Off year for Chilean avocados could cut into Chile’s supplies to Europe - The Packer

Off year for Chilean avocados could cut into Chile’s supplies to Europe

09/15/2010 01:40:49 PM
Jim Offner

Ongoing economic troubles and talk of national bailouts continue to spread across Europe, and shippers of Chilean avocados are wondering what sort of market awaits their product across the Atlantic.

“Avocados will go to where the money’s at,” said Jim Donovan, vice president of global sourcing of Oxnard, Calif.-based Mission Produce Inc. and chairman of the Irvine, Calif.-based Hass Avocado Board. “I believe that it’s possible that we could see a little less fruit go to Europe as a percentage of their crop and perhaps a little more to the U.S. as a percentage of its crop.”

But Donovan said there are no guarantees.

“Whatever happens, it will be determined by the market,” he said. “If the European market is stronger, we could see the opposite happen. We’ve grown so much in the U.S. market, the demand has continued to increase.”

Another factor: After a bountiful production year in California of around 400 million pounds, domestic supplies likely will be leaner next year in the U.S., said Dana Thomas, president of Index Fresh Inc., Bloomington, Calif.

“This year, we’re looking at 20% to 30% less product in the United States, although it’s still early on the estimate,” Thomas said. “They have opened up more marketing in Europe, but they haven’t finalized how much.”

Shippers note that as much as a quarter of Chile’s avocado production is designated for European markets.

“We always send 23% of our total volume there, which is a very small amount,” said Maggie Bezart, marketing director for the Chilean Avocado Importers Association, Washington, D.C. “It’s a developing area. Consumption there is nowhere near consumption here in the United States. We’re probably looking at that same volume, if not a little less, depending on the economy.”

Thomas also said that European demand for avocados was increasing.

“The market has been growing, especially for the Chilean avocados. It’s become a bigger part of the deal,” he said.

Europe provides a much-needed outlet for Chilean fruit, said Phil Henry, owner of Henry Avocado Corp., Escondido, Calif.

“It has taken some pressure off Chilean exports that would have to be shipped to the United States,” Henry said. “That takes pressure off and helps them a lot. That means they can afford to take a closer look at timing of what they’re doing in California.”

Economic circumstances will dictate Chile’s European plans, Henry noted.

“It’s not just the European economy, but the relationship between the euro and the Chilean peso will affect that deal, as well, just as the Chilean peso and U.S. dollar affects somewhat what they’d do in the United States,” he said. “But the economy in the U.S. hasn’t been that great either, and demand has been strong.”

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