During the second day of the 7th Jalisco Avocado Congress, an event organized by Jalisco’s Avocado Producers and Exporters Association (APEAJAL), FreshFruitPortal.com spoke via video conference with Ramon Paz, general director of Paz Mendoza y Asociados, an agribusiness consulting firm, about the outlook for international avocado markets.

What is Jalisco's role in avocado exports?

Jalisco has a particular importance for two reasons, first, because there’s orchards with much more technology, as they are more recent plantations than those of Michoacan. Michoacan, of course, has a greater volume, but only 30% are irrigated, thanks to the region’s rains.

Another point is the seasonality that Jalisco has in the harvest, since it comes a little earlier than Michoacan’s. Between May and July, Michoacan's production decreases, and Jalisco is ready then with new fruits for the following season.

Jalisco has a month and a half to two months of advantage over Michoacan, so this makes Jalisco's role very important for Mexico to have a sufficient volume all year round in the North American market.

Ramón Paz.

Is the industry working on opening new markets?

We all know that we should be looking for other markets and diversify, but the reality is that no other market has the prices or the low risk that the U.S. has for us, because we can be at our destination within 24 hours. So the risk of deterioration of the fruit is low, the risk of price change in transit is also low and the cash flow is very fast. 

Furthermore, the volume consumed by the U.S. is basically half of what is consumed in the international avocado trade, which makes it an extremely attractive market. No other market can consume as much, nor is it growing as much as the U.S., and it continues to develop very significantly.

I think the entire industry worldwide should work hard to develop Asia, where 5% of the world's avocados are consumed.

Europe must continue to be supplied, but it is not so attractive since we have a complementary offer with Peru and South Africa.

How much growth do you estimate for the U.S. market?

Between 2012 and 2020, the U.S. grew at double digits, at approximately 13% per year. Currently its growth is 8% per year. And it can continue to grow, because its per capita consumption still does not even reach 8.8 pounds, when in Chile and Mexico we are at almost 20 pounds.

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What would be the ceiling with respect to the growth of the U.S. market?

I believe that it easily has another 10 years of growth ahead, especially if the promotion efforts are maintained, together with the productive and promotional work, to contribute to keep the U.S. market on the rise.

Until 2021-2022, demand, especially in the U.S. and also in Europe, grew faster than the development of supply and production. But in those years from 2010-2015 onwards, many fields were planted in different parts of Latin America, such as Peru, which grew significantly, as well as Colombia and Africa. 

Now we are going to see that those fields are starting to produce and production is growing faster than demand, and we are going to have some years with imbalances.

Is oversupply affecting prices?

There is going to be more product than increased demand and that is going to cause prices to moderate a little more. So, the oversupply could drive prices down.

What we have seen is that the 2022-23 season had one of  the lowest prices in history since we started exporting in 1997. 

And we foresee that it could continue to happen in the next four or five years, because of the growing production.

How can avocado oversupply be managed?

Promotion is the way out of this situation, so that the avocado market continues to grow, so we have to concentrate much more on promotion.

An example is that 20 years ago more avocados were consumed in Europe than in the U.S., while today we have a higher consumption in the U.S. and at better prices. This is fundamentally an effect of promotion.

We have to emphasize that we sell a product that is very good, very healthy, very nutritious, very versatile, and offer consumers the experience so that they learn to consume it and enjoy it.