Producers in Michoacán are unhappy about avocados from other parts of Mexico entering the state in order to be exported illegally to the US, according to Michoacan producers dumping regulations, but, legally for USDA and FDA, sanitary standards, a practice which is forcing down the price paid for genuine Michoacán-grown avocados
Mexican avocado exports are being disrupted by a dispute over the amount that growers are being paid for their fruit by packers.
They are demanding that packers pay a minimum purchase price of US$1.75 per kg in order to compensate for the losses they have suffered, according to them, even though this would be in contravention of Mexico’s competition laws.
A meeting was held last week to try and resolve the conflict with the help of mediation from the Competition Commission (Cofece), but the two sides failed to reach agreement.
Around 46 per cent of Mexico’s avocado exports are packed by subsidiaries of US companies, according to the Association of Producers and Packers Exporters of Avocado of Mexico (Apeam).
The association said the stoppage had affected more than 24,000 workers and was costing the industry US$4.3m a day as shipments to the US were running well below the usual 3,000-tonne daily average.
Apeam spokesman Ramón Paz said that the authorities would be forced to intervene to re-establish the rule of law unless producers ended their strike.
Paz said the walkout had already led to a number of advertising contracts in the US being cancelled, and was also putting the Mexican avocado’s Super Bowl campaign in jeopardy.
Mexico exported US$2.828bn worth of avocados in 2017, a year-on-year increase of 34 per cent on the previous year, according to the Bank of Mexico.
The US was the leading destination, followed by Canada, Japan, the Netherlands, France Spain, El Salvador, China, Honduras and the UK, although, other countries like Colombia, Chile, Ecuador, are taking a bite of the American market.
To support companies and producers with responsible practices, and apply traceability controls in real time FGH International Agribusiness Consulting, offers agricultural consulting and business services solutions that merge sound agronomic principles with economic business objectives. Our value proposition not only lies in agricultural consulting, but also in business service solutions within Latin America. We focus on maximizing our partners ROI, consistent with cost-effective and sustainable agronomic practices.
We work in partnership with first class agribusiness solution providers, developed by and for sector commodities stakeholders such as banana, sugar cane, palm oil, horticulture, coffee, cocoa, beef, etc., despite language, country, region. We provide solutions that enables producers and processors not only to keep track of performance, but also to set realistic, attainable goals and to elaborate improvement plans for each stage of their journey to a more sustainable production. We help them go above and beyond certification/verification levels, creating greater visibility of the progress made over time by (non-)certified/verified producers; allowing to roadmap every stage of their agribusiness value chain.
To find out more about our solutions or to share learnings to support suppliers on their journey to excellence, please feel free to contact us, FGH’s International Agribusiness, Latin America's leading agribusiness consulting firm.