Australia’s avocado oversupply is “just the beginning” with domestic production tipped to jump by 40 per cent in the next five years.
A supply boom means households have been enjoying avocados at cheaper prices.
But agribusiness bank Rabobank suggests Australians will need to eat and export even more, as growers navigate soaring production growth over the next five years.
This year alone, the per capita supply of avocados is estimated to be up 26pc on the previous year to 4.8 kilograms, equating to 22 avocados per Australian.
A bumper crop, mainly in Queensland and Western Australia in 2021-22, has caused a national oversupply, which saw retail prices plunge to a record low $1 each in June 2021, and again last month.
Retail prices this year are 47pc below the five-year average for avocados.
Consumers currently facing significant price rises for many other food items and household staples have welcomed the low prices.
But, they have put considerable pressure on grower margins, already squeezed by increasing input costs and labour shortages, RaboResearch associate analyst Pia Piggott said.
Overall, Australia’s avocado production for 2021/22 is estimated at 124,000 tonnes, with estimated imports of 12,500 tonnes for the year.
Industry forecasts predict domestic avocado production to expand by 50,000 tonnes in the next five years, reaching 173,000t in 2026.
All avocado-growing regions in Australia are expecting production growth, Ms Piggott says.
The volume of avocados eaten by Australian households jumped 31pc in 2021-22 compared to the previous year, while they spent 29pc less on them due to the lower prices.
Australian export volumes of avocados have already increased by more than 350pc in the past year, the Rabobank report says.
“The Singapore and Hong Kong markets have been stand-out performers, with Australia growing to account for 46pc and 12pc market share of their avocado imports, respectively,” Ms Piggott said.
“Malaysia remains an integral export market and has re-bounded from Covid-related impacts, with Australian exports making up 46pc of the total imported avocados into Malaysia.
“Exports to the rest of the world are also up, including to the Middle East and Japan.”
Strong export growth has continued into 2022, with Australian avocado exports of 2,800 tonnes in quarter one.
The rise of avocado consumption in Asia – as a growing middle class embraces the health aspects of the fruit – presents an ongoing opportunity for exporters worldwide, the report says.
But competition is on the rise from other exporters, such as Mexico and South America.
There are also other challenges, including significant trade barriers, with Australia currently having either limited or no access to three of the largest avocado-importing markets in Asia – Japan, China and South Korea.
“While exporting provides the greatest opportunity for Australia’s avocado industry to attract a good price and improve revenue, ensuring high export quality is paramount to maintaining the reputation and premium of the fruit, and continued investment in
improving export access remains a key priority for the Australian avocado industry,” Ms Piggott said.
The representative body for Australia’s avocado industry has urged people to stock up on the fruit, which is rich in healthy, good fats.
“Like all growers, avocado growers have also been experiencing high input costs from increases in the cost of fertiliser, fuel and labour shortages,” Avocados Australia CEO John Tyas said last month.
“Despite this, avocados are being sold at prices that are offering excellent value for shoppers at the moment.
“While households are feeling the pinch with inflation, we recommend that shoppers take advantage of the health-giving properties of avocados.”
