Just as avocados helped lift the social status of Britain’s newly affluent middle class of the 1970s, it is now beginning to rain down prestige on China’s new middle class in the same way.
It acts as a symbol of wealth, health and status and to have an avocado in your shopping trolley is becoming a must have.
As the world’s largest producer and birthplace of avocados, Mexico has traditionally traded first and foremost with the United States. As a result of recent threats made by President Trump to tear up the 1994 North American Free Trade Agreement (NAFTA), and among other reasons this may now change.
Mexicans seem untendered, instead keen to pursue a much larger, hungrier market, China. Mr. David Smith from SVA fruits Shanghai spoke with The Nanjinger and said, “We have strong partnerships directly with the growers and exporters in all three countries of origin… We source from Mexico, Chile, and Peru. [Our aim is to] offer consistent, year-round supply.” For the last 5 years Mexican avocado professionals have been hustling the Chinese market. Holding fancy events in order to promote their products, and going to great lengths to educate the Chinese people about the health benefits of the fruit.
Partly due to this, avocado imports have skyrocketed and almost doubled per annum over the last few years. Ramon Paz of the Association of Producers, Exporters and Packers of Avocados from Mexico, has recently said that Mexico exported 470 metric tons in the 2012-13 seasons and it jumped up to 11,000 tons in the 2015-16 season.
In addition to Mexico’s soaring market within China, both Chile and Peru are beginning to make waves within the industry. Both countries have the advantage of a free trade agreement with China, and although Mexico’s tariffs have just been reduced from 25 to 10 percent this year, the introduction of Peruvian Hass avocados and Chilean produce will certainly strengthen the market. “The market growing the fastest is China. It’s still not big, but it is doubling consumption every year”, Paz said.
With China’s middle class becoming aware of the versatile health benefits of avocado consumption, so have large food chains as well. This year both KFC and McDonalds have added an “avocado range” of burgers to their menus in efforts to appeal to the middle class. Avocados used for fast food chains and big restaurants in China are sourced mainly from Mexico.
Up until now buying avocados as a consumer in China has been hit and miss due to unripe and overpriced produce. Californian based Mission Avocados, recently completed construction on China’s first Ripe Center dedicated to avocados. This center will aim to allow the fruit time to ripen and sell directly to customer’s fresh and ready to eat. “What they’ve done is absolutely an important step by bringing in the right technology and trying to do it the right way, not trying to guess at it,” continued Smith. However, not all avocado sellers feel the need to sell the fruit ripe just yet, “This is something that is a work in progress and will take a lot of time and education of the retailers and consumers about the benefits of selling ripe avocados. As it is, a dark, soft, ripe, ready to eat avocado in the market is a huge risk to any wholesale distributor and they really don’t want to manage that sort of fruit, they would rather keep managing emerald green avocados that, although they aren’t ready to eat and won’t be for any predictable period of time, are much easier to manage as they have a long shelf-life,” said Smith.
Mission Avocado president Steve Bernard expressed his excitement about the opening of the center claiming it will be able to “accelerate market growth”. Located near the Yangtze River the center has 4 ripe rooms with a capacity of 80 pallets of ripening space.
“My hope is that this leads consumers to a better understanding of how and when to eat avocados. Once people know about [it] the market will certainly grow. Mission Avocados did a great job of this in the US many years ago. I suspect that if their facility gains traction, you will see a lot of companies rushing to do the same thing and investing in ripening facilities,” Smith commented.
Dramatic climate changes of El Niño last year have severely affected avocado growth in Mexico and have dragged out the dry low season longer than necessary. As a result avocado prices around the world including China have risen, almost doubling in price. All is not over in China as she immediately begins sourcing elsewhere.
Some in the industry suspect it is only a matter of time before China finds a way to produce its own avocados, citing there is plenty of space and potential (48 million hectares) in Southern China with favourable weather conditions to start planting.
Shenzhen based company Kondarl recently announced to the stock exchange that it was close to signing a deal to acquire Australia’s largest avocado farm for ¥1b. Unfortunately, Kondarl will have to wait some time due to China’s clamp down on money leaving the country. If the deal goes through this could potentially lower the cost of avocados on the market for sale in China.
