Global avocado trade is expected to grow in an increasingly competitive market, according to a new Rabobank report.
Global avocado trade will continue to grow in the next few years, but the market will be more competitive, forcing operators to be not only more efficient, but also increasingly sustainable, according to a new report by agribusiness banking specialist Rabobank.
In the report Global Avocado Growth Far From Over, Rabobank says global avocado production expanded by a compound annual growth rate (CAGR) of about seven percent during the past decade.
“Attractive prices and returns during that period were relevant drivers to expanding production in key regions,” Rabobank Global Strategist – Fresh Produce, Cindy van Rijswick said.
The report says production in Mexico – which currently accounts for 30 percent of global avocado output – grew by a compound annual growth rate (CAGR) of about six percent during the past decade. In Colombia (which accounts for 12 percent of current global avocado production), Peru (nine percent), and Kenya (six percent), production increased by a CAGR of approximately 15 percent,12 percent, and 11 percent respectively over the same period.
On the other hand, the US, which was still among the world’s largest avocado-producing countries in 2012, dropped a few places in the ranking and is no longer a top 10 global producer. “Increased avocado production in countries with complementary harvesting seasons has allowed year-round availability in key markets, including the US, the EU, and some markets in Asia. While production in Mexico extends year-round, it reaches a seasonal low in June and July, when production peaks in the US (California) and Peru, providing steady supply to the US market,” the report says.
Mexico remains leading exporter
“With exports increasing at an average annual growth rate of around eight percent over the past decade, Mexico reaffirmed its place as the largest avocado-exporting country in the world, surpassing one million metric tons in 2022,” Ms Van Rijswick said.
The report says the primary destination for Mexican avocado exports is, by far, the US market, where product versatility and promotional campaigns have helped to create demand for avocados in retail and foodservice channels. Globally, the US remains the largest destination market, with imports increasing by a compound annual growth rate of about eight percent from 2012 to 2022.
Among the next largest avocado exporters, Peru, Spain, and Kenya exports expanded by a CAGR of 22 percent, six percent and 15 percent respectively between 2012 and 2022. These countries mainly supply the European market.
Behind the US, the largest avocado importers between 2012 and 2020 were the Netherlands, Spain and France. Over this period, import volumes into these countries increased by a CAGR of 14 percent, 20 percent and eight percent respectively.
Global avocado market worth about USD18 billion
According to the report, the global commercial market value of fresh avocados is estimated to be around USD18 billion in 2022. “We believe there is room for significant growth in several markets around the world, as per capita consumption is highly variable,” Ms Van Rijswick said.
In terms of per capita avocado availability (which is used as an indicator of consumption), Mexico leads, with a global record of about nine kilograms of fresh avocados per person per year, followed by Chile with almost eight kilograms. Australia and the US complete the list of countries with over four kilograms per capita.
The report says sustainability concerns remain on the agenda for avocado producers, with water usage the main issue. Partly because of this, avocado growers have invested in advanced irrigation systems to improve water efficiency.
New Zealand
In 2022, the report says, New Zealand export volumes dropped 20 percent, due to a combination of sufficient supply in Australia, decreased demand from destinations in Asia, and lower supplies of export-quality fruit.
“Despite the growth in market diversification in recent years, 2022 brought volatility to the global economy, which weighed on demand for avocados,” Rabobank associate analyst Pia
Piggott (pictured) said. “Weakening currencies in Asia, higher avocado prices, and increased reefer container rates were not supportive for New Zealand avocado demand. And we expect some of these headwinds to continue in 2023.”
Ms Piggott said New Zealand avocado production was affected by La Niña, with significant wet weather events causing waterlogged soil, poor pollination and a higher-than normal reject rate in 2022.
“We expect the 2023 season to bring lower production, followed by a bumper crop in 2024. With plenty of production growth expected in the next few years, rebuilding market share in Asia will be a priority for securing demand,” she said.
