South Africa's avocado exports were likely to fall this season due to the crop's alternate bearing nature but hail storms caused further production setbacks. The country's crops tend to have a variability of around 15% but this year its closer to 40%.

With European avocado consumption rising and U.S. entry still pending South Africa has a lot to gain in coming years, but the situation is a bit different in the short term.

South African Avocado Growers’ Association CEO Derek Donkin has told www.freshfruitportal.com the country's crop is significantly lower this year, while Peruvian competitors have picked up their presence in the European market.

"This year South Africa's got a small crop, the smallest since 1996, due to hail storms that affected productive regions last year, which affected fruit development from September to November. A lot of fruit then had to be exempt from export and was either consumed locally or processed to make guacamole and oil," he says.

"Normally we export from 40,000 metric tons (MT) to 45,000MT to the European market. This year we’ll ship around seven million containers so that’s around 28,000MT - in this industry mostly you have a bigger year followed by a smaller year. Last year we were close to 48,000MT, so that’s around 20,000MT less than last year.

"Over the short term, obviously there’s the increase in growth in Peru and that has been troublesome at times. Last month Peru shipped a larger than ever volume, there was a supply peak and then the price fell."

He says European markets are starting to clear again with prices picking up towards the end of the South African season, while in the longer term there are several reasons why growers are optimistic.

"I think generally the avocado business sentiment is positive as people think, and rightly so, that there’s room for growth.

"A lack of supply is part of the reason why the avocado market hasn’t grown as it could in Europe, like in the U.S. which has seen growth due to the supply from Mexico and Chile over the years."

Competitors intertwined

Donkin highlights South Africa's previous position as the only significant avocado supplier to Europe during its summer.

"The landscape has changed significantly in the last 10 years. In Europe we used to be the only supplier during the European summer, but then Peru came in the early 2000’s and they’ve grown to be a major player.

"I wouldn’t say they’re dominant but they’re a larger supplier than South Africa now. But we’ve found that consumption has grown to accommodate that growth in supply.

"We’re hoping Peru can get approval to export to the U.S. without cold sterilization, as that would take the pressure of Europe, and the U.S. is a more natural market for Peru due to their proximity."

With entry approval processes underway, South Africa too aims to claim a piece of the U.S. market.

He points to significant trade and promotion relationships between competitors in both the U.S and Europe, highlighting the avocado industry's unique ability to provide quality information about volumes in markets.

"In Sweden we’re working with an agent that also deals with the Chilean industry, while in the U.K. Peru and Chile are working together. You can’t sell avocadoes from a specific origin, it doesn’t have unique properties in that way – from the customer’s point of view an avocado is an avocado, so higher consumption is beneficial for everybody.

"For example, everybody who supplies to the U.S. has to pay their due on the Federal Marketing Order in order to promote avocadoes, and that’s been a point of success in the U.S. We definitely want to ride that wave.

"If every country cooperates at a trade level there’ll be bigger portions from a larger total pie, rather than fighting for the existing pie."

The Green Skin-Hass shift in South Africa, Kenya

While the South African market prefers the Green Skin avocado variety, export markets clearly prefer Hass and growers are changing focus.

"In the last couple of years our exports have been around 55% Hass and 45% Green Skins. The South African market favors Green Skins but obviously the export market favors Hass, so most of the new plantings are for Hass avocadoes," says Donkin

He says similar trend is taking place in Kenya, which is another important supplier to the European market.

"With a highland equatorial climate, Kenya’s perfect for growing avocadoes; it’s mostly Green Skins but with commercial farmers Hass is becoming more dominant.

"Kenya has a commercial part with commercial farms and part of that market is supplied by smallholder peasant farmers with between 50 and 100 trees each. Commercial owners and traders buy from the smallholder farmers depending on the perceived value of the markets, so they fell the gaps in the markets.

"In terms of processing there is an oil processing plant in Nairobi now, and there’s definitely potential for production."

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