Emerging Markets / August 17, 2017

Colombian Avocados Set to Enter the US Market

In recent years, the consumption of avocados in the United States has increased substantially, driven largely by an increase of the domestic Hispanic population and the popularity of its foods. Furthermore, as consumers become increasingly aware of avocados’ health benefits, their popularity is expected to continue growing. Currently, the major producer and supplier for the avocado market within the United States is California, which is home to more than 4.000 avocado farms, mainly around the areas of the San Joaquin valley, San Diego, Ventura, Santa Barbara, and Riverside. Throughout the last decade, the United Sates has produced little over 200.000 metric tons of avocados annually, more than 80% of which come from California. However, the increase in avocado demand is putting stress on domestic avocado producers, who can only harvest during certain months of the year and yield a limited amount of fruits. Simultaneously, this dynamic implies costs for avocado consumers, who depend almost exclusively on Mexican avocados to supplement domestic production.

Nevertheless, in recent months, the United States Department of Agriculture (USDA) finalized the approval process that authorizes Hass avocado imports from Colombia. Likewise, back in 2010, the USDA approved the import of avocados from Peru. The import of Hass avocados from South America into the United Sates is expected to strengthen yearlong supply of this goods and lower prices for consumers. The import of Colombian avocados into the United States market, starting the latter months of 2017, will represent a great opportunity for Colombian farmers to tap into a trade that was worth approximately US$2 billion during 2016 and 90% of which is currently dominated by Mexican suppliers. This major announcement, which came during Vice President Pence’s recent tour through South America, will certainly help boost agribusiness in Colombia as it is expected to double the country’s avocado exports in the coming years.

Colombian Avocados Set to Enter the US Market

Currently, it is estimated that Mexico represents little over 30% of the global Hass avocado production, while the United Sates accounts for some 7%, and Colombia yields about 4% of the Hass avocado production worldwide. However, in recent years, Colombia’s avocado exports have been growing, increasing from US$171.000 in 2011 to over US$35 million in 2016. Nevertheless, as of today, avocado exports from Colombia are mainly limited to European markets. One of the advantages of avocado farmers in Colombia is that they can produce yearlong, whereas those farms located in other latitudes of the world are limited by seasonal changes. Given that Colombia is seeking to eradicate illicit crops as part of its ongoing implementation of the Peace Accords, the government’s aggressive program of crop transition holds great potential for avocado production, whose acreage increased by more than 120% throughout the last five years. The USDA estimates that some 10.000 metric tons of Colombian Hass avocados will start entering the United States market on an annual basis. In anticipation, agricultural distribution companies in the United States are already setting up partnerships with avocado producers in Colombia to commercialize their imported goods.

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