The effect of tariffs on avocado harvests in Mexico: a week 10 of uncertainty
Mexico
In week 10, Mexico harvested 19,224 tons of avocados, of which 16,137 tons were exported, representing an 83% utilization rate. It was a challenging week for the Mexican avocado market. The imposition of tariffs for a couple of days created significant confusion in the market and throughout the export chain. The magnitude of the 25% additional cost forced several exporters to halt harvesting, leading to a fruit shortage and declining inventory levels.
However, once the tariff was removed, the pause in harvesting led to a rise in farmgate prices. This week, more harvests are being taken out at higher prices, and it's important to monitor fruit movement and daily inventory levels.
The supply of hectares available for harvesting decreased by 10% compared to last week, but there is still enough volume to cover the inventory decline. The size distribution continues to be dominated by smaller sizes, and there is a significant price difference between sizes 48 and 70, almost $40.00 per box.
It's important to note that during the weeks of March, Mexico's export volume will remain consistent at around 20,000 tons per week on average. However, the issue of tariffs could resurface in early April, when President Trump is expected to make some announcements. Additionally, California's harvest is likely to begin in earnest and will be another factor to consider.
We can conclude that the avocado market remains volatile and it is important to be attentive to changes in supply and demand, as well as the potential impacts of tariffs and the California harvest.
Have a great week everyone.
Antonio Villaseñor Zurita
Mexico
