AVOCO urges grower caution as Mexico signals interest

AVOCO urges grower caution as Mexico signals interest in supplying Australasia

TAURANGA: June 19, 2018: Early moves by Mexico’s avocado producers to enter the Australasian market is a timely reminder about the benefits of supporting market development in Asia, says AVOCO.

While success by Mexico to gain avocado market access to Australia and New Zealand is far from guaranteed, the company says it has a watchful eye on supply competition in Australia where growing avocado consumption there is making it an attractive option for other growing nations.

Earlier this year, Australian government officials confirmed they were starting a risk assessment for importing fresh avocados from Chile – the start of a process that could lead to Chile gaining market access. Currently, only avocados from New Zealand can be imported into Australia.

The Association of Producers and Packers Exporters of Avocado in Mexico (APEAM) this month signalled their interest in exporting to Australasia. This stems from new free trade opportunities for Mexico emerging out of the Comprehensive and Progressive Agreement for Tran-Pacific Partnership (CPTPP). The free trade agreement involves 11 countries in the Asia-Pacific region, including New Zealand, Australia and Mexico. Its signing on March 8 established the largest free trade area in the world.

AVOCO’s marketing and communications manager, Steve Trickett, says he was confident Australia would continue to reward New Zealand growers if conditions changed. But interest from Chilean and Mexican exporters in Australia’s market especially, was a reminder about the industry’s need to investigate options further afield.

There has been euphoria within the New Zealand industry following last season’s strong returns, with AVOCO again delivering a record high.

However, Mr Trickett points out that the harvest delivered the lowest volume in over five years and in many markets, demand exceeded supply for much of the season.

“While we remain positive about future opportunities for the category, we also urge caution that a bumper crop is just one good fruit set away. Markets and competitive forces do change, so we continue to encourage growers to focus on ensuring access to all export markets available to us.”

AVOCO was leading the way through market development in Asia where, under the AVANZA brand, AVOCO was creating demand for premium quality New Zealand avocados.

Strong values for fruit were being achieved on the back of growing awareness in Asia about avocados’ health benefits, he says.

“Close to eight out of every ten New Zealand avocados exported to the main Asian market grouping of Korea, Japan and Singapore carry the trusted AVANZA label. In emerging markets such as India, we represent 100% of New Zealand exports.”

Mexico is the world’s largest avocado growing nation, and exports avocados all-year round. Marked seasonal crops in New Zealand and Australia, combined with growing demand for fruit, makes the two countries attractive and complementary new markets, according to APEAM.

In an interview with Mexican news agency Notimex, the association’s strategic adviser, Ramon Paz Vega, said Mexico could take advantage of the opportunity to export its avocados to Australasia when it lacked domestic production.

Mr Trickett says it would be difficult for other growing nations to gain market access to New Zealand or Australia due to strict phytosanitary measures. But outside interest should serve as a reminder to the industry that it could not afford to be complacent about its future.

“That’s why AVANZA was developed to future-proof our industry and the livelihood of our growers,” he says. “Avocado consumption in Australia keeps growing every year and with that growth comes real value. But we’ve always been careful to manage our markets responsibly and not rely too heavily on Australia.”

In 2018-19, AVOCO is likely to send about 80% of its volumes to Australia and 20% to Asia. This will ensure long-term retail customers in Australia will be supported while, at the same time, enable market growth in emerging Asian markets, including China.

AVOCO director John Carroll says that should Chile or Mexico gain access into Australia and impact values there, the business had options.

“We’ve worked hard in Asia to establish our identity and build a solid reputation for quality fruit, world-class technical support for retailers and supply chain excellence.

“Our track record in Asia is sound and our relationships with key customers mean that we have the connections to confidently deal with any ‘if or when’ scenario that emerges across the Tasman.”

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