Australia: Avocados may hit AUD$100 per tray

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Australia: Avocados may hit AUD$100 per tray

Hass avocado prices have reached "unheard of" levels in Australia this year, with supply looking short at least until North Queensland production comes online in mid-March.

Antony Allen of grower-owned business The Avolution told the high prices were mostly the result of strong demand, with impacts as well from supermarket promotions around Christmas time that moved a lot of product at below-market prices.

Currently, most of the supply is coming from Western Australia and New Zealand, which have seen crop reductions of around 30% due to weather-related issues.

"In the Melbourne Markets, a 10kg box with very small fruit is selling for AUD$150 (US$103) a box and trays of avocados are selling for AUD$80 (US$55) a tray which is unheard of in avocados in Australia," Allen said.

"It's likely to go up; they're estimating that AUD$100 (US$69) a tray is possible, probably more than likely by the end of next week.

He said a lot of the demand was coming from the foodservice sector, particularly through growth in sushi restaurants and Mexican food chains.

"We have an enormous sushi culture or offer – there are sushi stores on every corner, it's almost like what Chinese restaurants used to be in the 60s and 70s in Australia. And sushi, from an Australian perspective, has to at least have an avocado offering," Allen said.

"There’s huge growth in Mexican quick-serve chains in Australia which has been massive.

"There are two foodservice offers that have to have avocados. That's part of the mix – some can be discretionary but there are some people who must have avocados in their product range."

He said normally around this time of the year the industry used to see the price rise and retail demand drop right off.

"But we haven't seen that at the price we're at yet," he said.

So does this situation make a case for Australia opening up to more imports, or planting more trees?

"The prices that we're seeing will make the Australian market extremely attractive to overseas growers. That's how markets work," Allen said.

"Australian growers do need to recognize that planting more trees is an essential part of driving demand and growing the industry; you must then meet the expectations of the customer, or else somebody else will."

Exports on the rise

Allen said exports have been "fantastic" into Asia, with Singapore as the main market.

"Up until just before Christmas there was an enormous amount of fruit from our perspective going into that market and very good prices," he said.

"I think the reason that has happened is a lot of countries - whether it's Chile, Peru or Mexico, even South Africa and Israel that have been moving fruit into that market - have been creating demand at price points which are good.

"Australian fruit is never going to be at the volumes of those countries into those markets, but we probably have a fresher, premium price point that we go in at," he said, adding export sales growth would most likely continue in the region.

El Niño supply effects yet to be seen

Allen emphasized Southeast Queensland and New South Wales saw some particularly large storms from early October towards the end of 2015; the effects on growers have been mostly localized, but El Niño-related issues could have an impact on the 2016 season.

"On top of that, then we’re expecting storm and cyclone season to be coming up; we get worse ones towards February - they’ve been lacking so far this year but we’re expecting that to be another risk factor," he said.

"In terms of drought and rain, from a coastal strip point of view, El Niño hasn't impacted as it normally would, but it certainly has had an impact from a storm perspective."

He said disease pressure was higher, but most of the damages came from rub as a result of the inclement weather, leading to a downgrading of the crop in some areas.

"One of our growers has a number of orchards, and one of them is completely stripped bear of leaves.

"The hail was so bad it was like ripping a band-aid off your skin and ripping every hair out of your arm; it was just spindly sticks of branches.

"It's localized. You don't have whole regions having that, but it’s a swathe of growers that were impacted.

"Out of the Bundaberg region and even North Queensland, we would’ve expected to be up around 30%, but we’re probably back around what we had last year."

Photo: The Avolution

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