U.S. avocado market expected to remain tight for coming weeks - FreshFruitPortal.com

U.S. avocado market expected to remain tight for coming weeks

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U.S. avocado market expected to remain tight for coming weeks

An avocado supply gap in the U.S. market has pushed up prices substantially, and the situation is not anticipated to return to normal until Mexican volumes ramp up in September.

A representative of produce company Freska explained the shortage was due to numerous factors.

"It's a combination of Peru ending, Mexican supplies being very low, and also California winding down," managing member Gary Clevenger told Fresh Fruit Portal.

The Golden State produced a far lower crop than last season due to severe heat in growing regions last summer, with volumes halving year-on-year to around 200 million pounds. 

California Avocado Commission president Tom Bellamore said around 85% of that total had been shipped by early July. 

"So you basically have a situation where there are not enough avocados to supply the United States, and the low inventories are creating very high prices right now," Clevenger said.

Average FOB prices are in the region of US$70-80 for a 25-pound carton, according to Clevenger.

Historic avocado prices in U.S. wholesale markets. Source: Agronometrics

He said the last Peruvian shipments of the season were now coming in, and while the Chilean season was just getting underway he did not anticipate its volumes would have much of an impact.

"They're putting fruit on the water, but I don’t see Chile helping the market with the price at all," he said.

"It’s going to be three or four weeks before there’s enough volume here - that’s when they plan on starting the new crop out of Mexico."

Until then, Clevenger expected prices to remain at similar levels to what they are now.

"They need anywhere from 800 to 1,000 trucks at the border to make the prices go down, and they’re not even close to that right now," he said.

It is possible suppliers might lower their prices to simulate some movement in the market, he added.

But he believed there would be no further supply shortages for at least several months once the market returned to normal.

"I think you're going to have some normal-priced avocados for the regular season. From the middle of September until probably next May I don't think you'll see supply breaks again," he said.

"So there’ll be plenty of avocados available and the prices for the bulk of the year should be at a good promotable level."

Photo: www.shutterstock.com


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