Avocado market faces nervousness: prices at stake and the focus on May consumption.
The harvest in Mexico continued at a good pace during week 14, with 1,278 shipments sent to the United States market. Initially, it appeared that the harvested volumes were due to the resumption of activities after Easter; however, inventories increased throughout the week without a significant reduction in the harvest. Additionally, the California harvest was the largest so far this year, and inventories also apparently increased during the week.
Prices offered to Mexican producers adjusted downwards starting on Thursday; however, producers continued to offer fruit, which likely caused exporters to continue harvesting as they encountered little resistance; on the contrary, the supply of fruit remained intact.
The market began week 15 with considerable nervousness and fruit offers ranging from discounted prices of more than six dollars per box below the level seen at the close of week 14, to prices similar to those seen over the weekend. The harvest volume for Monday, April 8, will be significantly lower than in previous days.
It will only be a matter of days before we see how far prices will fall in the market and how long Mexican producers will be willing to maintain their fruit supply. The price drop and the slower harvest could be beneficial in clearing the market of fruit that may have been sitting for several days and restarting the supply of fresh fruit for the May 5th holiday, which this year falls on a Sunday.
There are reasons to be optimistic and expect strong demand for Mexican avocados by May 5th: prices haven't skyrocketed to levels that would discourage consumption, there's still a sufficient supply of very high-quality fruit, and the industry has the capacity to meet market demand. It's also worth noting that California will be harvesting at a good pace, which will be a welcome addition to the Mexican supply.
Sergio Paz Vega
