Avocados in Charts: Peru – An opening window of opportunity

This is the third installment of the ‘in Charts’ mini-series on avocados. This week we take a deeper dive into Peru’s season and the role it is playing in the U.S. market.

Peru has a golden opportunity to produce right when the market most needs it – when the U.S.’s biggest supplier is least capable of delivering. Coming in on the heels of California, Peru happens to be counter cyclical to the Mexican season, hitting a perfect window of opportunity.

Another prominent feature of the Peruvian season is the rate at which it has been growing, rushing to keep up with demand right in the middle of the U.S. summer. In 2010 the U.S. Department of Agriculture (USDA) reported 300,000 pounds of imports from Peru, while in 2017 we saw Peru send an impressive 126 million pounds.

The impressive growth isn’t just a coincidence – pricing for avocados has been keeping up and even surpassing the industries expectations. June, July and August – right where Peru is most prominent – have seen some of the highest levels to date.

These high prices are not only produced by high demand from consumers, they are also a sign that producers are having a hard time keeping up with the market. Fortunately for consumers, there are three major origins trying to feed the U.S.’s hunger for avocado during this time. Growth has been so steep though that to create a stable market a complex symphony between all origins is necessary. If any one of these origins lets up, big spikes in prices follow, such as we saw the last two years.

It’s not all rosy though, and there is still some work that Peru can do to improve its positioning in the market. Compared to the market average, Peru’s prices come in at an average of US$2.00 lower. Unfortunately, the USDA’s Pricing data doesn’t give any direct insight on fruit quality, negotiating terms, or why there is such a variance, but it is relatively safe to say that there could be some room for improvement.

Written by: Colin Fain
Original published in FreshFruitPortal.com on June 12, 2018 (Link)