Conditions in the European avocado market have changed drastically from a year ago, when heavy supplies pushed down prices to rock-bottom levels. To hear more about how the market has been performing this year, FreshFruitPortal.com caught up with Graham Young, managing director of Greencell Ltd, Westfalia Fruit’s UK-based operation, who touched on the 'shortfall' of import volumes, the record Spanish harvest, and how the fruit’s 'unrivaled diversity'  has granted it a central role in the plant-based diet trend.

 FFP: In general, how would you say current import season is measuring up to your expectations?

GY: The summer and autumn seasonality for avocados would be classified as primarily being sourced from the supply ‘power-houses’ of South Africa and Peru, with additional lower-volume supply from Tanzania, Zimbabwe, Colombia, Mexico and, more recently, Guatemala.

Volumes this current season were predicted as being lower than those of 2018, due to a number of contributing factors. Firstly, both South Africa and Peru saw record, high-volume crops in 2018, which impacted the avocado trees’ alternate-bearing cycle and reduced crop expectancy for 2019 to as low as 25% in early estimations. South Africa also experienced an unseasonal heatwave in October 2018, resulting in excessive fruit-drop.

That being said, the South African avocado crop for 2019, despite being an off year, is still expected to be in the region of 15 million cartons, which would place it as the second-largest avocado crop the country has exported to date.

Peru is expecting to export around 15% less than in the 2018 avocado season, equating to 288,000 metric tons (MT) this year compared to 340,000MT in 2018. The country has a number of new orchards that have come into their first year’s production this year, which may bolster supply to some extent.

FFP: Although there has been a dip in import volumes this season, the World Avocado Organization (WAO) still estimated that EU avocado imports would exceed 750,000MT this year. Have imports been on track with that forecast?

GY: Demand in the EU is undoubtedly strong, with the European appetite for avocados growing year-on-year. But the level of imports, and those reported by WAO, whilst not appearing unrealistic, can be attributed to a number of factors – not purely to consumer demand.

For example, in 2017 during the summer period, volumes were in short supply so import figures were low. Promotional activity was therefore limited due to availability restrictions – consumption growth was subsequently ‘modest’.

On the flip-side, in 2018 there was a bumper crop from both South Africa and Peru with high import levels, so receivers worked hard with their customers to promote and move this large volume in a timely manner. The consumption growth figures from 2018 are still to be finalized; however, they are anticipated to be a good deal higher than those of 2017.

In 2019, during the same ‘like-for-like’ summer period, Europe is again experiencing supply limitations with a lower volume crop availability from the main supply countries of South Africa and Peru. Import volumes are therefore low.

Additional factors have influenced this volume or import availability. These include high demand from the U.S.. California has experienced a low crop volume - reportedly a ten-year low - and this has been compounded by lower-than-normal availability from Mexico to fill this gap in volume.

High volumes of avocados are therefore being shipped to the U.S. from Peru – whereas a large proportion of this volume would normally have been destined for Europe.

Higher volumes are anticipated to be sent to the U.S. from Mexico as the season progresses, but this will still take time to ‘fill up’ the U.S. inventories.

Another factor is logistical challenges in South Africa, such as those at the ports of Durban and Cape Town, which have rendered supply more erratic than normal.

Supply is bolstered by additional source countries, as mentioned previously; however, the volume availability from these is not sufficient to make up the shortfall from the higher-volume countries of South Africa and Peru.

It is still too early to predict if the figure estimated by WAO shall come to fruition due to the supply and import variables being experienced.

FFP: What have import volumes from your key origin countries been like over the last couple of months?

GY: At present, supply into Europe from the key origins during the summer period has been lower than during an average year – approximately 8% below normal levels and circa 17% below the large-volume summer season of 2018. But this may still change as the season progresses.

FFP: Partly due to these factors, market conditions in the EU had been relatively stable as of May. Would you describe them as still being that way?

GY: Yes. The market is stable because prices have risen considerably to compensate for the lower volume, so the market for avocados in value terms is still growing healthily.

FFP: Along with a rise in value, it was predicted that the domestic European supply of avocados would increase this year - has that come to fruition?

GY: Domestic supply did indeed increase early in 2019: in February at the peak of the season, Spain saw record crop levels of 60% above an average year – an ‘average’ year yielding a production of between 65,000MT and 75,000MT.

Spain has a planted area covering some 13,500 hectares, which is increasing steadily each year – in the Malaga/Granada area by 150 ha per year, the same in Valencia Community and between 200 to 300 ha per year in the Huelva and Cadiz area.

Domestic supply is further set to increase with plantings haven taken place (and expanding) in Portugal and Italy. Westfalia has planted orchards in Portugal which are expected to come into play in the coming years.

FFP: Are there any new developments or trends this year worth noting?

GY: A surge in popularity of plant-based diets is driving further growth with the avocado’s unrivaled diversity becoming a key ingredient. Available to consume in so many ways – in smoothies, sweet or savory, cooked or raw dishes, for breakfast, lunch, dinner or just as a snack – the avocado is riding the wave of this popular trend.

Added-value avocado products are also making a key appearance on the market, further inspiring consumers to take advantage of the avocado’s tremendous diversity.

Premium varieties such as Westfalia’s GEM avocado, with its rich and nutty flesh, will also be making extended appearances through the year as young trees come into fruiting maturity stages.