In Canada, where the demand for this nutritious and delicious fruit, avocados, depends on several factors external to the business and beyond our control, we must consider that factors such as weather, local harvests of other products, and summer vacations are the main influencing factors of this phenomenon in this market. These factors have significantly affected demand for the past three months, causing a 30% reduction in overall import volumes and leading the market to accumulate high stock levels by the main importers throughout the country, who source 93% of their supply primarily from Mexico, supplementing the total required volume with sporadic arrivals from Peru (5%) and Colombia (2%). As a result of this behavior, we see low prices from Mexico and a lack of appetite for importing from other sources.

For Colombia and Peru, despite having the capacity to supply products of the correct quality and in accordance with market specifications from the source, the challenge is even greater due to the lack of credibility and strong purchasing resistance from major importers. This resistance hinders their ability to strengthen the promotion and sale of products from these origins in the market and improve their minority market share. Therefore, for these two countries in particular, the challenge is even greater, but not impossible to achieve the desired results. The challenge takes time; the implementation and development of solid strategies are fundamental from the commercial and marketing departments of those Peruvian and Colombian exporters who define Canada as a strategic destination for their products. The challenge involves the ongoing investment required to carry out medium- and long-term work that breaks the strong tradition of these importers, whose consistent arrivals will allow them to gradually build trust. Their purchasing culture is overly conservative and reluctant to take risks by trying new origins, innovation, and differentiation—other important mandatory aspects that must be maintained.

The following factors are consistently important: the product's good taste, its shelf life, proper maturation, commercial flexibility to adjust quickly to market behavior, supply 52 weeks a year, and, of course, competitive prices, which are one of the most influential variables in the Canadian market. This is how this commercial segment can change its experience.

Analyzing opportunities and other horizons that allow us to advance in increasing import volumes from other origins, it is necessary to define these developments in the medium and long term, never in the short term. Serious work plans supported by a solid development strategy in this country are needed, focused on innovation and the development of new commercial schemes dedicated to other existing marketing channels such as retail distributors, food service (Horeca), frozen products, etc. These new schemes require investment for their development, execution, and progress in the medium and long term in order to break down the existing barriers of resistance in the wholesale channel. The expected result is to get closer to the retail buyer and, therefore, to the end consumer.

The market had recovered its average import volume of 100-120 FCL/week at the beginning of the year until May. Subsequently, the arrival of summer, the end of vacations, and the high supply from all active origins had a negative effect. In May, we had an import volume of CAD 52.5 million, and by June, the import value was around CAD 39.7 million, representing a drop of CAD 12.9 million (-24.5%). Following July, in August, the trend has continued, averaging -15-20% in imported volumes. Analyzing price levels and taking Mexico as the dominant origin and reference, we had very low prices on average: around USD 30.00 for S48 caliber, USD 25 for 60 caliber, USD 22-23 for 70 caliber, and USD 17-20 for 84 caliber, all under the standard 11.3 kg packaging format. For other existing origins such as Peru and Colombia, the The impact is even greater given that when Mexico is economically strong, there is no appetite for purchasing from other origins on the spot market, and only these origins are sold under programs with supermarket chains, of course taking into account a -20/25% discount on the price to be received.

In the end we see a 2% drop compared to the previous year in the first half of the year.

We expect that the market, as summer ends and with the return of the school season and work teams, will recover its demand and normal flow, allowing for good sales of imported volumes and a recovery in prices that will benefit all those involved in the value chain, from external production to marketing. We will have to wait and continue to closely monitor the market as part of our daily work.

Cordially,

Mauricio López President / CEO Cosmo Fruit Global Inc. Tel.:+ 1 647 5300327 - mlopez@cosmofruitglobal.com www.cosmofruitglobal.com