Avocado Prices Explained

Avocado prices will go north as continuous regional demand dominates the market. Additionally, the one-week import suspension in Mexico sent organic avocado prices surging. Primarily, the U.S. remains the top importer of the commodity.

China’s imports show an upturn, with South Africa entering the Chinese market. Peru’s Westfalia avocado imports to Japan increased by 58% due to the increasing integration of the commodity into sushi.

Why are avocado prices fluctuating?

1. Supply and Demand

Generally, these elements play a significant role in the avocado market. When supply is low due to weather-related issues, disease outbreaks, or other factors, its demand exceeds the available supply, driving up prices. Conversely, when there are plenty of stocks and the need remains steady, prices may fall.

2. Production Shortages

Normally, avocado production is not immune to natural disasters and weather events as several regions faced challenges in the previous year.

For instance, Mexico, the world’s largest avocado producer experienced drought conditions that reduced yields. Additionally, California (another significant avocado-growing region) frequently battles wildfires and water scarcity. Thus, limiting its production and contributing to avocado rising prices.

3. Weather Conditions

Also, droughts or floods affect avocado costs. Thus, these events largely damage crops and reduce yields, ultimately increasing production costs and prices.

4. Transportation Costs

Avocados are often imported from countries like Mexico, Chile, and Peru. Therefore, if the cost of shipping and handling increases, it influences avocado retail prices.

Which variables impact the price of an avocado?

• Supply and Demand
• Production Shortages
• Weather Conditions
• Transportation Costs
• Import Taxes

Where do avocados come from?

Avocados originated in the region that includes modern-day Mexico and Central America. Additionally, the earliest evidence of avocado cultivation dates back to around 5000 BC in present-day Puebla, Mexico.

Also, the Spanish colonizers introduced avocados in Europe in the 16th century. Moreover, its cultivation spread to other parts of the world, including the United States, South Africa, Australia, and New Zealand through trade. Furthermore, it thrives in other parts of the world with suitable growing conditions such as Spain, Israel, and Kenya.

Today, Mexico is the world’s largest producer of avocados, accounting for around 30% of global production. Other major producers include Peru, Chile, the United States, Indonesia, Colombia, and the Dominican Republic.

What is the future price of avocado?

The World Avocado Market Projection Up 2030 report reported that the global avocado market is expected to reach a value of  $20.57 billion by 2028, growing at a CAGR of 6.1% in the same year. This positive trend stems from the growing importer’s appetite, particularly in the U.S. market. The country’s import records increased by 11% year-on-year. Also, Europe’s consumption is evolving with a forecasted increase in purchases in the coming years.

Furthermore, market analysts see potential in Asia as exports surged 29%, with China leading the way. This marketability and changing weather systems will dominate the avocado market, resulting in its fluctuating prices.

Here’s the rough price estimate of avocado’s potential prices in 2030:

1. Low-end ($2.50 per avocado) – This price will be achieved if supply chain disruptions are resolved, production expands, and consumer preferences remain steady.

2. Mid-range ($3.00 per avocado) – This value will likely reflect a balanced market with moderate supply and demand dynamics.

3. High-end ($3.50 per avocado) – This rough estimate happens when supply chain disruptions continue, production struggles to meet demand, or consumer preferences for avocados continue to grow.