U.S.: How will the Mexican strike affect other avocado suppliers?

October 17 , 2016

Indications from the Mexican avocado industry show deals struck over the weekend mean volumes ought to start stabilizing this week, but regardless of any short-term speculations about supply and prices, the ordeal has been a timely lesson in diversification as a safeguard.

Speaking with www.freshfruitportal.com during the Produce Marketing Association’s (PMA) Fresh Summit yesterday, Subsole commercial manager for avocados Oscar Villegas said the issue had prompted more conversations with U.S. buyers and retail chains.

“At Subsole we are very focused on programs more than spot markets,” he said.

“This instance that came about has been very good because Chileans haven’t been in the United States market very much in recent years; just those supermarkets that are willing to continue with Chile even though it can cost more than Mexico.”

He said while some Chilean exporters do programs with U.S. retail chains, and Subsole itself does programs with Costco, the recent issues in Mexico may have led many supermarkets to realize “being in the hands of one origin isn’t good”.

Oscar Villegas

Oscar Villegas at the Fruits from Chile stand

“Whether it be what’s happened now in Mexico, or it could be a port strike in Chile or a port strike in Peru, or a weather event, finally they are left without supply,” Villegas said.

“We have spoken with a lot of people and it’s been an opportunity to re-establish business that was lost before, where Chileans had stopped supplying because the decision of many supermarkets was simply about the lower price.

“This will be very good for Chile, it’ll be very good for Peru, and it’ll be very good for other suppliers to the market in the future because the attitude is changing amongst a lot of buyers and chains because of what happened. We are taking this opportunity responsibly.”

He said last year the Chilean industry shipped 10 million kilograms (22 million pounds) to the United States.

“This year it’ll be three times that,” Villegas said.

“And there is less pressure in Europe so all the markets will be healthier in terms of volume with fewer problems in price.

“From my perspective this opens the doors to have programs. It allows us to diversify the markets which is healthier.”

While Villegas and a large percentage of Chile’s fruit industry leaders were in Orlando for the trade fair over the weekend, back home there were high levels of rainfall around Santiago and Chile’s Central Valley.

“The only effect that it has over the avocado harvest is that harvest will stop for a couple of days during the rain, and then a few days after the rain we’ll be able to go back in to pick. But in terms of negative effects, I can’t see any,” he said.

“Given the scenario we’ve had in Chile, I think rain is always welcome.”

www.freshfruitportal.com

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