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No cash avos

The global avocado craze

Record prices for avocados have sparked strikes in Mexico and a crime wave in New Zealand….

Championed by Nigella Lawson, beloved by healthy eaters and a staple on the Instragram accounts of foodies, the avocado has become so ubiquitous that some wags have christened it the over-cado.

With consumption growing in the UK by nearly a third every year, the avocado is now so popular that sales of the fruit overtook those of oranges last year. British shoppers spent a record £128m on avocados in the 12 months to March this year.

 Pret A Manger, the high street chain, recently said that its customers ate more than 5m in 2015 alone, helping the company to double-digit sales growth. 

Across the Atlantic, Americans are also consuming vast quantities of the fruit, with 1.9bn pounds consumed last year – nearly double what was eaten a decade ago.

But they are not cheap – and are getting more expensive. In July, avocados surged to record high prices on the US commodity markets, reaching $63.75 (£51.05) per tray – which in the US holds 60 avocados – up 73pc from $36.75 during the same period last year.

According to the Haas Avocado Board, which presides over 95pc of the US market, the surge has pushed the price of an individual avocado up from $1.50 to almost $2.50. 

While prices have often been known to fluctuate seasonally, this year’s spike is up 42pc on the previous high of $45 recorded in January 2014. 

AvosThe reason for soaring prices can be traced to Mexico, the world’s largest producer and exporter of the fruit. Since import bans to the US were lifted in 2007, Mexican imports have grown to account for 49pc of all avocados consumed by Americans, injecting an estimated $1.09bn into the Mexican economy annually.

With the Californian growing season ending in October, US markets are reliant on Mexican imports to keep up with year-round demand. However, recent poor harvests and ongoing industrial action across the southern Mexican state of Michoacan, the country’s largest avocado-producing region, has led to a serious decline in exports.

Earlier this month, more than 500 avocado farmers from across the region went on strike, blocking roads and stalling shipments due to the fruit’s unstable price.

Buoyed by the knowledge that their main competitors, Peru and Chile, are unable to make up the shortfall, Mexican growers are now intent on extracting a higher price from packers operating across Mexico, whom they claim enjoy a five-fold markup in exports to the US market.

While the wage disputes are understood to have concluded last week, the fallout across international markets is expected to continue for at least two months.

As a result, US-trade volume has plummeted below average levels of 45m pounds a week to just 8.5m in the seven days to Oct 16, which wholesalers described as the biggest disruption to avocado imports in history.

A poor Californian harvest has compounded the shortage, as drought-weakened trees produced small quantities of sub-standard fruit across the Golden State.

The shortage has had knock-on effects in the restaurant industry, with the rising price of guacamole eating into the profit margins of chain Mexican restaurants including Chipotle and Del Taco.

At the end of last year, New Zealand also had a poor season. This resulted in up to 40 large-scale thefts from avocado orchards across the country in the first half of the year. Across the Tasman Sea, Australian supermarkets started putting up signs saying: “NO CASH or AVOCADOS are kept on the premises overnight.”

The Hass Avocado Board has since moved to reassure buyers that shipments will return to normal in the coming weeks, while Hormel Foods, producer of the US’s best-selling guacamole, said it was leveraging its global supply chain to offset the impact of the shortage.

In the UK, a 30pc increase in sales is also putting pressure on foreign exporters including Chile, which suffered a sluggish start to the growing season.

Chile, Israel, Peru and South Africa account for 90pc of avocados exported to the UK, with imports increasing 76pc last year. 

But a new trade deal signed with China  for 10,000 tons annually threatens to limit supply to British retailers, while drought in South Africa – the UK’s largest supplier – has increased fears of a countrywide shortage, in turn causing supermarket prices to shoot up.

Inflationary pressure and the fall in the value of sterling is unlikely to help…..

The Telegraph: Read the full story

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