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Fluctuating volumes hinder market development
4 September 2015

Export leaders AVOCO are confident avocados will remain a top New Zealand export for many years to come but say fluctuating crop volumes place an unhelpful handbrake on market development.

Data out from Statistics NZ showed the value of fruit exports reached an all-time high of $2 billion in the year to June, up almost 20 per cent from a year earlier.

Kiwifruit was responsible for 59 per cent of fruit exports, followed by apples (28 per cent) and avocados (5.7 per cent).

Driving this export growth is a desire among consumers worldwide for healthier food. Last season, consumption of avocados in Australia, which is AVOCO’s most important export market, grew by 30% on the previous year. A total of 3.2 million trays of New Zealand avocados were sold despite heavy competition on the shelves from Australian avocados.

The sales growth in Australia and in key Asian markets through AVOCO’s marketing partner AVANZA helped to uphold Orchard Gate Returns to New Zealand growers during a record production year for the industry.

In 2014-15, growers produced 7 million trays, with 4.5 million shipped offshore. AVOCO handled 2.8 million trays, equating to 62% of the export volume.

However, this year’s crop estimate is well down, reflecting the industry’s issue with irregular crop bearing. Avocados are considered a biennial crop, meaning volumes in some orchards fluctuate from high to low each year. 

Early estimations suggest New Zealand will produce a total of 4.4 million trays, with 2.9 million for export.

AVOCO director Alistair Young says the shortage of fruit this season was a handbrake for exporters who, in recent years, had invested heavily in developing the markets.  In Japan and Singapore last year, sales grew by 144% and 80% off the back of targeted promotions aimed at creating awareness of the health benefits of avocados and New Zealand fruit being “in season”.

Exporters were unlikely to reach the same level of growth this season due to the low crop volume.

“That’s disappointing from a supply perspective because we have retailers in Asia especially who want to do more business with us after their experience last year when avocado sales were a real growth product for them.

“This year we’ll be shipping less and it’s an opportunity lost. The upside to this, however, is values will be higher due to the supply/demand imbalance.”

Mr Young added AVOCO would remain disciplined in its planning this season to extract as much value out of the markets as possible. “It was our disciplined flow planning which helped to uphold values during last year’s record harvest and we’re all set to do the same again this year – albeit with less fruit.”

It’s expected AVANZA, which is a marketing group made up of AVOCO and another exporter, will again handle 75% to 80% of avocado exports outside Australia.

After harvesting starts in the Far North near the end of August, fruit will start flowing through to key Asian markets, starting with Japan. However before the first shipments arrive, AVANZA representatives will kick off their 2015-16 marketing campaign by attending Asia Fruit Logistica in Hong Kong this month – Asia’s leading trade show for the fresh fruit and vegetable industry. AVANZA will operate a joint trade booth with US-based marketing partner, Mission Produce.

AVOCO director John Carroll says staff will meet with existing Asian customers and let them know that, working together, it is AVANZA’s and Mission’s goal to offer a 12-month solution to the growing demand for quality avocados.

 

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