Australia’s avocado industry is experiencing another year of record production and low prices, according to a recent report by agribusiness banking specialist Rabobank.
The report noted that while domestic demand for avocados remains strong, the global appetite for this nutrient-packed fruit is providing a much-needed boost for Australian growers through increased export demand.
Rabobank’s Global Avocado Update 2024 revealed that the forecast for Australia’s avocado crop in the financial year 2023/24 is up 20 per cent year-on-year, reaching a record 139,000 metric tonnes.
This surge is driven by over 1,500 hectares of avocado plantings reaching maturity this year, with more than 4,000 hectares expected to mature in the next five years, according to RaboResearch analyst Pia Piggott.
Despite local demand growing at a compound annual growth rate (CAGR) of 10 per cent over the past decade, the Australian market is oversupplied, resulting in persistently low prices.
However, rising export demand, which accounts for 13 per cent of Australia’s total avocado production, offers significant growth opportunities.
In 2023, total Australian avocado exports increased by 55 per cent year-on-year, with notable growth in markets such as Japan and other regions.
Piggott highlighted that new market access to Thailand and India could further diversify exports, though this may not be sufficient to prevent prices from continuing to decline.
Domestically, avocado prices have remained volatile, reflecting fluctuating seasonal supply.
While some price increases are expected in the summer months due to lower production in Western Australia, overall prices are anticipated to decline as supplies increase.
Globally, avocado consumption and import demand are projected to grow, particularly in the United States, the world’s largest avocado importer.
The US consumed over three billion pounds of avocados in the 2022/23 season, with import demand continuing to rise.
Europe and Asia are also seeing significant increases in avocado imports, indicating a strong future market potential.
According to Rabobank, to meet this growing demand, global avocado production and exports are expected to continue their rapid growth.
Mexico remains the largest avocado exporter, with Peru and Colombia also expanding their export volumes.
“We are also seeing an increasing number of South American countries becoming significant avocado exporters – like Brazil and Ecuador – while Africa is far from reaching its potential when it comes to avocado production,” Piggott noted.
Despite positive prospects, Piggott cautioned that avocado producers must innovate to stay profitable amid competitive markets and supply challenges.
The industry may see increased consolidation, particularly in South America, as competition and margin pressures rise.
“We expect Hass avocados will continue to dominate in the near-term, but we also anticipate hass-like varieties that have higher yield potential and improved efficiencies, will gradually gain adoption in the coming years,” Piggott concluded.
