The start of 2025 for Hass avocados in the Chinese market has been marked by stable prices, but with limited buyer interest. This behavior reflects a recurring phenomenon: attention is primarily focused on Chilean cherries in the weeks leading up to the Chinese New Year, leaving other fruits in the background.

During the first two weeks of the year, good quality Peruvian avocados in 4 kg boxes (sizes 20 to 24) were sold for between RMB 80.00 and RMB 100.00. These prices, representing an FOB Callao/Chancay of approximately USD 7.70 to USD 10.10, are considered reasonable for the season. During this period, smooth-skinned avocados from well-known brands reached the higher end of the range (RMB 100.00), and even higher in some cases.

From week 3 to week 5, the lower end of the price range rose slightly, settling between RMB 90.00 and RMB 100.00 per 4 kg box. Despite this slight price improvement, trading activity remained sluggish. Week 5, in particular, was marked by almost complete inactivity due to the start of the Chinese holiday. This is not unusual, as Chilean cherries typically command market attention during this period. However, this year the lack of interest in avocados was even more pronounced, exacerbated by the low cherry prices, which have triggered panic among importers. Many of them made significant advance payments to Chilean exporters, advances that in some cases have not been recouped by sales revenue, further worsening their financial situation.

Economic context and outlook for 2025

The year 2024 was difficult for China, marked by the collapse of the real estate sector and mass layoffs in high-value jobs, resulting in a clear decline in purchasing power. However, towards the end of 2024 and into the first month of 2025, signs of economic recovery and resilience began to emerge. Advances in fields such as electric vehicles, artificial intelligence and automation, as well as clean energy, stand out as pillars of this resurgence. Combined with the massive government stimulus package, we could be cautiously optimistic for 2025, a context that could favor a rebound in the consumption of fruits like Hass avocados in the Chinese market.

Competition with Chilean avocados

Chilean avocados are also present in the Chinese market and are sold at higher prices, reaching up to RMB 125.00 per 4 kg box. This price difference is due to the greater consistency in the quality of the Chilean product, especially the absence of pulp problems, which motivates Chinese buyers to pay a premium price.

Container traffic from Peru to China

In terms of exports, the initial weeks of the year reflected a low volume of shipments from Peru. During weeks 1 and 2, 4 and 2 containers were shipped, respectively. However, week 3 saw a significant increase, with 43 containers shipped on 4 different vessels. Of these, 9 were destined for Hong Kong and 34 for Shanghai, representing the highest peak in shipments for January. Although we don't believe this volume is enough to cause a market collapse, it's important to monitor and be cautious about how the number of containers leaving Peru evolves week by week. Likewise, when these containers arrive between weeks 9 and 10, we will have a reliable indicator that will give us an idea of how the avocado market will perform in 2025.

In week 4, shipments decreased to 22 containers, almost half the previous figure. This decline is explained by the one-week delay of the vessel WAN HAI 625, which was scheduled to depart on Sunday, January 26, but postponed its departure to February 2. This delay allowed more exporters to join the shipment, so a new peak in shipment volumes is expected in week 5.

Overview of exporters and costs

In January, virtually all Peruvian exporters were companies dedicated to the collection, processing, and export of Hass avocados to China. The fruit comes primarily from the Peruvian highlands, from small producers in regions such as Ayacucho, Andahuaylas, Apurímac, and Áncash, among others. The predominant purchasing model is at a fixed price past the conveyor belt or in the field, with average prices for sizes 12 to 24 ranging between 6.60 and 7.20 soles per exportable kilogram. For these purchase prices to be even minimally profitable, sales in China would need to reach approximately RMB 95.00 to RMB 100.00 per 4-kg box. This calculation clearly shows that current purchase prices are not aligned with the international market situation, limiting potential profits per container, since currently only very high-quality fruit in boxes with a recognized brand achieves this price range.

Conclusion and perspectives

January has been generally calm and stable for Hass avocados in China. However, the true market dynamics will emerge after the Chinese New Year. Many companies are waiting to see the prices that will be established starting February 10th. It will be crucial to analyze how the complex situation with Chilean cherries will affect our "green gold" in the coming weeks, in a context where importers are facing significant financial challenges.

The combination of a more encouraging economic outlook in China and the resilience of Peru's agricultural export sector could open up significant opportunities in the short and medium term. However, adopting flexible strategies and closely monitoring the market will be key to capitalizing on emerging trends.

André Vargas
Global Procurement Manager South American Express
Co- Commercial Director at Fruwer Produce LLC
avargas@fruwer.com
China