Summary
While ACP exporters have seen considerable growth in avocado exports to the EU since 2008, their market share has been undermined since the entry into force of the EU-Andean Pact Trade Agreement in 2013, with this being particularly acute on the UK market. In addition while consumer demand for avocadoes continues to grow in the EU, the rate of growth is slowing down. Nevertheless African ACP countries have considerable unexploited production and export potential, with a considerable growth in the area under avocadoes being underway. The UK governments’ decision to remove MFN tariffs and import levies on avocadoes post Brexit, will further undermine the position of all but the most competitive ACP avocado exporters on the UK market. This is likely to be compounded by the potential of Brexit to disrupt the functioning of triangular supply chains for the export of avocadoes to the UK market via EU27 member states. Policy dialogues between the governments of ACP avocado exporting countries and the EU27 and UK authorities on the administrative arrangements required to minimise customs and border clearance delays for products which enjoy duty free access to both the EU27 and UK market are needed, with this dialogue being extended to arrangements for SPS inspections along triangular supply chains.
Analysis carried on the freshfruitportal.com website suggests considerable scope exists for an expansion of African avocado production for export (1). This needs to be seen in the context of wider market analysis which suggests rapidly growing demand will give rise to supply constraints in the avocado sector in the coming years (2). Speaking at the World Avocado Congress the managing director of South African based Westfalia Fruit, Zac Bard argued many African countries ‘could greatly increase their supplies of avocados given the right conditions’, with Africa having ‘year-round seasonality on the Hass variety and “huge potential” to increase its share of international avocado markets’ (1).
After the US, the EU is the second largest global market for avocadoes taking around a 3rd of traded avocadoes (3). Analysis from the French agricultural research organization CIRAD maintains between 2002 and 2013 EU imports of avocadoes tripled (3), while the statistics on the EC Market Access Data Base show that between 2003 and 2019 extra-EU imports of avocadoes grew 5-fold (from 121,994 tonnes to 606,794 tonnes) (4).
However CIRAD maintains future growth in EU consumption of avocadoes is likely to be less dramatic than in the past, since consumption in the two main markets in the EU is seen as being ‘mature’, with per capita consumption now levelling off. Consumption trends in Scandinavian countries suggest there is currently a plateau for per capita avocado consumption of around 2.5 kg per annum. This being stated, beyond the ‘mature’ markets of France and the UK, rapid growth in consumption is still underway in Germany, Eastern Europe and Italy (3).
Main EU Importers of Avocado: Trends in Exports to the EU (0804400010)
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | % EU | |
| Total EU | 191,631 | 208,353 | 186,211 | 216,789 | 251,598 | 305,324 | 343,519 | 446,988 | 486,144 | 606,794 | |
| Netherlands | 72,839 | 83,600 | 80,543 | 103,596 | 125,012 | 148,019 | 160,311 | 218,836 | 238,312 | 317,375 | 52.3% |
| Spain | 27,081 | 28,927 | 27,319 | 29,948 | 36,806 | 47,506 | 54,633 | 78,857 | 85,845 | 107,155 | 17.7% |
| UK | 23,413 | 22,536 | 19,584 | 26,751 | 30,690 | 36,747 | 52,881 | 67,377 | 73,463 | 84,410 | 13.9% |
| France | 45,816 | 46,592 | 43,289 | 50,923 | 50,107 | 62,729 | 63,148 | 66,149 | 71,036 | 74,739 | 12.3% |
| Belgium | 1,055 | 1,451 | 791 | 1,342 | 2,971 | 4,499 | 4,822 | 8,054 | 7,246 | 11,522 | 1.9% |
Sources: EC MADB
While France and the UK are the main markets for the consumption of avocadoes the main point of entry for extra-EU avocado imports is the Netherlands, which in 2018 accounted for fully 52% of extra-EU avocado imports. The Netherlands is a major distribution centre for avocadoes. While this is focused largely on onward shipment to mainland EU countries there is also an onward trade to the UK (5). This will be a potentially significant issue in the event of a no deal Brexit.
