Peruvian avocado prices impacted by higher volumes from competitors

From Fresh Fruit Portal | 4 October 2022

Overview of avocados from Peru in the U.S. market, complemented by charts from Agronometrics. Original published on September 29, 2022. 

The Peruvian avocado season recently ended with average lower prices than the year before. A higher amount of fruit coming from other origins to the main destination markets caused the drop.

avocado prices by histor 8

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

The Peruvian Association of Hass Avocado Producers (Prohass) explains that Spanish and Colombian avocados were already present in destination markets, such as Europe. This caused prices to fall during the season.

Juan Carlos Paredes, president of Prohass, told Fresh Fruit Portal: “The consensus is that the price has been lower than other years. This is due to the amount of avocados in the market.

“There have been weeks when the price has been low and on average it will depend on the producer, the quality, the size and the week it came out. But there will be a 20% and 30% drop in prices”.

The logistics crisis also played a role in the decline. Supply chain issues prompted a rise in freight rates and the cancellation of routes, which caused two weeks of shipments to be put together in one week.

Paredes says that insurance companies placed many exclusions on policies for potential growth markets, such as Asia.

“The war in Russia and Ukraine could cause delays in deliveries. This caused insurance companies not to cover delays, so we did not send fruit from Peru,” he adds.

Along the same lines, Camila Borgesa of Agrokasa – a grower-marketer of avocados, table grapes, asparagus and blueberries – says that the conflict between the two countries increased both the costs and the euro vs. dollar exchange rate. It also affected the purchasing power of European consumers.

Higher volume

With the industry experiencing steady growth, Prohass forecasts the season will close with 550,000 tons. This would represent a year-on-year increase of 12%.

avocado volumes by histo 20

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

Peru is to close having shipped almost 26,000 containers, 14% more compared to 2021.

In terms of markets, Prohass has sent 125,000 tons to the U.S. higher than the 2021 figure of 85,000 tons. Shipments to neighboring Chile fell by 8%.

Regarding new destinations, Juan Carlos Paredes points out that “we still have markets to open such as Malaysia. This is in the hands of Senasa and the Malaysian authority. I hope that next season we will be able to export to that country”.

The sector currently faces diverse challenges. Prohass hopes that field managers and company administrations will realize price adjustments will translate to cost efficient production. “The replacement of trees that are not productive is already taking place and it will be seen which players will be more efficient,” he concludes.

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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