Australian Avocado Prices Soar as Supply Goes Pear-Shaped

February 20, 2016, 11:12 PM UTC
Courtesy: Chipotle

While prices for most Australian commodities are bumping along the floor, local avocados are fetching a king’s ransom thanks to hostile weather, strict quarantine laws and a Christmas binge.

Outside South and Central America, where the fruit is native, Australia has the highest per-capita consumption in the world, at an annual 3.2 kilograms (kg), or about 15 fruits, according to industry body Avocados Australia.

But while Australian demand for the fruit has been fueled by its store of healthy fats, supply has been strangled by heavy rain and bushfires, and because growers in western Australia, anticipating a fall in demand after Christmas, exhausted their stocks to flood the market in the lead-up to the holiday season.

That has sent the price as high as A$7 ($5) per fruit, compared with just under $1 in the United States and around 1 pound ($1.43) in Britain, prompting some wags in the grocery trade to tweak their usual warning to burglars to: “No cash or avocados are kept on premises overnight.”

One Mexican food truck in Sydney has resorted to what some critics say is sacrilege—using bulk-bought frozen avocado in its nachos and tacos to avoid over-reliance on the volatile market.

“We were at the mercy of growers and paying through the roof,” said Cantina Mobile owner Stephanie Raco.

Global consumption of avocados, now a $3 billion industry, has doubled in the last decade, and a third of the 3.8 million tonne annual harvest is currently traded internationally, according to data from the Food and Agriculture Organisation of the United Nations.

But Australia’s determination to avoid bringing in pests, plant disease and weeds, means it takes very few of those.

So far, only neighboring New Zealand can sell its crop in Australia, supplying up to 15% of domestic demand.

Australia’s Department of Agriculture said Mexico and Chile have pending export applications but declined to give a timeframe. Such deals can take years of negotiations.

The United States, where demand has jumped from 0.7 kg/person in the 1990s to around 2kg now, has had similar production problems to Australia, with drought hitting the key growing state of California.

However, unlike Australia, the U.S. has secured a large import network from Mexico to Peru and Chile and even as far as New Zealand to meet demand. Imports have doubled in the last decade, said Jan DeLyser, the spokeswoman for the California Avocado Commission.

Mexico, which advertises its products during the primetime Super Bowl game, is the world’s largest exporter and has been increasing production to keep up with growing global demand.

Michoacán, the largest avocado-producing area in Mexico, produced 1.2 million tonnes in 2014, a third of global output.