This is the warning from Chilean Sebastián de la Cuadra, CEO of Avobook, who details what is currently happening in the international avocado market, or palta as it is called in his country.

Chilean engineer Sebastián de la Cuadra Infante has over 30 years of experience in the food industry, moving from production and operations management in exporting companies to general management in companies dedicated to the international market for avocados, or palta, as the green fruit is called in his country.

This experience has led him to manage teams in Chile, Colombia, Ecuador, and Peru, giving him a comprehensive understanding of the production and commercial operations in all these markets. Because he needed to systematize information from each country of origin and destination, he began compiling reports to guide decision-making, including production and shipping volumes, price trends, and a wealth of data that sheds light on this complex international business.

What began as a personal guide evolved into a unique report, Avobook, featuring weekly analyses of the global avocado market. It is now a multiplatform tool designed to guide decision-makers and their teams.

“Today, the market is dominated by low-quality avocados, which has a direct impact on the price,” warns De La Cuadra, CEO of Avobook, whose reports are circulating among professionals and technicians worldwide.

- What contribution do you feel Avobook is making to the avocado market?

“As a first step, we must remember that we have two extremely important markets: the United States and Europe, including the United Kingdom. Secondary markets include Chile, China, and Canada. In this industry, volume is paramount because avocados are a commodity: the more production and shipments, the lower the price. The more concentrated a certain size, the lower the price, and if there is a shortage, the price rises. Therefore, for those who must make business decisions, it is crucial to know the volumes being shipped from each country. That is what we constantly monitor at Avobook.”

- Is it possible to make some projections using the reports?

“Our report uses certain projections. You can see how a market will theoretically look in one or two months, both in the United States and in Europe. Therefore, the information could help a producer, exporter, or sales manager project volumes and which week they can harvest and ship fruit, to better diversify and avoid concentrating their shipments in a market that won't have attractive prices.”

- Can you give me an example?

“One of the largest exporters, besides Mexico, is Peru, which is just beginning its harvest season. Business decision-makers in that country need to be monitoring the origin and characteristics of their harvest, both in terms of volume and size, and, based on that, diversify their shipments to their various markets: Europe, the United States, Canada, Korea, Japan, China, and even Chile. Therefore, the data we report weekly provides valuable information for decision-making. That is the significant contribution we can offer exporters, in scenarios that change every week.”

Avocado exports to Europe increase

One of the analyses in the Avobook Report for Week 17 is that the increased volume of avocados entering the old continent is impacting prices downwards.

“The European market receives products from all over the world because there are no phytosanitary requirements for entry. Therefore, any producing country can send its product, provided it meets certain documentary requirements, of course. When many countries compete in the European market, in terms of volume and certain sizes, the market tends to slump and prices tend to fall, and that's what's happening today,” warns Sebastián de la Cuadra.

- How can this drop in prices be explained?

“The European market is experiencing a significant drop in prices because a much higher volume is arriving than in previous weeks, and countries with very large production, such as Peru and South Africa, are beginning to deliver their product. Colombia, which shares the market with Israel, continues to have a presence, though to a lesser extent. There is very little left from Spain and some from Brazil. But Peru may account for between 50% and 70% of all the European volume being handled.”

- Is it a matter of volume or are there also effects generated by the caliber?

“This year Peru is producing smaller calibers, which means that medium and smaller calibers in Europe are going to drop significantly in price. On the other hand, large calibers, which Peru has always contributed a lot to, are scarce, and we are seeing that prices are holding steady or may even rise.”

- And what's happening in the US market?

“The US market is largely controlled by Mexico. Some weeks it reaches almost 95%. Today it's at 70% or 75%, because the California harvest has begun, which accounts for between 15% and 20%. On a smaller scale, Peruvian and Colombian fruit are also arriving. So, we see that prices remain stable, considerably better than in Europe.”

- What is the reason for that stability?

“That happens because Mexican fruit is highly regarded and sought after in the American market. And that's boosted by the proximity of an important date, May 5th, which commemorates the Battle of Puebla. Around that date, there are many celebrations by Mexicans in the United States. And one of the most typical things at their gatherings, besides beer, is guacamole with chips. Therefore, that's where the demand for avocados constantly rises.”

Few large-sized avocados on the market

Sebastián de la Cuadra explains that one of the situations that is occurring is the small size of the fruit, even from the origin that usually sends large sizes, so - as he elaborates - "the large size has risen quite a bit in price this week."

- And what is recommended for those who produce large calibers in Peru?

“Europe has always been Peru’s natural market. In the United States, its fruit doesn’t yet have such a strong presence because people prefer local production from California or Mexico. It’s a product that doesn’t travel far. It takes three days from harvest to market. So, Peruvian fruit hasn’t yet achieved the acceptance it deserves. I’d say that 70% of the fruit should continue going to Europe. Or perhaps 60% to Europe, 25% or 30% to the United States, and the other 10% or 15% to other alternative markets.”

- Given the United States' phytosanitary restrictions, what happens if many new players enter the European market?

“Currently, many exporters from other countries, such as Kenya and some regions of Colombia, are involved in the European market because they cannot access the United States. For example, Kenya cannot export to the United States due to phytosanitary barriers. Colombia has a certain number of hectares that can be exported to the United States under phytosanitary regulations, and others that cannot. And so it is with many other countries, such as Brazil. Therefore, the important thing is to know what will happen in Europe, and in that context, a key issue is related to fruit quality, because there are many origins in that market, and this impacts arrival and ripening.”

- And does that have a big impact on prices?

“That further complicates pricing, because if the fruit were uniform in quality and arrived in good condition, obviously things would be much simpler. But as soon as fruit starts arriving that doesn't arrive in good condition, everything gets complicated, because that avocado will be half the price and, in a way, it creates a chain reaction throughout the market. There's a lot of fruit and the price keeps going down. That's what's happening to some extent today.”

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