In Africa production growth potential is centred around the Great Rift Valley and in Southern Africa. Currently South Africa has a total ‘total avocado surface area of around 18,000 hectares, with an additional 2,000-2,500 hectares expected to be planted annually’ (1). On the basis of this production in 2018 South Africa was the second largest avocado exporter to the EU market by volume (83,459 tonnes) and the 3rd largest by value behind Peru and Chile (which respectively accounted for 35% and 13.4% of EU imports by value). Of these South African exports to the EU28, 22% went directly to the UK, with it being unclear if there was any onward trade in avocadoes to the UK via the Netherlands.
Kenya is also a long established avocado producer and exporter, with a yield of around 80,000 tonnes from some 7,400 ha of production. The area under avocadoes in Kenya is expected to increase by around 1,600 ha per annum in the coming years. In 2018 Kenya exported some 41,701 tonnes of avocadoes to the EU28 market, with only some 3% of these going directly to the UK. The bulk of Kenyan avocado exports, some 58%, were shipped to the Netherlands (with a further 5.3% being landed in Belgium) from where they are forwarded to the final customers across Europe.
However Kenya, as in many African countries, faces the absence of a strong grower organisation, with only 1 large commercial grower and a host of small scale producers. This producer organization constraint is seen as an urgent area where action is needed, if the quality and reliability of supply which is seen as essential to successful avocado exports is to be attained.
Tanzania meanwhile exported some 6,269 tonnes of avocadoes to the EU in 2018, making Tanzania the 3rd largest ACP exporter, slightly ahead of the Dominican Republic (4). The area under avocado production in Tanzania is expected to increase 40% annually in the coming years (1).
Meanwhile Zimbabwe, despite its political instability, exports around 5,000 tonnes annually, from 1,000 ha under commercial production, with a 10% annual expansion in the area under avocadoes expected (1).
Main Avocado (08044000) Exporters to the EU and UK (tonnes) 2018
| EU28 | UK | |||||||||
| Volume (T) | Value
(€) |
% share EU Value | Volume
(T) |
Value
(€) |
% share (Value) | Share UK EU28
(Volume) |
||||
| Total | 606,794 | 1,079,177,309 | 84,410 | 159,334,793 | ||||||
| ACP – Africa | 20.55% | 18,196 | 27,826,122 | 17.47% | 22% | |||||
| South Africa | 83,459 | 127,176,411 | 11.8% | 1,239 | 1,845,988 | 1.16% | 3% | |||
| Kenya | 41,701 | 66,263,182 | 6.1% | 1,239 | 1,845,988 | 1.1% | 3% | |||
| Dom Rep | 6,258 | 10,860,062 | 1.0% | 971 | 1,436,976 | 0.90% | 16% | |||
| Tanzania | 6,269 | 10,147,470 | 0.9% | 718 | 1,137,296 | 0.72% | 11% | |||
| Zimbabwe | 4,173 | 5,745,479 | 0.5% | 542 | 694,618 | 0.43% | 13% | |||
| Uganda | 315 | 560,412 | 0.05% | 98 | 191,523 | 0.12% | 31% | |||
| Eswatini | 285 | 469,208 | 0.04% | 141 | 243,896 | 0.15% | 49% | |||
| Mozambique | 168 | 312,914 | 0.03% | 39 | 50,480 | 0.03% | 23% | |||
| Jamaica | 8 | 18,644 | 0.0002% | 8 | 18,644 | 0.01% | 100% | |||
| Ethiopia | 33 | 56,867 | 0.005% | 2 | 12,336 | 0.008% | 6% | |||
| Rwanda | 2 | 2,798 | 0.002% | 8% | ||||||
| Cameroon | 22 | 21,603 | 0.002% | 0 | 0 | 0 | 0 | |||
| Ivory Coast | 21 | 17,182 | 0.001% | 0 | 0 | 0 | 0 | |||
| Zambia | 5 | 10,871 | 0.001% | 0 | 0 | 0 | 0 | |||
| Dominica | 2 | 3,057 | 0.0003% | 0 | 0 | 0 | 0 | |||
| Togo | 1 | 1,657 | 0.0002% | 0 | 0 | 0 | 0 | |||
Sources: EC MADB
Both Uganda and Eswatini have a small but growing volume of avocado exports to the EU (315 tonnes and 285 tonnes respectively in 2018), with both countries having a high dependence on the UK market in their trade with the EU (31% and 49% respectively).
