Mexico is preparing to become the almost sole supplier to the US market.

Mexico exported 1,020 shipments in week 35. Demand for Mexican fruit has been gradually increasing in recent days. Total inventories have remained above 30,000 tons on average, which may be a high enough figure to suggest an improvement in the market. California and Peru, after experiencing a reduction in their market share 10 days ago, have held steady. California had already announced a slight increase in its harvests for the second half of August.

During the first two months of this season, Mexico has shipped approximately 9% more avocados than the previous season, which had already set a record. However, prices have also been 10% lower than last season's levels. Undoubtedly, the North American market is consuming significantly more avocados than in previous years, but this has been driven by low prices and some disruption in the fruit supply.

Organizing the supply, the pending task of Mexican industry

The Mexican industry must organize fruit shipments if prices are to recover. Both exporters and importers must analyze the impact of these prices on returns to producers, who must continue to cultivate their orchards properly to maintain productivity and quality. The result of this analysis should be reflected in a more organized fruit supply. It must be questioned whether shipping fruit at current or lower prices will actually result in increased sales. Most likely not. Retailers will not necessarily lower consumer prices, and if they do, it will be slowly, since they have been the biggest beneficiaries of the abundant fruit supply in recent weeks.

The Mexican industry has just come through two months in which, thanks to the artificial price lag in May, it was relegated to being a major market contributor, even though it never ceased to be the primary supplier. In the coming weeks, it will become the almost sole supplier. During this period, the Mexican industry must demonstrate and leverage all its strengths and competitive advantages to regain its role as a reliable year-round supplier, regardless of the continued influx of fruit from other origins in the coming years.

The role of the producer in a reorganizing market

Mexican producers must also understand their role in strengthening exporters truly committed to Mexico as the origin of their avocados. The avocado market has become globalized, which is a valid and open market, but recent trends point toward strengthening companies in each country. Mexico has efficient and highly professional national exporters; each producer must decide whether to continue supporting companies that withdraw during the most competitive months or those that remain and are willing to compete year-round, openly, without seeking protectionist measures that benefit a particular origin, as is already happening.

Sergio Paz Vega
General Manager Coliman Avocados
sergio.paz@coliman.com
Mexico