Australia’s avocado industry grapples with high production and declining prices, as detailed in Rabobank’s latest Global Avocado Update 2024. The global demand for avocados offers some relief for growers through increased export opportunities.
Production forecasts for the 2023/24 financial year reveal a 20% year-on-year rise, pushing Australian avocado output to a record 139,000 metric tonnes. This growth stems from over 1,500 hectares of avocado plantings maturing, with another 4,000 hectares expected to mature in the next five years, according to RaboResearch analyst Pia Piggott.
Domestic demand for avocados has risen, showing a compound annual growth rate of 10% over the past decade. Yet, the local market remains oversupplied, keeping prices low. Piggott emphasizes the critical role of the export market, which comprises 13% of Australia’s total avocado production.
Total exports surged by 55% year-on-year in 2023, with major growth in markets like Hong Kong, Singapore, and Malaysia, and a sharp rise in exports to Japan and other regions.
Despite the export growth, prices have dropped by 9% to AUD 4.59/kg in 2023. Access to new markets such as Thailand and India is expected to diversify exports, though it may not prevent further price declines.
Retail avocado prices in Australia have shown volatility, reflecting seasonal supply fluctuations. Prices might see a slight rise during Western Australia’s ‘off year’ of production but are predicted to drop as supplies increase again.
Globally, avocado consumption and import demand remain robust. The United States, the largest avocado importer, continues to show growing demand, with imports reaching a record 2.7 billion pounds in 2023. Europe and Asia also see significant growth in avocado imports, with China experiencing rapid increases.
To meet global demand, avocado production and exports must sustain their rapid growth. Global exports are expected to surpass 3 million metric tons by 2025, with Mexico as the leading exporter, followed by Peru and Colombia.
Piggott highlights that while the future looks promising for avocado producers, maintaining profitability will require innovation to address competitive markets and supply-side challenges.
Consolidation is expected in fragmented markets, particularly in South America, as producers seek greater efficiencies. The dominance of Hass avocados will likely continue, though new varieties with higher yields and efficiencies may gain traction.
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