Since 2015 5 new ACP avocado exporters have emerged serving the EU market, with by 2018 these 5 new exporters taken together exporting 228 tonnes to the EU market (Mozambique, Ethiopia, Ivory Coast, Zambia and Togo). Beyond these countries Angola and Malawi are also seen as having export potential in the avocado sector.
Beyond Africa the Dominican Republic is a major avocado producer but with its main focus on the US market, which took some 55.4% of total avocado exports over the 2014-17 period, with a further 11.4% going to the Puerto Rican market (6). In 2018 this saw the Dominican Republic export only some 6,269 tonnes of avocadoes to the EU28 market, of which 15.5% by volume were directly exported to the UK market. Nevertheless since 2013 Dominican avocado exports to the EU28 have grown 165%, with a 139% increase in exports to the UK over the corresponding period, despite a dramatic decline in exports to the UK in between 2017 and 2018 (-35%).
Jamaica meanwhile had been growing its exports to the EU dramatically from a small base (a more than 6-fold increase), but these fell back dramatically in 2018 (- 82%), to a mere 8 tonnes. This trade was exclusively focussed on the UK market.
Dominica meanwhile from exporting some 193 tonnes to the EU in 2010 has virtually disappeared from the EU market, exporting only 2 tonnes in 2018.
Trends in Exports to the EU Avocadoes (08044000) – tonnes
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Total EU | 191,631 | 208,353 | 186,211 | 216,789 | 251,598 | 305,324 | 343,519 | 446,988 | 486,144 | 606,794 |
| South Africa | 38,393 | 47,319 | 26,896 | 48,442 | 44,069 | 56,850 | 49,565 | 52,437 | 41,607 | 83,459 |
| Kenya | 15,048 | 14,135 | 15,102 | 17,075 | 13,308 | 15,862 | 20,726 | 23,741 | 25,390 | 41,701 |
| Tanzania | 6 | 21 | 6 | 133 | 967 | 1,641 | 3,278 | 3,036 | 3,042 | 6,269 |
| Zimbabwe | 114 | 110 | 145 | 489 | 676 | 1,120 | 1,251 | 1,517 | 2,126 | 4,173 |
| Uganda | 76 | 72 | 49 | 196 | 130 | 193 | 207 | 263 | 257 | 315 |
| Eswatini | 313 | 404 | 366 | 218 | 415 | 327 | 140 | 330 | 208 | 285 |
| Mozambique | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 56 | 168 |
| Ethiopia | 0 | 0 | 0 | 0 | 0 | 0 | 3 | 11 | 14 | 33 |
| Cameroon | 11 | 22 | 21 | 81 | 17 | 12 | 17 | 14 | 16 | 22 |
| Ivory Coast | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 21 |
| Zambia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5 |
| Togo | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Dom Rep | 2,438 | 3,435 | 2,831 | 1,577 | 2,359 | 2,647 | 3,691 | 6,236 | 6,993 | 6,258 |
| Jamaica | 6 | 16 | 12 | 7 | 7 | 12 | 23 | 10 | 45 | 8 |
| Dominica | 139 | 193 | 105 | 57 | 69 | 82 | 132 | 82 | 51 | 2 |
| Total | 56,544 | 65,725 | 45,533 | 68,276 | 62,020 | 78,746 | 79,039 | 87,677 | 79,824 | 142,746 |
| 29.5% | 31.5 | 24.5% | 31.5% | 24.7% | 25.8% | 23.0% | 19.6% | 16.4% | 23.5% |
Sources: EC MADB
Overall since 2011 ACP exports of avocadoes to the EU27 market tripled (from 45,533 tonnes to 142,746) while exports to the UK market substantially more than tripled (from 6,458 tonnes to 21,958 tonnes).
