now European retailers are starting to buy more from Spain. However, there is still fruit from many origins, such as Colombia, Mexico, Israel and Chile, and this is causing confusion in the markets. According to a Spanish importer, grower and trader, the Chilean campaign is now nearing its end, the supply of Colombian avocados is more limited and the quality of Mexican avocados is lower; therefore, Spanish avocados have better options in the markets and will have an interesting gap until March. In terms of sales, the prospects for January and February are good. The hospitality industry is still closed in many countries and this is taking a toll on sales, but overall there will be good demand as long as there is not too much speculation. There will be more competition from March, as Peru and Kenya will start their seasons. Peru expects about 20% more production this year.
South Africa: Harvest of the earliest avocados starting next month
In January, there is a shortage of avocados on the domestic market. Prices amount to around 32 ZAR (1.70 Euro) per kilo.
The earliest avocados in South Africa will be picked next month in the most northern regions, such as Levubu, in Limpopo province. The weather conditions are good at the moment. Much rain has fallen, replenishing the reservoirs. It is still too early to give any estimates about how the coming season will go, but the prospect is that more avocados will enter the market, given that more avocado trees have been planted. The CEO of the South African Subtropical growers association said that the fruit set of the avocados is not as good as expected.
United States: Avocado prices on the rise
After a significant decline, the price of avocados has increased and may continue to do so. Currently, Mexico is the only player in the market shipping avocados, as Peru, Chile and California have finished their seasons. California expects to ship avocados to the market again in April. “In Mexico, the harvest is now underway in the higher altitudes,” says a North Carolina importer. “Production is now lower than two weeks ago. In some areas, the number of harvest permits per day, per municipality, has been limited from 180 to 120. With this, they aim for prices to improve.” By reducing the supply, the price for Mexican avocados has increased from $ 19 per box of 48's to $ 26 per box. Prices are expected to continue increasing in January and February.
There are more factors playing a role in this. Frost hit Mexico in early 2021, which could have affected thousands of hectares. This may also have consequences for next year's harvest. Growers in Mexico are also concerned that the frost will continue in January. Still, growers are motivated to keep picking, as the trees are already blooming. With the avocados ripe for picking still on the tree, this could lead to sizes being smaller. This year, the volume of avocados is expected to increase by 71,000 tons.
Mexico: More volumes going to Europe
Production is going well, but due to the lower demand due to the closing of the food service, there is some oversupply on the market. The state of Michoacán usually exports almost all of its avocados to the United States, but some of its volumes have also been shipped to the EU in the past month due to lack of demand in the US. The state of Jalisco is unable to export to the US, so the EU is already a regular market for its avocados, but with the volumes now also coming from Michoacán, there is a high supply in the market. Mexican avocado prices have dropped significantly; by about 50%, compared to last year. Jalisco is working to gain access to the US market for its avocados, which would open up many new opportunities for producers there, as the US is one of the world's largest buyers of avocados. This year, 71,000 tons more are expected there, compared to last year.
China: More origins allowed on the Chinese market
More countries received permission to export avocados to China last year and the range of avocado varieties is also becoming increasingly diverse. Chile and Mexico currently dominate the market, although the Chilean season is coming to an end and the focus is shifting more to cherries. The quality of the Mexican fruit varies, so there are considerable price differences. Mexican imports are also facing logistical challenges. Shipments are not arriving on time, so the products being sold on the market come from storage.
Over the last year, the Dominican Republic and Colombia have also exported to China. Colombia is a especially popular supplier among Chinese importers and some companies have purchased more batches. Nevertheless, there are still problems with the import due to the coronavirus. California avocados also have the potential to enter the Chinese market.
Some Chinese avocado companies are starting to grow domestic fruit in the Yunnan province and investing in local avocado ripening centers. Chinese companies expect the market to recover and consumer demand to increase after the cherry season, as avocado is considered a "superfruit" and, due to the coronavirus, many people in China are aiming to eat healthier.
Australia: Smaller harvest offers opportunities to New Zealand and Chile
Australia is now well into the summer season and, as expected, the supply has been reduced. Most of the domestic production at this time of the year comes from Western Australia, with some small volumes from Central New South Wales and the Tristate (Victoria, South Australia and the rest of New South Wales).
During the Christmas season, New Zealand actually accounted for most of the shipments to Australia, and for the first time, small quantities were also shipped from Chile to Australia. The opportunity for New Zealand to increase its supply and the arrival of the first Chilean shipments were possible because of a reduction in the harvest in Western Australia, where several cold fronts and storms took a toll on the production.
The industry association Avocados Australia says this situation is likely to be limited to the 2020/21 season, as more of the land's new plantings are becoming productive. Australia expects to produce around 115,000 tons by 2025, which should be enough to meet the country's domestic demand. The domestic market is still supplied with the Hass, although a small number of orchards in North Queensland are reportedly preparing for an early Shepard harvest.
