However, the world’s growing appetite for the popular nutrient-packed green fruit is offering growers some relief, with increasing export demand for Australia’s produce, the report says.
In its recently-released Global Avocado Update 2024, Rabobank says production forecasts for the financial year 2023/24 Australian avocado crop are up by 20 per cent year-on-year (YOY) to 139,000 metric tonnes. This sees Australian avocado production at a record-high level.
This growth is driven by more than 1,500 hectares of avocado planting expected to reach maturity this year, bringing additional supply to the market, according to report co-author, RaboResearch analyst Pia Piggott.
“And expansion in Australian avocado production is set to continue with more than 4,000 hectares of orchards maturing in the next five years,” she said.
But while demand for avocados among Australian consumers continues to grow – with the local market increasing at a compound annual growth rate (CAGR) of 10 per cent over the past decade – Ms Piggott says the local market remains oversupplied, with prices languishing at low levels. And it is rising export demand which is offering the biggest market growth opportunity for the Australian industry.
Export opportunities
Ms Piggott says the export market, which accounts for 13 per cent of Australia’s total avocado production, has brought some relief to the oversupplied local market.
The Rabobank report notes total Australian avocado exports increased by 55 per cent YOY in 2023.
Hong Kong, Singapore and Malaysia remain key markets, but there has also been significant growth in volumes to Japan (up 193 per cent YOY) and ‘the rest of the world’ (up 621 per cent YOY).
However, export prices, on average, have declined by nine per cent in 2023 to AUD 4.59/kg.
“New market access to Thailand and India will also help diversify exports,” Ms Piggott said. “However, this will unlikely be enough to keep prices from a downward path.”
Prices
Ms Piggott said Australian retail prices for avocados currently “sit at around the same level they were at this time last year”.
“However in the past year, there has been a lot of volatility in avocado prices, reflecting periods of fluctuating seasonal supply.”
Ms Piggott said the bank expected avocado prices would remain volatile “and we may see some increase in prices in the summer months as Western Australian avocado production is in an ‘off year’, with crops bearing less fruit”.
“But after this, supplies will again start to increase and prices are expected to decline,” she said.
Global outlook
Overall global avocado consumption and import demand are expected to expand further in coming years, creating new opportunities for avocado exporters around the world, the report says.
Rabobank says the United States continues to be the world’s largest importer of avocados and US import demand is expected to continue growing.
In the 2022/23 season, US consumption of avocados exceeded three billion pounds (1.35 million metric tons) for the second time, while imports for the 2023 calendar year hit an all-time high of 2.7 billion pounds (1.26 million metric tons), the report said.
“Over the past decade, we’ve seen the US become increasingly dependent on avocado imports – primarily from Mexico – and we anticipate US avocado consumption and import demand will continue to increase in the years ahead,” Ms Piggott said.
Demand for avocados is also growing strongly in several other regions around the world, increasing import requirements, she said.
The report says avocado imports have also grown in Europe over recent years with this growth trend expected to continue.
“This is also the case in Asia where most countries have achieved double-digit compound annual growth rates (CAGR) for avocado imports over the last decade. Chinese import demand, in particular, has grown rapidly increasing by a CAGR of 31 per cent since 2014. But despite these high growth rates, per capita avocado consumption remains relatively low, indicating significant potential for further growth,” Ms Piggott said.
To meet the growing world demand for avocados, Ms Piggott said, global avocado production and export volumes would also need to continue their recent rapid growth path.
“Global avocado exports surpassed one million metric tons in 2013, two million metric tons in 2018, and we expect avocado exports to exceed the 3 million metric ton milestone as early as 2025,” she said.
“When we look at where these exports are coming from, Mexico remains the world’s largest avocado exporter and is likely to surpass 1.5 million metric tons in avocado exports in coming years. Peru is projected to approach 650,000 metric tons by 2026, and we anticipate Colombia will soon surpass Spain and Kenya, securing its position as the third-largest avocado-exporting country.
“We are also seeing an increasing number of South American countries becoming significant avocado exporters – like Brazil and Ecuador – while Africa is far from reaching its potential when it comes to avocado production.”
While the prospects look positive for avocado producers around the globe, Ms Piggott said, to remain profitable, industry players would need to innovate in response to increasingly-competitive markets and supply-side challenges.
“The industry’s landscape remains fragmented in some countries and increasing competition and margin pressures will drive consolidation, particularly in certain areas of South America,” she said. “We expect Hass avocados will continue to dominate in the near-term, but we also anticipate hass-like varieties that have higher yield potential and improved efficiencies, will gradually gain adoption in the coming years.”
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Media contacts:
Denise Shaw Will Banks
Media Relations Media Relations
Rabobank Australia & New Zealand Rabobank Australia
Phone: 02 8115 2744 or 0439 603 525 Phone: 0418 216 103
Email: denise.shaw@rabobank.com Email: will.banks@rabobank.com
About us:
Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 125 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 90 branches throughout Australia and New Zealand.