However this being noted ACP exporters have been losing market share on both the EU27 market and the UK market since 2012. This appears to be closely linked to the conclusion of the EU-Andean Pact Agreement. In the case of Peru, the leading avocado exporter to the EU28, this agreement entered into effect in March 2013. Between 2012 and 2018 Peruvian avocado exports to the EU28 increase 266% (from 62,620 tonnes to 229,406 tonnes), while Colombia emerged as a large exporter. Within this trade Peruvian exports to the UK increase more than 6 fold, while Colombia emerged as a supplier for the first time, taking fully 6% of the UK market (4).
Trends in Exports to the UK Avocadoes (08044000) – tonnes
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Total UK | 23,413 | 22,536 | 19,584 | 26,751 | 30,690 | 36,747 | 52,881 | 67,377 | 73,463 | 84,410 |
| South Africa | 8,471 | 8,147 | 5,332 | 9,092 | 10,346 | 10,781 | 10,334 | 10,464 | 10,022 | 18,196 |
| Kenya | 1,110 | 995 | 613 | 1,049 | 542 | 558 | 664 | 898 | 997 | 1,239 |
| Tanzania | 6 | 21 | 6 | 133 | 231 | 320 | 566 | 354 | 466 | 718 |
| Zimbabwe | 0 | 0 | 0 | 0 | 0 | 0 | 245 | 214 | 88 | 542 |
| Uganda | 3 | 28 | 4 | 139 | 57 | 95 | 88 | 73 | 40 | 98 |
| Eswatini | 313 | 297 | 280 | 195 | 244 | 203 | 140 | 201 | 102 | 141 |
| Mozambique | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 39 |
| Ethiopia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 |
| Cameroon | 0 | 0 | 0 | 65 | 0 | 0 | 0 | 0 | 0 | 0 |
| Ivory Coast | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zambia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 |
| Togo | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Dom Rep | 507 | 684 | 211 | 140 | 406 | 507 | 872 | 838 | 1,495 | 971 |
| Jamaica | 6 | 16 | 12 | 7 | 7 | 12 | 23 | 10 | 45 | 8 |
| Dominica | 0 | 0 | 0 | 0 | 0 | 0 | 3 | 0 | 0 | 0 |
| Total | 10,416 | 10,188 | 6,458 | 10,820 | 11,625 | 12,476 | 12,935 | 13,052 | 13,255 | 21,956 |
| 44.5% | 45.2% | 33.0% | 40.4% | 37.9% | 34.0% | 24.5% | 19.4% | 18.0% | 26.0% |
Sources: EC MADB
This saw the average share of the EU avocado market accounted for by imports from ACP countries fall from an annual average of 28.3% over the 2009-13 period to 21.3% over the 2014-18 period. This decline in ACP market share was even more pronounced in the case of the UK market. Between 2009 and 2013 direct ACP avocado exports to the UK accounted for 40.2% of UK imports while between 2014 and 2018 they accounted for only 23.4%. However this may have been linked to the move to full cost recovery for SPS inspections carried out on imports from 3rd countries by the UK SPS border control services, which saw a consolidation of exports to the UK with exports to other EU markets via the Netherlands.
