Not many agricultural subsectors are testimony to the export-led growth ambitions, of the South African government, as avocados. Between the 1994/1995 and 2016/2017 production seasons, South Africa’s avocado output grew by 72% to 77 508 tons, according to data from the Department of Agriculture, Forestry and Fisheries (DAFF). Avocado production is concentrated mainly in the subtropical areas of Limpopo, Mpumalanga and KwaZulu- Natal. Production improvement in recent years has been underpinned by growing demand from the domestic and global markets. Between 1994/1995 and 2016/2017, South Africa has exported, on average, about two-thirds of its avocado output. The leading markets have been the Netherlands, the UK, Spain, Russia, the United Arab Emirates (UAE), Portugal, Russia, Namibia, Turkey, Saudi Arabia and France, which countries collectively accounted for 97% of South Africa’s avocado exports in 2017 and in 2018.
Although not amongst the top 10 global avocado-producing countries, South Africa holds a prominent place in the product’s global export market. The country was the world’s eighth largest avocado exporter in value terms in 2018. The other African country that featured in the top 10 global avocado exporters was Kenya, ranked at the seventh largest exporter last year. But this has not always been the case, although Kenya has consistently been the continent’s leading producer of avocados, accounting for a share of almost 30% share, which is twice the volume produced by South Africa. Kenya became the continent’s leading exporter of avocados in 2017 and maintained that position in 2018, as shown in Figure 1. This was driven by a growing demand from the same countries to which South Africa generally exports, namely the UAE, the Netherlands, France, Saudi Arabia, and the UK.
But Kenya has added another key market to its list of potential export markets – China. In the week of 26 April, the country signed a memorandum of understanding on sanitary and phytosanitary measures to enable the export of avocados into China. China is an important and growing market in the global avocado sphere and was ranked as the ninth largest importer last year. China’s avocado imports have grown from 4 tons in 2008 to 43 859 tons in 2018, according to data from the Trade Map. If this growth continues in the future, Kenya stands to benefit from it. Countries that currently supply a large share of avocados to China are Peru, Mexico, Chile and New Zealand.
This brings us to the point of South Africa, which exports avocados mainly destined to the European, Black Sea and Middle East regions. While these markets have served the country well over the past couple of years, it would be useful for South Africa to explore the Chinese market given its enormous growth in past ten years. Moreover, as plantings increase across South Africa, with industry players suggesting that about 1 500ha will be added to the current area plantings of 17 500ha every year for the next five years, new markets will be needed for the increased supply. All this dovetails with government’s ambition of achieving export-led growth in agriculture, and should, therefore, receive attention in terms of working with the industry to open up new markets for agriculture, and for avocados in this particular case. -Wandile Sihlobo, Agbiz
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.