Chile took advantage of the supply gap left in the U.S. avocado market last year as the result of a conflict in Mexico, according to an industry head. 

A row over prices between Mexican avocado growers and exporters in October 2016 led to a major reduction in shipments, and in turn a significantly undersupplied U.S. market with soaring prices.

Speaking with Fresh Fruit Portal, Chilean Hass Avocado Committee general manager Juan Enrique Lazo said the situation had been an opportunity for the South American country.

"We have seen that volumes grew in our traditional markets like the U.S., Europe and Latin America, but in the U.S. this season there was an unusual situation due to the strikes there were in Mexico," he said, adding supply had been affected for at least six weeks.

"As a result, our exports tripled, increasing from an average of 10,000 metric tons (MT) to around 29,000MT to date," he said.

In addition, he said the issues in Mexico had generated more interest from U.S. importers in Chilean avocado programs.

"The truth is that Chile was losing some position and importance in that market, but the importers realized that they can't depend on just one origin and we have seen a lot of interest in creating new programs with us," he said.

Exports to the European market have also been higher than anticipated at the start of the season.

"Last season (2015-16) we sent around 79,000MT to Europe and we had hoped to grow slightly to 81,000MT," he said.

"However, we found that there was very high demand for the product and to date we have shipped slightly more than 88,000MT, which helps us reinforce the idea that there is still a lot to do in the traditional markets."

Lazo also highlighted Costa Rica had entered into Chile's top five Latin American markets, with 3,000MT.

In addition, there has been strong growth into neighboring Argentina, and so far this season the market has received a similar volume to China - 12,000MT.

Only around 5,500MT of fruit was shipped to China this year.

Lazo said while the Chinese market was somewhat under pressure in the opening stages of the season due to high volumes of Mexican and Peruvian fruit, the situation had gradually improved from around November.

Tipping the export balance

Along with the significantly higher exports to the U.S. this year, Lazo noted another aspect that stood out was the export balance compared to previous campaigns.

The 2016-17 deal, which has very nearly wrapped up, saw total production grow 17% year-on-year to around 210,000MT, largely due to increased water availability in growing areas as a result of rainfall last year.

Lazo expects total exports of around 145,000MT this campaign - equivalent to two-thirds of the crop - compared to typical years where only half the crop is exported.

He attributed this change to both the high prices in international markets and a stagnant economy in Chile which had somewhat limited consumers' spending power.

"We estimate that for the 2016-17 season the local market consumed around 80,000MT, of which around 60,000-65,000 was of national production," he said.

"This is a change is our structure, as before this season 50% of production stayed at home, but the current situation has changed and around 65% is being exported.

"We have seen a decrease in local consumption, and the international markets continue to demand more and more avocados, so naturally we have had to tip the balance."

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