In addition, commercial avocado production in the EU is expanding. Málaga in Spain is an avocado production hub, with the crop spreading along the Mediterranean coast, to include production area in Portugal (centred on Talavira) but extending into Italy and Greece (8). The season in the main production zones in the EU runs from November until May (9).
| Comment and Analysis
CIRAD see’s quality issues as a key issue in the avocado market, since ‘avocados remain an expensive fruit’, with in addition promotional activities across markets being seen as critical ‘to break the roof of 2.5 kilograms’ per capita consumption which appears to exist in Europe. However for ACP countries an important issue would appear to be the impact which a no-deal Brexit could have on ACP exports given the importance of the UK market to many ACP exporters. This raises two important short term issues: · the future trajectory of the UK’s MFN tariff on avocadoes, where the UK’s October announced no-deal Brexit tariff schedule set the tariff on avocado imports at zero, with no entry price system being applied; · the impact of the UK’s decision to withdraw from the EU customs union on the functioning of triangular supply chains, through which the EU market is served via ports of initial landing in the Netherlands and Belgium (a particularly important issue for Kenya). The MFN issue needs to be seen in the context of the declining ACP market share which has emerged following the implementation of the EU-Andean Pact trade agreement. Prior to the entry into force of this agreement the EU imposed an import duty of between 4% and 5.10%, with an entry price system in operation which applies and minimum entry price of €335.70/100 kg. This decline in the ACP market share has occurred despite the rapid growth in ACP avocado exports to the EU market which has been underway. This experience highlights the critical importance of the UK’s future no-deal Brexit MFN tariff for avocado imports in a context where the access for some leading avocado producers to the EU market is restricted to MFN terms (including the USA, Australia and potential exporters such as Brazil and India). Under the revised UK no-deal Brexit MFN tariff schedule announced in October 2019 import tariffs for avocadoes were not only reduced to zero, removing the seasonably variable 4% to 5.1% MFN tariff, but also the EU’s entry price system (EPS) for imports of avocadoes was abandoned. This ‘EPS works by adding surcharges to the normal tariff whenever the import price is detected to be below a defined level of entry price’ (7). While the removal of the import duty will increase competition from all non-ACP suppliers on the UK market, the removal of the entry price system will potentially undercut the commercial position of ACP avocado exporters serving the lower price components of the UK market, via low cost supermarket chains such as Lidl and Aldi. Individual ACP exporters will need to look at how their avocado supply chains function to assess their vulnerability to the removal of both the existing tariff preferences on the UK market and the elimination of entry price system. In addition the potential border clearance and associated transportation disruptions a no-deal Brexit will give rise to could severely disrupt the functioning of avocado supply chains serving the UK market via initial European ports of landing in the Netherlands, Belgium and France. This could add costs and reduce the value of exports serving the UK market along these triangular supply chains. Kenyan avocado exporters whose main shipping routes serve EU27 ports would appear to be the most vulnerable to such disruptions. This suggests an urgent need for policy discussions with both the EU27 and UK on the arrangements required to minimise customs and border clearance delays for the onward shipment of products which enjoy duty free access to both the EU27 and UK market. This dialogue will also need to extend to addressing the SPS inspection issues which will arise along triangular supply chains once the UK is no longer part of the EU customs union and single market. This will initially require a commitment from the concerned EU27 member states SPS inspection services to continue to carry out SPS inspections on goods routed through their territory whose final destination is the UK. It will also require a parallel commitment from the UK authorities to recognising EU issued SPS clearance documents for goods entering the UK. Appropriate financial arrangements will also need to be set in place to fully cover the SPS inspection costs for goods ultimately destined for the