The domestic avocado industry has grown significantly from the early 1970s, with plantings of around 2 000 hectares in 1970 increasing to the current 17 500 hectares in 2018, majority of which are situated in the north-eastern part of the country in Limpopo and Mpumalanga provinces. Avocados are also grown commercially in certain areas of KwaZulu-Natal, the Eastern Cape, and Western Cape. It is estimated that new plantings amount to approximately 1 000 hectares per annum, thus according to the South African Avocado Growers’ Association (SAAGA).
In 2018, total avocado production was estimated at 170 000 tons of which over half (86 000 tons) was exported, mainly to Europe and the United Kingdom (UK). The remainder of the crop was consumed domestically and approximately 10% is processed into among others oil and purée.
Total plantings and production have increased lately due to growing consumer demand for avocados both locally and internationally. Globally, consumers have increasingly become health conscious and avocados are considered a superfood with a high content of vitamin E, iron, potassium, and niacin. However, it is reported that restaurants in the UK are reportedly ditching avocados on ethical grounds. They claim that the water-intensive fruit is harming farmers and land in regions such as South America where the fruit is commercially grown.
Data from the International Trade Centre (ITC) indicates that in 2018 South Africa exported 89 343 tons of avocados (fresh or dried) to the value of over R1.5 billion, up by 105.4% compared to 2017. Some of the major importers of South Africa’s avocados in 2018 included the Netherlands (67.5%), the UK (20.0%), Spain (4.2%) and Portugal (1.6%), amongst others (see Figure below)
Given that South Africa exports about 20.0% (down from 21.8% in 2017) of avocados to the UK, the latest developments of ditching avocados on an ethical grounds should remain a great concern to the domestic industry. A reduction in demand for avocados in the UK could have a negative impact on South Africa’s avocado industry. At this stage, it is still unclear how other markets in the European Union (EU) will react to the environmental concerns around avocado production globally.
Source: Own calculation based on ITC data
The domestic avocado industry should start looking at other potential export markets in the event that demand from the UK decreases as a result of the reason mentioned above. South Africa can potentially take advantage of the BRICS forum to negotiate for market access to China.
Reports indicate that China’s demand for avocados has been significantly increasing in the past few years fuelled by the rising middle class and changing dietary patterns. Driven by an interest in its health benefits, avocado is growing in popularity in China, from a largely unknown product less than a decade ago to be a popular option in Chinese supermarkets today.
Data shows that China’s imports increased at an average of 417.5% between 2010 and 2018, from around 2 tons in 2010 to 43 859 tons in 2018. China’s imports in 2018 were mostly from Peru (38.4%), Mexico (34.1%) and Chile (27.1%). Therefore, China among others could potentially be a future market for South Africa’s avocado exports, although barriers must be overcome to get avocadoes from South African farms to Chinese tables.
Tebogo Mashabela is an Agricultural Economist by profession with two Master’s degrees, Master of Science (MSc) Agricultural Economics and Master of Business Admiration (MBA)