Australia: Avocados may hit AUD$100 per tray

January 20 , 2016

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 www.freshfruitportal.com 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

www.freshfruitportal.com

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  1. Jennie Franceschi says:

    While demand is extraordinary high at this point and the domestic market volumes are low, some of this reason is due to climatic issues. The WA fruit comes from the SW, a week ago we were suffering from bush fire with road closures. This week it is flooding in the growing regions in WA and raining in NZ. This limits growers from harvest …more short supply. That said there are huge plantings that have gone in and are continuing to go in so the we are more likely to see an oversupply in the future. We expect there is only a short period that customers will this short however… a short exert from my market update to my growers this morning. An interesting comment from one lady was…. Some people drink and some smoke but I like my avocado and that is my vice, I am going to eat them regardless. Put in perspective I see that people have no hesitation in paying $5 for a cup of coffee, so why would you have an issue with paying that for an avocado. I think people are choosing the avocado as it has now progressed to cult status ….its become an addiction to many. We have upgraded our packing line as our volumes will go from 1.5 million trays a season to 7 million trays a season in the next few years. This aberration is a slight hiccup BUT a great thing for the growers who are benefiting from this current pricing. The avocado industry has played a big part in saving my rural community from the demise of the timber industry. Don’t begrudge them this small win as farmers everywhere in Australia do it tough most of the time. By support Australian growers you also support the whole rural community they live in and this is extremely important for our future food security