A bumper season across Australia’s key avocado growing regions has producers worried prices could drop to record low levels.
- Avocado growers are concerned increased production will put further downward pressure on prices
- The result will be good news for consumers but not for producers
- Increased plantings will mean the oversupply will be an ongoing issue
The largest production region is in Queensland, where the price of Hass avocados has plummeted to just $12 per tray farm price.
Earlier this month, peak industry body Avocados Australia’s online retail pricing report has listed the price of an avocado at about $1 each in major supermarket chains across the country.
Growers are concerned prices could dip even lower, amid projections a further 8.2 million trays will be picked in WA this summer, amounting to a 233 per cent increase in production on last year.
Consumers the winner
Avocados Australia CEO John Tyas said the massive national crop would bring quality and cheap produce for consumers but tough times for growers.
“Conditions have been really good all around the country, so all of the regions have got really good crops … and volumes are just going to continue to rise right across the year.
“In addition to that, we’ve got a lot of new plantings, so there’s probably about half of the orchards around the country are yet to reach full production.
“This isn’t an issue just this year, it’s going to be an ongoing issue with ongoing supply.”
‘Green bubble’ burst
Dennis Howe is one of Australia’s largest independent avocado growers, based on Far North Queensland’s Atherton Tableland.
Mr Howe’s is focused on Shepard avocado production, which he said had not been hit as hard as the Hass variety.
But he said the so-called ‘green bubble’ enjoyed by the broader avocado industry in recent years could soon burst.
“We all knew it was going to come. We hoped it wouldn’t come this year, but with the way plantings and production has increased, it was always going to happen,” he said.
“Once you’ve got a tree crop in oversupply, it’s very hard for production to drop away.
“There’s going to be more export, but we’re competing against the lower-cost producers in the world such as Central America, Mexico and South Africa.
Manjimup avocado grower Vic Grozotis, based 300 kilometres south of Perth in the WA’s South West, said growers were up against a “perfect storm” of factors.
“We have an oversupply in the whole of Australia, a lack of labour, the supermarkets are looking at importing fruit from New Zealand and we have a difficult export market because of our cost structures,” he said.
“On top of that, we’ve got COVID-19 is overriding the whole industry because there’s a smaller consumption pool until we get people out in coffee shops and eating avocado, there’s going to be some significant challenges.”
Export markets key
Mr Tyas said the industry was working hard to open up new export markets to alleviate the pressures caused by the current supply glut.
“WA got access to Japan for the first time a few years ago, and we’re expecting there’ll be some significant volumes of fruit going there from WA,” he said.
“There’s also Singapore, Hong Kong, Malaysia, Indonesia and other markets.
“The other one that we don’t have access to but is currently under negotiation between governments is access to India and maybe China one day, although we seem to be a long way off accessing that market.”