Bancolombia published a report on the global perspectives of avocado, highlighting that “there's more avocado in the world than demand for this fruit.” The accelerated growth of new plantations has created an excess that has lowered the prices of the product.
This situation was especially evident in the European market in 2022, when Colombia had its lowest export price in 5 years (US$1.60 per kilo). In contrast, the oversupply from the United States had no serious impact because of production problems in Mexico during the first half of last year. The supply shock came in the second half of the year.
Another of the conclusions of the report is that the Peruvian export window increasingly affects prices. Peru doubled its avocado exports between 2017 and 2022, reaching almost 600,000 tons exported. This depressed prices between April and September, especially in the European market, where Peruvian supply leads. “Inevitably, the increase will continue in the following years,” the document states.
The report also highlights that while Peru harvests between April and September, Colombia produces avocado all year round, with two peaks between January to May and October to December.
Bancolombia points out, however, that, in the case of Europe, both Colombian supply peaks are outside the Peruvian influence and at the time of better prices. “In addition, regarding the US market, Colombia's first production peak of the year coincides with the Super Bowl, when the avocado achieves the best prices in the US.”
What to do?
The first proposal to overcome this scenario is to work hard on promoting the product, a factor that has been key to marketing avocados in Europe and consolidating its peak in the US Super Bowl. In addition, the country should promote avocado consumption in North America at other moments of the year, such as the end of the year. Meanwhile, Europe is cutting resources for promotion due to concerns about the crop's water footprint in Peru and Chile, so the key may be in exploring new presentation formats.
Moreover, Colombia shouldn't focus its expectations on China, which had a promising period between 2014 and 2018 in which it multiplied its avocado imports by 10, which generated the illusion that this growth rate would be maintained over time. However, that hasn't happened. This dynamic slowed down starting in 2018 and in the last years, Chinese demand has had its highs and lows. In 2022, China imported 41,000 tons of avocado, a very similar volume to the one achieved in 2018.
Source: agraria.pe