US bans entry of Mexican avocados: Opportunity for Chile?

RIO DE JANEIRO, BRAZIL – 25 thousand tons of Mexican avocados destined for the United States (equivalent to US$70 million in sales) could be lost. It has been the topic of the week in Mexico: the US government banned avocado imports from across the border as of February 11, after US tax inspectors were threatened while inspecting plantations in the State of Michoacán.

Eighty percent of avocado production, which covers 150,000 hectares in the Aztec country, goes to the United States, which buys around US$2.21 billion, followed by Canada and Japan, with US$199 million and US$156 million, respectively.

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And although Chile and Peru, the other major avocado producers in Latin America, do not have the United States as their main market, but Europe, where Mexico hardly sends any, they could temporarily change its destination to meet the growing demand from the United States.

According to industry sources, large buyers from the northern country have contacted Chilean producers to have a contingency plan in case they need to increase the purchase of Chilean avocado. The same thing is reportedly happening in Peru.

According to figures from ODEPA with information from the National Customs Service, Chile exported 4,477 tons of avocado worth US$12 million between January and December 2021 to the United States.

While its main export destination in the period was the Netherlands, with 44,517 tons for US$94.2 million. In total, the country exported 97,952 tons for a total of US$229 million to 20 destinations.

On Thursday there was a meeting between US and Mexican authorities to work on a security plan for agricultural inspectors, but at the time of going to press the restriction had not yet been lifted. If the veto continues, Chile could be happy because there is still time to redirect not yet ripe fruit to the United States.

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