Avocado Price Reach Record Highs. But What Is Causing Avo Prices To Spike?

The avocado price is rising, but why?

unripe-avocados

Hailed by celebrity chefs like Nigella Lawson and Instragram “clean eating” gurus like @deliciouslyella, the avocado has become synonymous with healthy eating.

Consumption in the UK has grown by roughly 30% year-on-year, making the avocado so popular that they are now outselling the humble orange. In the UK alone, shoppers spent a whopping £128 million in the last year on the green “superfood”.

High street sandwich shop, Pret A Manger, recently announced that their customers chomped their way through 5 million of the green fat sources in 2015 alone and played a major part in the double digit sales growth of the chain. On the other side of the pond, our American friends are also consuming vast swathes of the fruit, getting through almost 2 billion pounds of the stuff last year. That’s virtually twice as much as they were eating just 10 years ago.

But anyone with a taste for the avocado knows that – not only are they not cheap – they are getting more expensive. Seemingly by the day. In July, the price of avocados hit record highs in American commodity markets, topping off at $63.75 per pallet (60 avocados per pallet). That’s a whopping 73% increase from the previous year.

chart of haas-avocado-prices

The Haas Avocado Board, a body that oversees virtually all of the US avocado market, the rapid rise in demand has lifted the price of a single avo from $1.50 to almost $2.50.

But don’t fruit and veg prices (and in particular, avocado prices) fluctuate wildly between seasons. That’s true, however, this year’s peak is actually up 42% on the previous high of $45 in January 2015.

The major producer of avocados for the global market is Mexico and seems to be the source of the rapid rise in avocado prices. As the world’s largest producer and exporter of avocados, Mexican avocados account for half of all avocados consumed in the US. This has largely been fueled by the lifting of a trade ban in 2007 and has generated over a billion dollars in revenue for the Mexican economy annually.

The US relies on these imports because the Californian growing season is so short, often ending as early as October. Mexican avocado imports help keep up with the year-round demand that the country has for avocados.

Recently, Mexico has been struck by poor harvests and lengthy industrial action throughout the state of Michoacan, which is the largest avocado producing region in the country. Naturally, the result of this has been significant decline in exports, leading to an exponential rise in the avocado price for the end consumer.

avocado price

Earlier this month, more than 500 avocado farmers from across the region went on strike, blocking roads and stalling shipments due to the fruit’s unstable price.

Buoyed by the knowledge that their main competitors, Peru and Chile, are unable to make up the shortfall, Mexican growers are now intent on extracting a higher price from packers operating across Mexico, whom they claim enjoy a five-fold markup in exports to the US market.