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Picture: 123RF/NAMEPIC
Picture: 123RF/NAMEPIC

Avocado prices jumped to their highest level in more than two decades amid tightening supplies in Mexico, the world’s biggest exporter of the fruit, signalling pricier guacamole. 

An index tracking avocado from the Mexican state of Michoacan, by far the biggest source in that country, climbed 81% this year to 760 pesos ($38) a 9kg box, the highest in data going back to 1998, government figures showed.  

“Lower availability and supply side inflationary pressures are the main suspects,” said David Magana, an analyst at Rabobank International. 

Mexican avocado output is expected to drop 8% in the 2021/2022 crop year from a record high the previous season, according to the US agriculture department. US importers of the fruit are still catching up from a temporary ban on shipments from Michoacan last month stemming from threats against US inspectors. 

Mexico accounts for more than 80% of the avocados consumed in the US. In California, which feeds about 15% of US demand, production is forecast to rise this year “but clearly not enough to satisfy growing avocado demand in the US”, Magana said.

Companies already are feeling the pinch from higher prices. First Watch Restaurant Group said its costs are rising towards the high end of its projections.   

Mission Produce, the largest US avocado distributor, raised prices by 50%. “Partially offsetting price gains was an 18% decrease in avocado volume sold, which was primarily driven by lower supply, but exacerbated by price sensitivity in select international markets that competed for lower cost sources of fruit,” CEO Steve Barnard said in a statement.

US per capita consumption of avocados has more than doubled since 2010 to more than 4kg, according to Rabobank’s research.

More stories like this are available on bloomberg.com
Bloomberg


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