Mexico: USDA forecasts similar level of avocado exports for 2018-19

December 04 , 2018

The U.S. Department of Agriculture (USDA) has forecast Mexican avocado exports of around one million metric tons for the 2018-19 season, a figure that the industry achieved during the previous campaign.

In a report, the USDA’s Agricultural Marketing Service (AMS) said that the depreciation of the peso against the dollar has helped international sales in general in recent years.

Although the export estimate would be similar to last season’s level, it would still be a marked increase from the 874,000MT exported during the 2016-17 season.

The vast majority of the fruit was sent to the U.S. market, which receives about three-quarters of Mexico’s avocado exports. Japan and Cana each receive 6-8%.

“In general, exports have been increasing due to good international demand and year-round market access to all 50 U.S. states. In addition, exports to Canada, Japan and Europe have increased,” it said.

“Avocado exports for MY 2017/18 generated $2.8 billion dollars, whereas in MY 2016/17 exports generated 2.5 billion dollars.”

The report also highlighted a sharp price drop in the U.S. market earlier this season, which led to harvesting to be put on hold in Michoacan.

“Avocado prices for MY 2018/19 for size 48s in the United States, F.O.B L.A. began in July at about US$42.00 a carton, and in September reached about US$72.00. By mid- October prices dropped to around US$26.00,” it said.

Michoacan grower strikes

The rapid price decline led to a major price dispute that ultimately led to the paralyzation of harvesting activities over a couple of weeks in early November.

Growers were demanding that a minimum price be set, as they believed they were being paid very little for product that was being
shipped to the U.S. market.

“An agreement was reached to end the strike on Nov. 14, 2018 when the parties along with the Mexican government agreed to have produce weekly information including: product exported, product sent to domestic market, volumes sold, and destination,” the report said.

“The intention is to have transparent commercial value information of the avocado trade. Parties agreed that market prices will be adjusted according to the supply/demand principle.

“Producers believe that the strike resulted in an estimated deficit of 38,000 metric tons in the U.S. market, but that the product was be redistributed in the following weeks.”

 

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