Avoca-grow

Colombia Hass avocado sector continues its growth, is vertical integration coming?

Colombian Hass avocado production continues to grow rapidly, 24% overall in 2020 to USD 110 million, as the country’s producers expand market share and enter new markets worldwide.

The country only began exporting Hass avocado to the US in 2017, and still lags far behind Peru and Mexico in terms of volumes shipped, but with forecasted annual growth of 50 per cent, it will not be long before they are competing at the same level.

Colombia has done just this in Europe where it recently overtook leading avocado producing nations (Peru, Chile, Mexico, Israel and Spain) as the main supplier of Hass, with 30% market share.

Production is expanding to meet this growth, according to Restrepo, the Export Registry of Colombia’s phytosanitary watchdog, there were 17,221 hectares of Hass in December 2020, and the projected total for 2021 is 23,000 hectares.

A director of one of the largest Hass producers in Colombia reported, “It is difficult to forecast the growth in hectares because there are many young crops that have not entered into production (year 0-3) and for these export farm registration is not mandatory.”

It’s important to note that Colombia has some of the best conditions for Hass growth in the world. It can produce for 10 months of the year and has two harvests – the main harvest at the end of the year covers 70% of production, the second harvest mid-year produces 30%. The main harvest is particularly important as mid-year there is typically an oversupply in the market.

It is unsurprising to find that Hass is a priority for the Colombian government, through the Exporta Agro programme (made up of 5 government entities). An Executive Director at a Colombian avocado trade union explained, “The avocado is the ‘star’ of Colombian agriculture, its success has been accompanied by economic development of the country’s agricultural sector, investment in expanding the food portfolio, protection of biodiversity and incorporation of sustainable practices.”

“The avocado is the ‘star’ of Colombian agriculture.”

Executive director, avocado trade union, Colombia

Growth doesn’t come easy though and the Colombian avocado producer sees sustainability as the principal risk, “Environmental issues are a risk to the business. This is made worse by some isolated producers, especially in Quindío, who are not complying with laws related to environmental destruction and the use of water. This has generated harmful publicity for the whole sector.”

“Environmental issues are a risk to the business. This is made worse by some isolated producers, especially in Quindío, who are not complying with laws related to environmental destruction and the use of water.”

Executive, avocado producer, Colombia

There have also been reports that the sector has been infiltrated by drug traffickers but the producer does not believe this is a systemic problem, “In Colombia the sector has not been permeated by drug trafficking (as it has happened in Mexico). However, packing companies that use the ports are always at risk because avocados could be used to camouflage drugs. The trade union is active in preventing this and conducts rigorous studies on the packing houses.”

Another challenge is the entry of opportunistic retailers in the sector, according to one Colombian producer, “There is a proliferation of retail exporters that harm the industry, they are primarily engaged in other activities but have opportunistically entered the sector. We do not want them because they deteriorate the quality of the product. This is a widespread concern in the sector. ”

Looking to the future our sources believe that in the short-to-medium term there will be vertical integration in the industry. We’ll be watching …

 

 

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