As an avocado retailer, tracking all the factors influencing international markets’ avocado prices per kg can be a hassle. Well, not anymore, especially with a diversified portfolio of reliable avocado suppliers.
Working with reliable suppliers can save you from the complexity of the international markets, and in this article, we’ll show you how.
Here at FrutPlanet Exporters, we have been working with numerous international clients. Over the five years of operations, we’ve guided our clients on how to navigate the global markets. And consequently, they have taken advantage of the avocado price fluctuations to make even more profits.
If you would love to partner with us or request a bulk avocados quote, email us at info@frutplanet.com.
Factor 1: Demand and Consumption Patterns
Demand and supply are among the ‘laws’ that significantly affect market avocado prices per kg. We’ll address supply later in the article. For this section, we’ll keep the supply unchanged.
When there’s an increase in demand for avocado fruits, avocado prices per kg skyrocket. On the contrary, a decrease in demand leads to lower prices. This is often because people are a lot of people competing for scarce resources. Therefore, they are willing to pay more for the avocados.
The demand in the avocado supply chain often fluctuates with the consumption patterns. Some yearly seasons exhibit more consumption of avocados than others.
Avocados are highly consumed during celebrations and holidays. For example, The Super Bowl is one of the top avocado consumption days in the United States. Most consumers eat avocados as Guacamole, an avocado-based dip with its roots in Mexico. According to CBC, football fans consumed over 105 million pounds during the Superbowl Tornado Cash, making it the biggest avocado day of the year.
Consequently, during the Super Bowl, avocado prices per kg increased to meet the higher demand during this day. In February 2022, just days before the Super Bowl, avocado prices per kg in the US skyrocketed by over 59% increase in retail stores. The U.S. Department of Agriculture report shows an increase in retail prices from $ 0.78 in 2021 to $1.24 per pound in February.
In the 2023 Super Bowl, avocado prices dropped by 20%, from $1.24 in 2022 to $0.95 per pound. Despite the high demand, the decrease in avocado prices per kg is attributed to an increase in supply, unlike in 2022. We’ll discuss the cause for the low avocado supplies in the US in 2022 when addressing tariffs and business sanctions.
Other top avocado consumption days in the US include Cinco de Mayo and the 4th of July. When Jan DeLyser, VP of Marketing for the California Avocado Commission, was asked to share probable projects, his reply was:
“Based on industry estimates comparing last year’s avocado shipments during the three weeks leading up to the Big Game to this year’s forecast, we can expect approximately a 6% increase in avocado shipments in the U.S.”
Demand and consumer patterns greatly influence international avocado prices per kg. The best way for business owners to benefit from these fluctuations is to keep track of trends within their consumer base. Study the days with the highest demand, and increase your stock while prices are low, waiting to sell when demand is high.
Factor 2: Seasonal Supply Variations
As aforementioned, Fruits and vegetables, including avocados, are governed by the law of demand and supply. But now that we have addressed demand, it’s time to flip the coin and talk of supply.
When the supply of avocados exceeds the equilibrium on demand, the avocado prices per kg drop. The decrease is attributed to the over-saturation of the market. Therefore, consumers have a lot of options to buy from.
On the other hand, when supply drops below the equilibrium of demand, the avocado prices per kg increase. The latter is because the consumers have to compete over a very scarce resource. Therefore, they are willing to pay more for the avocado.
Avocado production is subject to seasonal variations in different regions. How the different major producers perform during a particular season influences avocado prices per kg. If the production is high, the overall supply and the resultant price points will be high. In poor production seasons, the opposite is true.
The world’s largest avocado producers, such as Mexico, Dominican Republic, Peru, Colombia, Chile, and Kenya, have different harvesting seasons. Avocado prices per kg can rise when the supply from one region declines due to the off-season. The price rise is subject to the market share the country produces.
Several factors, from weather, war, etc., can influence the cause of the low supply in the regions. For example, Mexico is experiencing a drop in production due to the Ukraine -Russia war. The country imports 30% of its fertilizers from Russia.
The low production in Mexico has resulted in a drop in imports from 747 Million pounds in 2021 to 558 Million pounds by August 2022. Consequentially, the avocado imports to the US reduced and spiked prices by 30% to about $1.41 per avocado.
