Logistics redefines the Argentine avocado market

Over the past few weeks, the Argentine avocado market has been characterized by a scenario that reflects the close relationship between supply, logistics, and prices. Rather than a sudden shift in demand, recent trends demonstrate how external factors can temporarily alter the trade balance in the region.

The period began with a complex context characterized by the simultaneous presence of domestic, Peruvian, and Brazilian fruit. This convergence generated an abundant supply that exceeded the market's absorption capacity, causing selling prices to fall even below costs in many cases.

This type of situation is not unusual when multiple sources coincide in supplying the market at the same time, because without an equivalent growth in consumption, the excess availability ends up being quickly reflected in prices.

Logistical disruption as a balancing factor

However, the situation changed unexpectedly due to a logistical disruption. The closure of the Los Libertadores International Pass drastically limited the entry of Peruvian fruit that was in transit to Argentina. Although some volumes were able to enter through alternative crossings in the south, these flows were considerably lower than usual.

This operational interruption allowed the domestic market to consume the accumulated stock for approximately twenty days, gradually reducing the pressure generated by the oversupply of the previous weeks.

In this sense, rather than an increase in final consumption, it was the temporary decrease in available volume that allowed for a greater balance between supply and the volume absorbed by the market.

Argentine market configuration

Currently, Argentina's supply relies on four main sources: domestic production, Peru, Brazil, and Chile, which has recently begun to re-enter the supply chain. While each source plays a key role in ensuring availability, the overlap of suppliers necessitates continuous monitoring of incoming volumes against actual market capacity.

Border reopening and the risk of oversupply

It is precisely at this intersection that the main uncertainty for the coming weeks lies. With the eventual reopening of the mountain range, both the Peruvian fruit currently held up in transit and the new shipments from Chile could enter the market simultaneously.

If this accumulated volume proves high, the Argentine market could quickly return to the oversupply observed at the beginning of the season, generating new downward pressure on selling prices.

Therefore, short-term evolution will depend less on consumer behavior and much more on the pace at which the logistics flow normalizes and the actual volume entering the country.

Recent experience has once again demonstrated that, in the avocado business, logistics is as crucial a factor as production itself. In markets where different origins coexist, a disruption in transportation or a change in transit times can redefine the commercial balance in a matter of days.

Miguel Bauza
Manager of Don Jaime Company - Argentina
mbauza@donjaime.com.ar

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