Peruvian avocado prices 40% to 50% higher than last season

From Fresh Fruit Portal | 12 March 2024

Overview of avocados from Peru in the U.S. market, complemented by charts from Agronometrics. Original published on March 11, 2024.

Peruvian avocado prices this season are 40 to 50% above what they were in the same week last year. When the season started in January in the Andean valleys, shipping volumes were small compared to what is expected to leave the country between April and May.

Juan Carlos Paredes, president of ProHass, the Peruvian Association of Producers and Exporters of Hass Avocado, told that in 2022, the country exported 554,000 tons of Hass avocado. In 2023, the total volume was 558,000.

“We practically did not grow at all, only 1%,” Paredes said. “However, this year we should ship about 468,000 tons, which would be a 16% drop compared to last year. There have been unfavorable weather conditions for the crop. And given that there is no longer any expansion of new areas, weather conditions will impact export figures.” 

FFP: How will this drop affect prices?

JCP: Several factors are leading to good prices this season. Mexico is already finishing its main season with less production; California comes in with smaller fruit and with a drop of between 20% and 30% in volumes and Chile is no longer a player that moves the needle in any part of the world. They consume what they produce and have problems with water availability.

Spain is not growing due to a water issue while Portugal has already stopped its growth. They also had problems with water availability. On the other hand, some African countries such as Senegal, Tanzania, Morocco, and South Africa are growing, but they do not compete with Peruvian avocados. They go to other destinations such as the Middle East and Europe but with different prices.

We expect that until week 25, more or less, prices will be very good, as they are now.

avocado prices by histor

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

FFP: How good?

JCP: 40% to 50% above what they were at the same week last year. We are talking about $3.10 to $3.50 per kilo.

The challenge: Maintaining quality

FFP: How important are small growers in the national avocado agro-export chain? What actions is ProHass taking to strengthen its work with them?

JCP: Small farmers are extremely important in the agro-export chain. The vast majority are located in the inter-Andean valleys, where fruit is produced at a time of high demand in the European market. Agriculture improves family incomes in areas with little economic activity.

The actions we are taking in ProHass with small producers have to do with promoting their representation by allowing access to market information and productive technical training. In addition, we have signed a collaboration agreement with the Regional Government of Ayacucho, and we are part of the Avocado Technical Board, where we support small farmer organizations in 26 districts of the region.

FFP: What are the challenges for Peruvian avocados in 2024? How important are the challenges posed by phytosanitary problems and ensuring the sustainability of this crop? 

JCP: The main challenge for 2024 is to continue working to maintain the quality of Peruvian avocados in all export markets with good maturity levels (dry matter) and reduce the levels of pests that affect quality in the field.

Another challenge has to do with maintaining a strong supply using information provided by exporters. Avocado sustainability is based on the responsible use of resources for production, especially water, agrochemicals, and fertilizers. Today, technology helps a lot with the use of sensors to measure different parameters and data processing. In addition, it is important to mechanize and automate the different processes to work with greater precision and reduce operating costs.

A few years ago, the permitted levels of cadmium in Europe were greatly reduced …

Cadmium is a heavy metal that has serious restrictions in the European Union. Not only Peru has cadmium problems, but several countries in South America, not only with avocado but with other crops such as cocoa and asparagus, for example.

ProHass is working hand in hand with the Peruvian Institute of Asparagus and Vegetables (IPEH) to find the origin of cadmium contamination; we have found cadmium in some fertilizers, for example. We are close to concluding and will share the results with the producers soon.

In Peru, 20,000 small producers are part of the export chain, and controlling everything is challenging. It’s important to say that 70% to 80% of the avocados consumed in the European summer months come from Peru. However, we are at high risk if shipments are sent with higher residual limits than what the European standards allow, which, by the way, are very restrictive.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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