UK. Given the importance of quality issues in the avocado sector, a further issue which is likely to be particularly acute for ACP exporters serving the UK market along triangular supply chains will be the shortage and rising cost of cold storage space in the UK. ACP exporters may find the extra storage costs arising from current space shortages financially unsustainable in the context of other rising costs of exporting along triangular supply chains. However the option of moving over to direct exports to the UK may be seriously constrained by the problems faced in securing the necessary access to cold storage facilities (see companion epamonitoring.net article ‘Shortages of Cold Storage Space Linked to Brexit Stockpiling Could Disrupt Some ACP Chilled and Frozen Exports’, 26 November 2018). Beyond these short term issues, the issue of the UK’s future SPS control regime arises. Particularly under a ‘no-deal Brexit’ scenario the UK government will come under intense pressure from major trade partners such as the US to move away from what are seen as needlessly restrictive EU SPS controls. Indeed this issue likely to be a cornerstone of any US-UK trade negotiations (see companion epamonitoring.net article, ‘SPS and Food Safety Issues Likely to be Central to US/UK Trade Negotiations’, 25 July 2019). In this context if the UK government makes the decision to move away from existing EU systems of Phytosanitary controls, which are based on pan-European agro-climatic conditions and concerns, towards a system of Phytosanitary controls which reflects solely agro-climatic conditions and concerns in the UK, then market opportunities will continue to exist in the UK which are currently being closed down by the EU’s increasingly strict application of its new Plant Health Regulation. This regulation is significantly increasing the administrative burden for ACP exporters in regard to verifying compliance with EU Phytosanitary regulations. This could potentially drive smaller scale ACP producers and exporters out of the EU market, not because of any change in the underlying phytosanitary hazard but because of their inability to comply with increasingly burdensome administrative requirements. Since given the agro-climatic conditions in the UK the level of Phytosanitary threat posed is different to the level of threat posed across the EU as a whole, once the UK is no longer part of the EU customs union and single market, there will be no underlying necessity to apply Phytosanitary regulations based primarily on concerns of Southern European agricultural producers. Against this background it would appear important that ACP governments include in any ‘UK-Only’ Continuity Agreements a clear commitment and institutional mechanism for reviewing the application of UK SPS controls to ACP agricultural exports once the UK is no longer part of the EU customs union and single market. |
Sources
(1) freshfruitportal.com, ‘African avocado production ‘could rise as quickly as Colombia’s’, 14 October 2019
https://www.freshfruitportal.com/news/2019/10/14/african-avocado-production-could-rise-as-quickly-as-colombias
(2)frewhplaza.com, ‘Biggest problem facing avocado sector in coming years will be supply, not demand’, 26 September 2019
https://www.freshplaza.com/article/9147603/biggest-problem-facing-avocado-sector-in-coming-years-will-be-supply-not-demand
(3) freshfruitportal.com, ‘ European avocado consumption growth could slow, expert warns’, 17 October 2019
https://www.freshfruitportal.com/news/2019/10/17/european-avocado-consumption-growth-likely-to-slow-expert-warns/
(4) EC, EC Market Access Data Base
https://madb.europa.eu/madb/statistical_form.htm
(5) CBI, ‘Exporting fresh avocados to Europe’, 24th October 2018
https://www.cbi.eu/market-information/fresh-fruit-vegetables/avocados/europe/
(6) eldinero.com.do, ‘The Dominican avocado positions itself abroad’, 31 January 2019
https://www.freshplaza.com/article/9067207/the-dominican-avocado-positions-itself-abroad/
(7) europarl.eu, ‘The EU Fruit and Vegetable Sector: Overview and Post 2013 CAP perspective’, 2011
http://www.europarl.europa.eu/RegData/etudes/etudes/join/2011/460043/IPOL-AGRI_ET%282011%29460043_EN.pdf
(8) freshplaza.com, ‘Avocado cultivation spreads to southern European countries’, 13 May 2019
https://www.freshplaza.com/article/9102498/avocado-cultivation-spreads-to-southern-european-countries/
(9) freshplaza.com, ‘Spain’s largest avocado and mango producers focused on boosting domestic consumption’, 31 May 2019
https://www.freshplaza.com/article/9110072/spain-s-largest-avocado-and-mango-producer-focused-on-boosting-domestic-consumption/