Where is the price top for avocados?
The price for avocados has dropped the past few weeks. The volumes from Peru are drastically decreasing. "The sale is quieter during the summer months anyway, but I expect that the end of August and throughout September it's going to be tricky. Closing the gap between two origins takes some creativity," says Evy van Gastel of Special Fruit.
She is visiting various avocado growers in Peru at the moment and talks about the avocado season. "The South-African avocado season is at its end and Peru is halfway there. The harvest from Chile is expected to arrive in Europe at the end of September. Beside these three origins, there are some others, including Spain, Israel, Morocco, Kenya, Colombia, and Mexico. In South-Africa there are severe shortages, up to 40% less. The country had to deal with extreme droughts and a hailstorm in February in the region Tzaneen, which took the fruits of the trees due to the severity of the storm. Because of El Nino Peru has a smaller harvest than expected. "There is less harvest per tree and the sizes are smaller."Evy in Peru
Influence El Nino - negative in Peru, positive in Chile
She continues: "The weather phenomenon has caused high temperatures during the flowering of the trees, resulting in higher stress levels of the trees in Peru. The fruit developed less well than expected due to this. Because of the low dry matter content in the fruit there was unequal ripening of the maturing cells." Not everywhere does El Nino have a negative influence on the production. "Chile had a good season last year and this year a positive impact of El Nino is expected. The first measurements of the dry matter content in Chile showed 18% already, so they are on schedule. The first shipping has been planned, the earliest somewhere half August."
Price avocado more stable than mango
The prices are hard to predict. "The past few weeks there was a drop in prices, mostly the sizes 22-24 and the baby-Hass. South-Africa had more small sizes due to the drought this year, and these volumes overlap with Peru. This caused the drop in prices." Last year the avocado prices were quite stable. "There have been some changes, but the price of avocados is more stable in comparison with mangos. This year there were peaks in January and April due to the shortages."More export to Asia?
Avocados are sent to other markets overseas as well, are these more attractive in price? Evy: "It was remarkable that the Peruvian suppliers wanted to send more containers to Asia. We noticed this as well while setting the price conditions: higher price guarantees were asked of us. The volumes that have been sent to Asia are less than expected. The Protocol of Senasa is so severe that more containers are rejected than sent." She also
indicates that Asia is cherry-picking. "But 22 and 24 are their most important sizes. That is not always interesting for the suppliers. However, their revenues in the Asian countries are higher than in Europe. Outside of Japan, where they know the RTE, in most places in Asia the avocado is eaten green and hard. So there is a large market there to introduce the ripe product. Nevertheless, it is a fact that the avocado market in Europe is getting more and more inferior in the future."
Increase of consumption
The consumption of avocado is increasing. "Even though there are more hectares planted in a high tempo all over the world, the production cannot handle the demand. More and more markets are opened for import and export. Recently all Mexican states have received access to the USA and Asia. There have been set many records during the past year concerning prices. Sometime we ask ourselves where the top is; what price level is too high for the consumer to keep buying the product? In every way, the next few years the market will be interesting and dynamic."
Special Fruit - massive growth in Hass
The avocado volumes of Special Fruit grow every year with 20 to 25%. "We speak about the Hass-avocados in particular; Special Fruit handles Greenskin only limitedly. 90% of the products that we supply are RTE, so that is a market with potential", concludes Evy.