The hurdles facing SA’s avocado industry

South Africa’s avocado industry is moving towards greater global market access, unfortunately just as prices start stagnating in Europe.

Last year saw an estimated 135 000t of avocados produced, and Derek Donkin, CEO of the South African Avocado Growers’ Association, said the 2022 crop would be larger, although it was too early to predict an exact figure.

He noted that the greatest challenges for the industry were rising input costs and a potential mid-season oversupply to the international market, as South Africa’s peak season coincided with that of its major competitor, Peru.

Zander Ernst, director of marketing and production at Allesbeste Boerdery, said more farmers were trying to get into the market earlier, capitalising on better prices offered between weeks seven and 18. “The gap in this market is only so big, and as it becomes crowded with both South African and Peruvian produce, prices react. In previous years, we saw €15 (about R275) to €18 (R330) offered for a 4kg carton, but it seems we’ll be moving towards €12 (R220) this year.”

He noted that the increased supply on the avocado market, coupled with the economic impact of COVID-19 and limited restaurant trade, had resulted in lower prices overall.

Simultaneously, the industry faced higher input and shipping costs.

“Our fertiliser alone is 300% more expensive than in the previous year. The assumption in the industry is that even if we can get shipping containers, they’ll come at far higher prices. All of this needs to be absorbed somewhere, and it will take clever marketing to navigate the higher costs with the lower prices.”

This emphasised the need for South Africa to gain entry into new markets, particularly to offset over-reliance on Europe. This year, progress was expected on access to the US market, after several years of unsuccessful negotiations.

Donkin said that access for South African avocados was dependent on counter-trade requests, diplomacy and government relations.

“The issue over poultry imports has held us back in particular, but it seems as if we’re moving forward now. If the political and trade climate is good and we’re able to prove that cold treatment is good enough to meet phytosanitary requirements, we’ll have US access within the next two years.”