During the 1980s, although total world production of the fruit barely changed, the volume of avocados traded on the world market expanded dramatically. According to FAO figures, world exports totalling 70,027 tonnes (valued at US$84.7 million) in 1982 had risen to 110,034 tonnes (worth US$ 131 million) by 1989, this latter actually representing a small drop from the peak year of 1987. World imports rose from 66,942 tonnes (US$ 88.8 million) to 127,092 tonnes (about US$ 182 million) over the same period. The discrepancies between the import and export figures, which theoretically should be equal, are due to the different time frames in which the data are collected (calendar years are, of course, very arbitrary units where agricultural activities are concerned) as well as to inadequacies in their recording.

The growth in the world avocado market in recent years has been part of a strong expansion in international trade in fresh tropical fruits in general. This expansion has occurred despite relatively high consumer prices, especially in the luxury market in the developed countries of north America, Europe and Japan. The main features 'in the steady expansion of this trade have been identified by the FAD Commodities and Trade Division (The world market for tropical horticultural products, Rome, 1988) as

(i) an increasing interest in new tastes and innovative varieties of foodstuffs;

(ii) increasing consumer familiarity with tropical products consequent upon greater overseas travel and promotional activities by producers;

(iii) increasing numbers of sales outlets outside the specialised fruit trade of metropolitan areas; and

(iv) the important role of the restaurant trade and of immigrant populations in creating new markets.

Technical factors, such as improved air and sea transport and advances in technology that permit longer storage life and reduced wastage, have also contributed to the trade growth.

More significant even than the rapid expansion in the world market as a whole, however, is the pattern of that growth. The analysis of the location of the principal producers and consumers undertaken in this short paper provides useful clues to potential markets for Australian producers and suggests where promotional activities could well be directed. It is possible to divide the world market for avocados into three market segments and three geographical import export regions.

The market segments, which were recognised by the FAO report, are:

(i) regional exchange between developing countries in the tropical and sub-tropical zones, mainly to meet shortfalls in traditional avocado-consuming areas;

(ii) the North American market, where the U.S.A. is at the same time producer, exporter and importer; and

(iii) the luxury market in other developed countries of western Europe and Asia (notably Japan, Hong Kong and Singapore).

These three market segments have different requirements with regard to presentation, packaging, mode of transport, distribution and promotion which are reflected in the prices than can be realised in the various outlets. The highest standards of quality, presentation and promotion are required for the premium markets of the developed countries which are, of course, the most lucrative for the producer.

The geographical import/export regions can be identified as:

(i) Europe-Africa, where the Mediterranean producers (Israel, Spain) and South Africa supply the major markets of western Europe (market segment (iii);

(ii) the western hemisphere, where traditional producers (e.g. Guatemala, Mexico) trade locally (market segment (i)) and also supply the developed country markets of the U.S.A. and Canada (market segment iii)); and

(iii) the eastern hemisphere (Asia - Australasia) where New Zealand is the only significant exporter, and Japan the one principal market market segment (iii)). Local, mainly internal, trade is significant in Indonesia and the Philippines.

The Europe-Africa geographical region is by far the largest avocado trading area and has grown fast during the 1980s. In 1989, France and the United Kingdom alone were responsible for absorbing 61% of the total world imports, and other European countries (Austria, Belgium, Luxembourg, Denmark, Finland, Germany, Greece, Ireland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland) took a further 18%. Spain, Israel and South Africa met about 68% of this European demand, leaving a substantial share of the market to be supplied from elsewhere, almost entirely the western hemisphere. The demand for avocados in Europe between 1982 and 1989 had expanded at an annual rate of a little over 8% (from 58,392 to 100,613 tonnes) whilst exports from its 'local' suppliers had grown at only 4% per annum, largely due to a halving of Israeli production, though Spain emerged as a major exporter and South Africa increased its shipments threefold.

The western hemisphere, as befits the region where the fruit originated, was responsible for 78% of recorded world avocado production in 1989, but contributed only 28% of the total volume exported onto the world market. This is due, of course, to the extensive domestic consumption within the region, a fact that can be illustrated by the case of Brazil which exported only 0.3% (351 tonnes) of its large production of 113,000 tonnes. Only six countries in the western hemisphere, Chile, Dominican Republic, Guatemala, Martinique, Mexico, and U.S.A., had exports in excess of 1000 tonnes each in 1989 and a substantial proportion of this trade was with neighbouring countries such as Costa Rica, El Salvador and Honduras. Nevertheless, western hemisphere exports were 50% greater than their imports, thus providing a substantial surplus to help meet European demands.

Compared with Europe-Africa and the western hemisphere, both production of and trade in avocados in the eastern hemisphere are small. Recorded production represents only 6.6% of the world total, of which Indonesia and the Philippines alone are responsible for 95%. Neither of these countries is, at present, an exporter except in the most minor way. Indeed the only exporter of any significance in the region is New Zealand, which shipped 1086 tonnes in 1989. Australia and Japan are the main importing markets. Regional demand in 1989 exceeded regional exports by about 3,000 tonnes. In fact only 28% of the regional demand appears to have been met by eastern hemisphere producers - the balance, as in the European market, presumably originating from the western hemisphere.

A number of facts of relevance to Australian producers can be adduced from this basic analysis. The most apparent is the very limited development of the commercial market in the eastern hemisphere, Australia's 'natural' outlet. Japan, the largest importer, absorbed 2,694 tonnes in 1989, Hong Kong, 249 tonnes and Singapore, only 82 tonnes. Amongst other potential markets, Korea imported only 20 tonnes and Taiwan apparently none. Despite the small size of this market, however, its imports increased at an annual rate of 18% between 1982 and 1989, with by far the major growth occurring in Japan, whose imports grew by 19% per annum over the period. There is no reason to suppose that market saturation in Japan and Hong Kong was achieved by 1989, while the Singaporean, Korean and Taiwanese markets seem likely targets for promotion and development. Even the Australian domestic market, which imported 1,257 tonnes in 1989, offers considerable potential for local growers.

The Department of Trades 1984 mission to Southeast Asia (Report of the Australian Fresh Tropical Fruit and Vegetables Survey Mission to Southeast Asia, May-June 1984, AGPS, Canberra, 1984) reported that, although Australian produce was established in varying degrees in the Singapore, Malaysian and Hong Kong markets, it was apparent that in many cases there were opportunities for exports to be increased. This would seem to be the case for avocados. Given that:

(i) a product meeting the market requirements can be delivered in the best possible condition and on time,

(ii) packaging is able adequately to protect fruit during the rough manual handling it is likely to receive, and

(iii) reliable delivery can be assured, the potential for the Australian avocado producer to develop the regional market clearly exists. Competition at present is mainly from outside the eastern hemisphere, particularly from the Americas.

Only New Zealand appears as a regional competitor at present, though Indonesia and the Philippines clearly have the production (potential) to move into the export market if, or when, their avocado industries achieve the degree of commercialisation they already possess in pineapple and banana marketing.

Philip Courtenay,
James Cook University, Cairns Campus

DATE: March 1991

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