Hass avocados

The avocado market is continuing to go from strength to strength, with production set to reach 7.6 million tonnes by 2025, according to analyst Index Box.

In 2016, the avocado market increased to 5.8m t, expanding by 5.6 per cent a year from 2007 to 2016. And over the last six years, the market has enjoyed consistent growth, accelerating sharply from 2011 to 2016 after a relatively flat period with mild fluctuations from 2007 to 2010.

The market value also grew, although there were more pronounced fluctuations.

In wholesale prices, the market totaled $13.8 billion, up 23 per cent from the previous year. This figure reflects the total revenue of producers and importers, excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price.

Avocado production set to reach 7.6m t by 2025

The performance of the market is forecast to grow with an anticipated compound annual growth rate of three per cent from 2016 to 2025, which is expected to increase market volume to 7.6m t by 2025.

Avocado is a fruit native to Mexico and Central America, which has been widely planted and naturalised in other Latin American countries with tropical climates as well as in the US states of Florida and California.

Although avocado is not a product of daily demand, it continues to gain popularity around the world due to the fact that it contains lots of fibre and is rich in monounsaturated fats, vitamins and minerals.

Mexico and the US are the largest avocado consumers in the world. While Mexico is also the largest producer and exporter, the US mainly imports avocados from Mexico and partly exports its own avocados to neighbouring Canada.

Mexico has been increasing its avocado shipments to the world market. Despite this, there is a shortage of supply due to the rapid growth in demand, which is reflected in price increases and growing investment in expanding avocado production.

Driven by the growth of the Latin American population in the US, the promotion of healthy eating, and the rising use of avocados on ‘healthy fast food’ menus in large cities, the avocado market performance is set to continue its upwards consumption trend in the medium term.

Mexico remains biggest producer

Production of avocados reached 5.7m t in 2016, which was equal to $13.3bn. Except for mild fluctuations over the beginning of the analysed period, production volume grew steadily. 

Mexico was the key world avocado-producing country with an output of about 1.9m t in 2016, which accounted for 33 per cent of total global output. Mexico increased its output at the expense of expanding area under avocado cultivation with yields fairly flat.

In general, the yield in Mexico corresponded to the world average and was significantly lower than in other producer countries, such as the Dominican Republic, Brazil, Indonesia and Peru.

In Peru and the Dominican Republic, production levels increased by 15.8 per cent and 14.1 per cent annually from 2007 to 2016, attributed to growth of harvested area as well as yield improvement.

Mexico, US and Dominican Republic the biggest consumers

The countries with the highest rate of consumption were Mexico (17 per cent), the US (16 per cent), the Dominican Republic (10 per cent), Indonesia (five per cent), Colombia (five per cent), Peru (four per cent), Brazil (three per cent), China (three per cent), Kenya (three per cent) and Rwanda (three per cent).

The remaining countries together comprised nearly 31 per cent of global consumption, but the highest annual growth rates in avocado consumption from 2007 to 2016 were recorded in the Dominican Republic and Peru, up 14.9 per cent and 13.4 per cent respectively.

Consequently, the Dominican Republic (up five per cent) and Peru (up two per cent) strengthened their share of global consumption between 2007 and 2016. By contrast, Mexico’s share fell from 24 per cent in 2007 to 17 per cent in 2016.

Among the leading consuming countries, high levels of per capita consumption were recorded in the Dominican Republic (54.6 kg/year), which was over five times more than the world average of 10 kg/year. In the UK, per capita consumption rose rapidly by 13.6 per cent a year from 2007 to 2016.

A third of global production exported

Avocados are a widely traded commodity, with exports accounting for about 32 per cent of total global output in 2016. Moreover, this share increased by ten per cent from 2007, which is a testament to the growth of the product’s popularity.

High trade intensity is determined mainly by the substantial distances between the main countries of avocado production and key consuming countries.

Avocados will continue to be traded in large volumes, fueled by increasing consumption, trade liberalisation policies and intense global and regional integration. However, the trade expansion could be restrained by the lessening growth of avocado manufacturing and increasing domestic demand in some of the major exporting countries.

Mexico strengthens position as biggest exporter

In 2016, global avocado exports grew to 1.8m t, worth $4.3bn. Over the last few years this has grown steadily, with an average annual rate of 10.1 per cent between 2007 and 2016. This was propelled by a sharp acceleration in the growth rate from 2012 to 2016, driven by rising supplies from Mexico to the US.

In 2016, Mexico exported 927,000t of avocados, which accounted for 49 per cent of its total output. Of this, 75 per cent was supplied to the US, where Mexican avocados held a 74 per cent share of total consumption.

Besides Mexico, the largest global suppliers in 2016 were Peru (194,000t) and Chile (147,000t), with a combined share of 18 per cent of global exports.

The fastest growing suppliers from 2007 to 2016 were Mexico (up 13.4 per cent a year) and Peru (up 20 per cent a year), while exports from Chile remained relatively unchanged against its starting level.

The Netherlands also exported a considerable volume (148,000t), but this should be referred as re-exports since no avocados are grown in the country and imports are significant.

US remains largest import market

Global imports totaled 1.9m t in 2016, worth $4,8bn. Import growth generally mirrored that of exports, with global trade flows complementing one other. 
In 2016, the US (821,000t) remained the leading importer of avocados, accounting for nearly 43 per cent of global imports.

Lagging far behind, America was followed by the Netherlands (186,000t), France (134,000t), the UK (96,000t), Spain (87,000t), Canada (78,000t) and Japan (74,000t). Together these countries acocunted for 34 per cent of the world’s imports.

Among the major importing countries, the US (up 10 per cent a year) and the Netherlands (up 15.6 per cent a year) gained the highest annual growth rates from 2007 to 2016. However, while the US imports avocados for domestic consumption, the Netherlands re-exports more than 80 per cent of imported products, mainly to Germany and other European countries.