How is the avocado market developing in China?
At the end of October there was a strike in Mexico. Mexican avocado producers blocked the roads as…At the end of October there was a strike in Mexico. Mexican avocado producers blocked the roads as they protested against the prices they got for their avocados. "Many growers were unhappy with the prices and they compared the market price of the USA with the orchard’s price of the avocado paid to the growers. There was a big gap between these prices, so these strikes began to demand better prices.
This strike was a movement of the association of producers, but not all producers wanted to participate. However, the producers who continued to work were stopped by the demonstrators, who blocked the roads to trucks that were moving avocado from the orchards to the packinghouses or from the packing houses to be exported. Therefore, almost no avocados were exported during the strike. This had a strong impact on its export market to the United States. Other avocado producers from South America and other avocado producing countries took advantage of this opportunity to export their avocados to the USA and expand their market share in the USA, while Mexico couldn’t supply on time and as needed to the USA market, because of the strike,” said Juan Carlos Parra Perez of Shanghai Viocar Import & Export Trade Co., Ltd..
After the strikes, the Mexican producers again decided to continue working, even with relatively low prices, and many Chinese companies, seeing such a low price, began to buy larger volumes. In December, the avocado market in China was flooded with avocados and the price fell. "Many avocados came from Mexico during this period, because the producers looked for other markets, now that they lost a part of the market share in the United States market and saw that China was a new opportunity for them. However, China also received supplies from Peru and Chile, which caused an excess supply in the market and, consequently, a price war began in the avocado market. In this price war, all Chinese sellers tried to get a little more market share in the Chinese market. The Chinese market has great potential, but currently the market is not ready for so much supply." Juan Carlos Parra Pérez explained.
“Another reason why the price dropped, is because the shelf life of the avocados is limited. Therefore, when the Chinese sellers did not sell their avocados in a certain amount of time, they sold it for the lowest prices. Which caused very low prices in the avocado market. Four years ago, there was a similar price drop in the Chinese market, hopefully this one will recover soon,” Mentioned Juan Carlos Parra Perez. Though, according to Juan Carlos Parra Perez, the Chinese market has very much potential to grow as big as the USA market, it still needs more promotion to introduce this product to the Chinese market.
“Japan’s avocado market is larger than China’s avocado market, so avocado has potential to grow in the Asian markets, but it needs a good introduction. APEAM could really help stimulate the Chinese avocado consumption of Mexican avocados by some strategic positioning plans in the domestic market, such a promotion events in supermarket, to teach Chinese consumers how to consume avocado. Now APEAM invests a lot of money in events in the USA, while this new market in China could be expanded much quicker. Furthermore, Mexico has the big advantage that we can produce avocado year round, ” concluded Juan Carlos Parra Perez.