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Changing market conditions swing in NZ's favour
1 January 2015

Rapidly changing market conditions in Australia have swung in New Zealand’s favour and AVOCO is working hard to make the most of these new opportunities.

Retailers and exporters, both here and across the Tasman, were anticipating a large crop out of Western Australia to flow through to the marketplace this season due to favourable growing conditions. Avocados are a key horticultural industry in Western Australia and early reports suggested growers there were on track to produce a record crop of 24,000 tonnes.

However, the state’s revised crop estimates revealed a crop shortfall at the start of December which has created an opportunity for AVOCO, New Zealand’s leading avocado exporter.

AVOCO director John Carroll says their experienced marketing team were able to respond to the changing market landscape quickly to ensure AVOCO fruit could fill any wholesale market gaps.

“As soon as we had confirmation about Australia’s crop shortfall, we were able to connect with our market contacts and jump onto the emerging opportunity at the first chance we got.

“As AVOCO, we’re fortunate we can manage our harvest in such a way that we can maximise the market value of our fruit on behalf of growers.”

The large volume of fruit coming out of Western Australia in November clashed head on with New Zealand avocados in the wholesale market which softened prices. AVOCO had expected that and stuck to its pre-season marketing commitments, expecting the tide to turn when the flow of Australian fruit came off its peak, normally in the New Year.

Their crop shortfall was unexpected but in the space of a week, the new market conditions led to some strong sales for AVOCO fruit, which bodes well for the next two months of selling the joint entity has ahead of it.

AVOCO formed more than 18 months ago, merging the two experienced avocado exporters Southern Produce and Primor Produce. In its first season, AVOCO exported 1.9 million trays and is on track in what is a record season for the industry to export about 3.1 million trays. This is the equivalent of about two-thirds of the New Zealand industry’s projected export volume for 2014-15.

Australia is AVOCO’s biggest market but through its marketing partnership with AVANZA, it also exports about 34% of its fruit to the US and key Asian markets, such as Japan and Singapore. The last of AVANZA’s shipments arrived in the US last month and packing for Japan was completed by Christmas.

AVOCO had harvested about 75% of its crop by the end of last month.

Picking and packing continued for growers and packhouses throughout the holiday season. AVOCO director Alistair Young says January is still an important time for the industry and the ability to maintain a consistent supply of fruit is critical.

“To capitalise on the opportunity these new market conditions present, it’s important for us to keep calm heads about the appropriate pace and flow of our fruit. As part of the bigger picture, we need to continue supplying fruit through to early March for our retail customers.

“We need to do everything in our power to ensure our harvest continues uninterrupted and the packing arrangements we have in place can accommodate our programme.”

 

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Partners: Southern Produce, Primor, Team Avocado

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