The strong demand for avocados is expected to keep prices stable during 2021 as global players start entering the Asian market. In the past, demand for avocados was driven by consumers in the US and EU, but Asia was fast catching up.
Paulina Theologou, Westfalia’s group commercial executive, said although South Africa did not yet have market access in China, the fact that Columbia, one of the world’s largest producers, had access to this market alleviated pressure on the EU market.
“Much of the global production already goes to the EU, including most of South Africa’s crop. So, we are facing a lot of competition.
“Keeping prices sustainable will depend on ensuring that there are no gluts on the market. But I believe that it will be at least another decade before we reach this level. Once demand really takes off in India and Asia, there will not be enough supply to service these markets.”
She noted that the Middle East was another market that South Africa needed to target for avocado exports, since the country was one of few production regions close enough to make exports viable.
Derek Donkin, CEO of the South African Subtropical Growers’ Association (Subtrop), said the COVID-19 pandemic had delayed proceedings for gaining access to markets in Asia.
“Chinese authorities have now started with pest risk assessments, which is very encouraging.”
This year would see a slight increase in the crop due to new areas coming into production, but the industry was not expecting a bumper crop.
“It is still very early to give a crop estimate, but as far as we can see, fruit set was not as good as was hoped for. Last year we ended with an export crop of 63 000t, which was also lower than the initial prediction, as adverse weather affected the yield.”
He said the rain received in the production areas was adequate, although the Tzaneen Dam was still very low. “Farm dams have filled up and there will be sufficient water for irrigation,” he added.
Donkin said that while promotions ensured that prices remained profitable, large volumes entering the EU mid-season saw prices dipping.
“But once that clears, our farmers get good prices. We are also seeing increasing demand for avocados locally and since the season ended early last year, January prices are expected to be high since supply is low.”