The Growth Challenges of Colombian Avocado in the Global Market
Over the last two decades, Colombia has transformed from an industry underdog to the second-largest global producer of Hass avocados, yielding an impressive 979 thousand tons—trailing only behind Mexico’s 2.4 million tons.
Despite this surge in production, Colombia finds itself trailing Mexico, Peru, and the Dominican Republic in export volumes and faces significant challenges to becoming the world’s top avocado exporter.
Key Challenges Facing Colombian Avocados
1. Increasing Productivity
To grow its exports, Colombia needs to achieve a stronger level of productivity. Currently, the country’s yield per hectare fluctuates between 6 and 7 tons, a figure eclipsed by competitors like Peru, where yields range from 25 to 30 tons per hectare.
The meticulous selection of plant material is essential to ensure sustainable long-term yields, a crucial strategy for meeting stringent international standards.
The La Niña phenomenon in 2021 and 2022 significantly impacted the country, resulting in a 20% reduction in productivity due to excess moisture, affecting the quality and size of the exportable fruit.
2. Enhancing International Price Competitiveness
Climatic challenges have inflated production costs in Colombia, complicating negotiations for international prices. The resulting smaller and less valuable fruits have resulted in unfavorable price differentials compared to competitors.
While small and medium-sized producers weathered the pricing fluctuations between 2018 and 2020, the climatic impact in 2021 was severe, with a 4kg box hitting a historic low of 6 euros.
3. Process Technification
Despite possessing unique geographical advantages, ample land availability, and cheaper labor than countries like Peru and Chile, Colombia still lags in advanced technical processes. It is, therefore, imperative to modernize production and harvesting techniques to ensure fruit quality and mitigate diseases affecting the crop.
What Strategy Should Colombia Pursue?
For Colombia to expand its presence in the international market, especially in Europe and the United States, it must focus on implementing agricultural and phytosanitary practices and technification to enhance the productivity and quality of its Hass avocados.
This will enable Colombian producers and exporters to be more competitive against other countries and grow their export industry.
Ensure the Quality of Your Hass Avocados
ProducePay’s customized Pre-Season Financing allows you to invest in sustainable and technified agricultural practices that will improve the quality of your Hass avocados, maximizing productivity and boosting sales.
Get up to $30 million in financing in just 30 days and invest in your growth!