South Africa prepares for major avocado competition from Peru - FreshFruitPortal.com

South Africa prepares for major avocado competition from Peru

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South Africa prepares for major avocado competition from Peru

As South Africa gears up for its 2013 avocado export season, growers brace for another year of steep competition with Peru.

Although pressure from the Andean nation is standard, Adel Fresh Fruit managing director Nadir Zaptia explained to paltas_21442027www.freshfruitportal.com that the season's big headache will come from managing volumes and avoiding oversaturation.

"The production from Peru is increasing year on year, so there’s always that fear of what Peru will be supplying to Europe," Zaptia said.

"I do understand that the production has been increasing so there could be a serious peak in the market in June, which is traditional in the European market."

With high volumes, the exporter explained that Peru has a major impact on pricing, which can go against South Africa's best interest.

"South Africa overall has the better quality avocado and the markets know that. But of course, because of the economic climates around the world right now, it’s all about price.

"Peru has so much fruit that sometimes they send it along on a consignment basis and unfortunately the South African market isn’t so geared in that way.

Around June, Zaptia said oversaturation and pricing collapses inevitably accompany Peru's entrance onto the European scene.

South African Avocado Growers Association (SAAGA) CEO Derek Donkin added, however, that increased demand has created some market relief.

"They are a significant player in our season. Their volumes do affect the markets but the markets have also grown, so it’s difficult to predict year on year what the effect’s going to be," Donkin told www.freshfruitportal.com.

"If you look 7 to 10 years ago, you’ll find the volumes on the market during the South African and Peruvian season, which is the European summer, were around half of what they are now.

"Yet the market has managed to absorb that. Obviously there are times when it is more difficult and when there are peaks in volume but obviously there are people exporting from both countries who try to plan their exports so there is a smooth flow into the market."

The planning Donkin refers to comes from coordination between SAAGA and Peruvian growers, which Zaptia said can have mixed results.

"There’s a lot of communication between the growers association in Peru and the South African avocado association. They try to plan the season so they find a way to relieve or program the fruit better so that they don’t experience that peak. But in Peru, there are so many growers doing their own thing that there really is no control over the volume that’s directed," Zaptia explained.

As an alternative to butting heads with Peru in Europe, Donkin said domestic sales show increasing promise.

"We have a strongly growing domestic market in South Africa and the fruit of preference in the domestic market is the green skin cultivar. There’s a good market locally for green skins, so many growers would preferentially send their green skins to local markets as well, where as Hass avocados are more earmarked for export," Donkin said.

Donkin explained that although European consumers and supermarkets prefer the Hass variety, South Africans favor green skins because they were the avocados originally introduced there.

Zaptia has his eye on Hong Kong, where smaller varieties are hitting the market. He also has his fingers crossed on gaining market access to the United States.

"It would be a huge opportunity. Because Europe has been the main focus, you need to look at new markets for better returns. The U.S. market would be attractive in terms of prices and to relieve volumes as well. The South African citrus program into the U.S. has been quite successful and there are actually better prices there compared to Europe," he said.

Peru recently gained avocado access to the U.S., which Zaptia said, unfortunately, has not relieved volume pressure in Europe.

In terms of volume, Donkin said South Africa expects a natural decrease this year, dropping from 50,400 exported tons (MT) to 42,000 tons. 65% of exports will be of the Hass variety.

"If we compare volumes to last year, we had an export crop of 50,400 tons but if we have a look at this year's crop, it's down but that’s normal in the alternate cycle of avocados with one big year and one small year. But we’re looking to have very similar quantities of Hass in 2013 as we did in 2012," he said.

"Climatically for some reason, the green skins didn’t set as well as the Hass. Also, there are quite a number of new plantings coming into production and the majority of new planting in South Africa are Hass, especially for the export market."

Zaptia said he has received isolated reports of hail damage, which he expected to impact export volumes.

The initial South African avocado shipments are expected to arrive in Europe in week 13.

www.freshfruitportal.com

 

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