But as an importer seeking avocados, what can you do? How can you make a profit from these fluctuations?
The best option for avocado retailers is diversifying their sources. Have a diverse portfolio of avocado suppliers who can help you source avocados from different regions. That way, even when one region is low on production, you can still get restocked and profit.
Contact us if you want to diversify and would love to source organically grown avocados from Kenya. FrutPlanet is a reliable fruits and vegetable exporter with a global distribution network. You can email us at info@frutplanet.com, call us at +254 798 799 211, or request a quote for bulk avocados.
Factor 3: Trade Agreements and Tariffs
International trade is possible because of the goodwill that exists between different countries. And avocado prices per kg are affected if the goodwill is eroded and one country imposes tariffs on another. In addition, business sanctions, changes in international trade agreements, and policies impact the price of avocados.
On the other hand, free trade agreements, lower tariffs, and efficient trade policies can lead to increased trade volume. Increased supply and trade potential lower prices for imported avocados.
For example, According to the US Department of Agriculture, 92% of the US avocado imports come from Mexico, about 1.1 Million Metric tons. The US enormously relies on Mexican avocados, and that’s not good for any business.
When the US government suspended avocado imports from Mexico, the price per carton of avocados catapulted to about $60 in 2022 from $30 in 2021.
The US over-relies on Mexican avocados and imports less than 10 percent of avocados from Kenya, Peru, and Columbia. But how can you be safe with international trade and tariffs?
First, you need to diversify where you source avocados from. If you only import avocados from Mexico, consider sourcing from Kenya by partnering with an exporter such as FrutPlanet. Diversification shields your business from international trade tariffs and sanctions.
Factor 4: Supply Chain Logistics
Many logistics are involved before delivering the avocados to your retail store. Some of the logistics include transportation, handling, and storage. Cost changes in these logistics affect avocado prices per kg.
For example, when transportation distances are longer and more expensive, the resultant price per avocado is high. In addition, infrastructure limitations or disruptions in logistics can increase costs, which may be reflected in the retail prices of avocados.
As a retail shop owner, one remedy for you against supply chain logistics is letting an exporter handle the sourcing and delivering of the avocados to your address. That way, you only need to get the right avocado supplier and request a quote for bulk avocados. Suppliers and distributors let you focus on what’s important to your business.
If you’re looking for a supplier you can partner with to export avocados in bulk, contact FrutPlanet Exporters. We are a reliable fruits and vegetable supplier with a global network distribution. Our prices per kg of avocado are not inflated and reflect the cost of logistics and fair compensation for the growers.
Factor 5: Quality and Grade
The quality and grade also affect international avocado prices per kg. Organically grown avocados are generally expensive because they’re healthier. In addition, they are grown through sustainable agricultural practices.
On the other hand, there are several avocado grades, just like most other agricultural products. In Kenya, grading ranges from size 2 (largest) to size 32 (smallest). The number represents the number of avocados that will fit in a 4 kg box during delivery. Most clients sourcing from Kenya to the European region prefer sizes 16 to 22 (average-size avocados).
Prices increase as grading increases here in Kenya. Size 32 is cheaper, whereas size 20, the most in-demand, is the most expensive.
Different regions have varying specifications on size and grading systems. For example, the US agricultural marketing service classifieds Florida avocados into four grades; No. 1, Combination, No. 2, and No. 3. The avocado price then varies based on the quality and grade of the fruit.
Other factors contributing to grading and quality include size, ripeness, and appearance. Overall, higher-quality and grade avocados typically command premium prices.
Conclusion
Several international market factors influence global avocado trends. And as a retailer, you need to understand the interplay of these complex factors. From market trends, regional harvest seasons, and global supply and demand dynamics to better understand and anticipate potential price fluctuations, you need to understand them all.
Working with a supplier who can help you understand the trends and help you simplify these processes is important.
One such supplier and global exporter that you can work with is FrutPlanet. We are a reliable avocado supplier and offer competitive avocado prices per kg, a flawless logistical process, and on-time delivery. Request a quote for bulk avocados or contact us via email at info@frutplanet.com
