One fruit went from R10 to R43 in four years by Kirsten Minnaar

[Nat Quinn]

One fruit went from R10 to R43 in four years by Kirsten Minnaar

Avocado prices in South Africa have surged dramatically due to lower supply, delayed local harvests, disruptions in imports, and increasing global demand. Now, local retailers are struggling to keep up their supply.

On 16 January, AMT reported that avocado prices jumped by 68% to R43.35 per kilogram over the past week.

Compared to 2021, when the average of price of a kilogram of avocados in South Africa was between R10 and R20, this increase is significant.

In addition to steep price increases, South Africans are also facing avocado shortages, with volumes to the markets about 43% lower than at the same time a year ago.

Notably, retailers like Woolworths have confirmed that it has struggled to maintain supply.

“Ensuring fresh produce is readily available for our customers is a top priority, and we continuously monitor the macro-environment when predicting and planning the supply of seasonal fruit and vegetables,” Woolworths told Daily Investor.

Woolworths has historically struggled with avocado supplies in January and has implemented measures to address this challenge.

This includes supplementing its avocado stock with additional suppliers. For instance, in January, it sourced avocados from Tanzania to mitigate the shortage of local farmers.

The retailer explained that this season’s shortage is predominantly due to harvesting times shifting in the KwaZulu-Natal region, their Eastern Cape farmers seeing lower volumes this year, and unexpected logistical delays have also affected avocados originating from Tanzania.

“As a matter of interest, avocado trees tend to adopt alternate bearing cycles which can see less fruit harvested during ‘off years’, such as the one our Eastern Cape farmer is experiencing.”

“The good news is the new season harvests from our farmers in Mozambique and Limpopo are nearly ready and will ease supply constraints over the coming weeks. We are confident this will return our avocado supply levels to normal.”

“Woolworths is passionate about meeting our customers’ high expectations, and we will not sell products that do not meet our strict quality standards.”

On the Kaya Biz podcast, agricultural economist Thabile Nkunjana explained that South Africa typically relies on imported avocados from October to January, as local production only begins around late January or early February.

Tanzania, the primary supplier during this period, experienced disruptions in late 2023, which reduced its usual supply to South Africa.

Mozambique, another supplier, has faced challenges due to ongoing unrest, which may further impact imports.

Although some retailers have had challenges maintaining their supply, the shortage is not uniform across the country, as availability depends on regional supply chains and retailer distribution.

However, Nkunjana explained that until local avocado production resumes in February, consumers are likely to experience sporadic availability in stores.

He said that the avocado has become a very important commodity due to its versatile uses and health benefits, whether for consumption or other purposes.

Unfortunately, avocados are very sensitive to weather conditions, and as a result, demand frequently outpaces supply.

Shortages in key export markets, such as Germany, have driven up prices, allowing alternative suppliers like Chile to charge premium rates.

This, paired with the global demand for avocados increasing, has prompted South Africa to step up its own production and prioritise exports where prices are often more lucrative.

“We’ve seen quite a significant increase in our avocados which have increased from 28,000 from 2004 to around 70,000 as of 2023. That’s a 50% increase,” Nkunjana said.

This supply and demand dilemma is also responsible for the local price fluctuations, such as those noted in AMT’s report.

Factors such as climate change and weather conditions in major exporting countries like Peru and South Africa significantly affect availability and costs.

As supply stabilises, prices may temporarily decrease; however, global market dynamics will continue to cause fluctuations.

“There’s always going to be an issue around prices. But prices are heavily dependent on the issues of supply and demand across the world,” Nkunjana said.

 

source:One fruit went from R10 to R43 in four years – Daily Investor

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