The Mexican avocado market is facing a scenario of uncertainty after the announcement of 25% tariffs by the U.S. government; a measure that has been postponed twice and is now expected to come into force on April 2. This situation has generated concern among producers and exporters, who are highly dependent on the U.S. market.
Luis Enrique Ortiz Madrigal, director of Grupo Enorma, says that his company is devoted to the production of avocado plants and harvesting for export. Despite not trading directly, the sector's entire value chain is affected by these tariff measures.
According to Ortiz Madrigal, sizes in the 2024-2025 season are smaller than in the previous year and this has resulted in variations in prices at source. "The price of larger sizes, like caliber 48, is better than that of smaller ones, like 70, which have predominated this season," he says.
Climate change has played a determining role in this situation. Avocado flowering has been affected by droughts, and this has led to delays and yield losses in older orchards. "There are orchards that used to produce twice as much and now barely reach 9 tons per hectare," says Ortiz Madrigal.
The announcement of a 25% tariff on Mexican agricultural product imports has generated uncertainty in the sector. Although the measure has not yet come into force, its implementation would mean a severe blow to producers. "The question is who is going to be most affected by it. As always, the producer is the first link in the chain and one of the worst hits," said Ortiz Madrigal.
This tariff could have a direct impact on prices in the U.S. Avocados are currently sold at source for 3 dollars per kilo, while in the U.S. market, they reach 6 dollars per kilo in places such as McAllen, Texas. With the application of the tariff, the price could increase by approximately 1.50 dollars per kilo, which would make the product more expensive for the end consumer without Mexican producers necessarily benefiting from it.
Moreover, the "super peso" phenomenon has taken a toll on producers' profitability in recent years. "When the exchange rate fell, the price in dollars of avocados remained the same, but in Mexican pesos, it represented a loss of 25%," says Ortiz Madrigal.
Despite the uncertainty, Ortiz Madrigal doesn't believe that the tariff will be a permanent measure. "It's a double-edged sword for the U.S. because there is no other country that can supply the market 365 days a year like Mexico does," he says.
While other producing countries could see an opportunity in this situation, Mexico's proximity remains its main competitive advantage. "A Mexican avocado can be on the Texas market in 24 hours, while for the fruit from South America, the process is much slower," he says.
The market's future will depend on the negotiations between the Mexican and U.S. governments, as well as on how consumers respond. For its part, the Mexican avocado sector remains on alert in the face of a possible economic blow that could redefine its export strategy.
For more information:
Luis Enrique Ortiz Madrigal
Grupo Enorma
Tel: +52 33 17698334
e.ortiz@grupoenorma.com
www.hydrobit.ag