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Avocados no longer ‘green gold’: Drought, rising costs and increased international competition hurt farmers

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“It’s true that avocados and mangoes used to be star products, but we’re seeing that that’s no longer the case. It is not because we have difficulties with water, infrastructure and there are no products from other countries. controlled”. Antonio Rodríguez, Secretary General of the Coordinator of Farmers and Farmers’ Organizations (COAG) of Malaga, summarizes the problems that producers will face in the 2022 campaign. The year is primarily characterized by a drought that has hit Malaga in La Axarquia, which is concentrated. A large part of the territory in Spain is devoted to the production of this fruit, more typical of other latitudes.

“They started planting them about 40 years ago. It seemed that in La Axarcia, due to the growing tropical climate, there were varieties that did quite well,” explains Antonio Rodríguez. Since then, more deeply rooted products such as traditional olive groves, rain-fed almond trees or raisins have fallen by the wayside. Some of them are long-term products that require a lot of work. “We’ve entered a different dynamic and it’s hitting us,” admits COAG Málaga’s general secretary.

Andalucia is the main one. It accounts for almost 90% of Spanish production of both avocados and mangoes, adding to the impact in a bad year. The latest data on avocado plantations published by the Ministry of Agriculture indicates a total area of ​​14,063 hectares at the end of 2019. Of these, 11,162 were in Andalusia, another 1,866 in the Canary Islands and almost 1,000 hectares in the Community of Valencia. From the handle it does not tamper with the data.

“A large supply of fruit on the European market, a loss of purchasing power and reduced demand due to international tensions have had a negative impact on origin prices,” said a report published in October by the Prices and Observatory. Junta Markets of Andalusia.

“The average price of avocados was €1.89/kg, which is well below the level of the last campaign.” He adds that according to his records, “for the first time since the 2014/15 campaign, the final price of avocados is below €2.00/kg. In relative terms, this is a 20% drop from the average price. 2016/2020 period (2.36 EUR/kg)”. A situation that affects all breeds, according to the observatory.

“Since the start of the campaign, the European market has been influenced by high-quality products of various origins, which have been intersecting for months. In addition to the volume corresponding to a year of abundant production, for example, Chile is added to the continuous growth of the cultivation areas of countries such as Colombia, Kenya, Morocco, Israel or South Africa,” the aforementioned report lists. “With demand more focused on price than quality, the presence of multiple origins of varying quality and small sizes created market distortions that pushed prices down.”

“Andalucian production was affected by the summer heat and strong winds, which affected the quality and size of the fruit,” he adds. And many fruits were simply left unpicked. “In general, production was very slow throughout the campaign, with early fruit set on the tree. “Some farmers chose to keep the product while waiting for the market situation to change, leaving a lot of neglected fruit at the end of the campaign, especially the late varieties,” concludes the Andalusian government-dependent agency.

This situation with avocados goes parallel to what happened with mangoes. The reason is that many producers grow both products at the same time, explains Francisco Moscoso, secretary general of the Union of Small Farmers and Farmers (UPA) in Malaga. He claims that producers, in the case of mangoes, were faced with two options. “Either we will sell at lower prices or we will leave them on the tree. The harvest was very bad and sold for less than what it cost to produce them,” he laments.

To cover the costs, the farmers’ representatives demand that the government “give content to the law of the chain approved months ago, which does not allow to sell products below the cost and to make contracts in writing. “They have to do research to see how much each product costs to produce,” says the person in charge of UPA Malaga. “Additionally, there are products coming in from abroad, that they are giving us unfair competition, from Brazil and Mexico; They don’t have the same texture,” says Antonio Rodríguez of COAG Málaga. “The chain law does not work at all. In order for it to work, there should be reference prices and it should be included in the contracts. And it should be controlled,” he emphasizes.

Representatives of farmers, as well as in other branches of the industry, claim that they do not cover the costs this year, besides, in the case of these tropical fruits, dehydration is added. “The La Vinuela reservoir, which irrigates the region, broke in early October. It is irrigated with produced water, private wells and tanks,” says Francisco Moscoso. “In these years, production is increasing and the administration has responsibility. Each has its share. Water planning had to be done. If I have 10 hectares of water, I can only use one hectare on this water. good before “, he laments.

As for mangoes, the Andalusian junta has no published data for the current year. The last report corresponds to 2021 and also indicates a drop in prices. “Andalusia’s mango area is increasing every year. In 2021, 4,800 hectares were planted, of which 91% are in production. 90% of the area is concentrated in the province of Malaga,” he says. The rest mainly corresponds to Granada, 9% of the cultivated area. “The cost of production is down compared to the previous campaign, due to a 26% drop in the cost of origin,” he explains.

In recent years, tropical fruits have become a magnet for investors who see them as raw materials from which to generate profitability. And there the avocado shined above the rest. “An avocado farm (in full production) can exceed €120,000 per hectare,” said the Agribusiness in the Iberian Peninsula report, published by consultancy firm CBRE. This indicates that the average profitability per ton and per hectare can reach 12% to 14% per year.

The promise of results and the increase in demand, which increased the production of avocados in countries where, like Spain, it was not native crops.

This increased demand can be seen, for example, in a Texas A&M University study collected by Reuters. According to this analysis, the United States imports $4,000 million worth of Mexican Hass avocados (most produced in Spain) a year, up from $2,500 million two years ago. Mexico is the world’s largest producer of avocados and has come under increasing criticism in recent months because of the high water consumption required for its production and because avocado plantations have become the target of drug cartels. .

There is an appetite and other countries have started production. For example, Australia and New Zealand. “A bumper crop of avocados in Australia has led to an oversupply, putting significant pressure on prices,” Rabobank said in an analysis. “At the same time, there were problems in supply chains,” which distorted international trade in the product.

This financial entity is in this case focused on these two Antipodean markets, but the situation is not very different from that of Spain. “The industry must prepare for turbulent times and deal with increasing challenges. This requires planning by producers in managing their capital and responsible management of financing by investors.” In addition, in another analysis, Rabobank also points to an “oversupply” in the European avocado market, which is not offset by growing demand in the United States.

Faced with this oversupply, La Axarquia growers are demanding that Spanish consumers buy local. “It’s not just the quality that’s better, it’s the environment because they’re local products. We have a pantry here and we have the highest quality standards. You have to pay for it. Farmers can’t always sell below cost.” , claims Antonio Rodriguez.

Source: El Diario

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