A leading Kenyan avocado supplier has accused Peruvian exporters of making Europe “uneconomically viable” for African growers by flooding the market with excess products and creating an oversupply in Kenya’s principal European export destinations.
Anton Bothma of Kenya’s fourth largest avocado exporter, Eagle Fruit Alliance, said that despite having good quality fruit, Kenyan growers were struggling to compete with rapidly emerging Peruvian exporters.
Speaking to www.freshfruitportal.com, he claimed the huge expansion of production combined with existing exports from South Africa and Mexico was creating an oversupply situation in Europe, which was making it extremely difficult for Kenyan exporters to maintain their previous market share.
In fact, Bothma said that given the increase in Peruvian volumes this season, Kenya has effectively had to halt avocado exports to Europe, potentially putting in jeopardy the growers’ livelihoods.
“Peru started planting avocado a few years ago in very big volume and plantings are increasing by about 30% per year,” he explained.
“Their main market is the U.S. and any ‘overspill’ will go to Europe, but the volume is, however, so huge that as from May they are loading between 180 and 200 containers a week to Europe.
“At the same time South Africa and Mexico are also loading to Europe, resulting in an oversupply situation in Europe.”
Unlike grapes, apples or citrus, Bothma said consumption per capita of avocado was relatively low in Europe, meaning that during peak season times it had become “uneconomically viable to compete with Peru.”
Typically, Kenya begins packing in February and volumes increase in March, before reaching peak season in May. However, Bothma said that Kenya had to completely halt packing during May as volumes arriving in Europe from Peru were just too big.
“This is devastating to the Kenyan producer as avocado exports are one of the main export commodities in Kenya,” he said.
“All packers stopped during May as Peru just had too many containers arriving.
“Kenya is not a rich country and without a good income from avocados, producers are struggling just to keep children in school and to try to make a living.”
Bothma said the situation had been exacerbated by a perception in Europe of Kenyan avocados being a lower-quality product, despite much work having been done to improve the cosmetic quality of the fruit.
“Today, it compares very well with Peruvian avocados, yet the market still discounts the Kenya product,” he said.
Fortunately, Bothma said Kenyan growers benefited from having a second annual harvest, which began in late August and ran through to November. Although this was a smaller crop than Kenya’s main harvest, he said the second crop allowed Kenya to have a window of opportunity at a time when no other competitors were exporting to Europe.
However, Bothma said shipping from Kenya was still a major challenge as costs were 40% higher compared with those from Peru, largely a result of smaller Kenyan ships having a higher cost per unit and being forced to go wide around the Horn of Africa to avoid Somali pirates.
Despite the advantage of the second harvest, Bothma said that Kenya would continue to struggle to compete with Peru.
“As long as Peru keeps on flooding the market, there is no solution other than to supply very early or very late so to avoid the onslaught of Peru,” he said.
However, Bothma believes there may yet be hope for Kenyan growers. Increasing consumption in Europe may yet, he argued, provide hope for Kenyan suppliers, while growing Peruvian focus on North America and the Far East may leave space for African producers.
“The biggest challenge now is to get shipping costs in line with those of Peru, although shipping companies are ready to cooperate in this matter,” Bothma added.