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6.5     Avocado

6.5.1      Avocado industry profile

New Zealand has 1,800 growers, growing avocados from Bay of Plenty to Northland across 4,000 hectares. Growers are all voting members of the New Zealand Avocado Growers Association, which has a 100% owned subsidiary NZ Avocado Industry Limited, as the operating entity. The industry grows predominantly Hass avocados, which are harvested for export and local supply from late August through to late March. New Zealand does not currently import any avocados.

Avocados are consistently the third largest fresh fruit export from New Zealand and often, the 4th largest horticultural export. The industry value earnings reached $200 million for the first time in 2016-17, being $40 million from sales in the New Zealand market and the remainder from export sales across Australia, approximately 80%, followed by Japan, Singapore, South Korea, Thailand and some other smaller markets including India, Taiwan and the Pacific Islands. In 2018 there were thirteen HEA licensed exporters and 14 packhouses involved in the export of avocados.

The avocado industry has been a prescribed product under the HEA since 1989. NZ Avocado Industry Limited is the recognised product group, made up of growers, packhouses and exporters (Contact Jen Scoular, CEO). The Avocado Growers’ Association and NZ Avocado Industry Limited (www.nzavocado.co.nz) together as NZ Avocado, set strategy for the industry to drive growth and profitability. NZ Avocado also represents grower interests and industry good activities including research, promotion, and facilitating market access.

Under the Export Marketing Strategy (EMS) for avocados, all avocado growers, packers and exporters must comply with mandatory industry food safety, quality, and phytosanitary requirements for export. These systems are audited by New Zealand Government owned agency, AsureQuality.

In 2014 NZ Avocado established a partnership with MPI in a new Primary Growth Partnership (PGP) programme called New Zealand Avocados Go Global. The objective of this five-year programme is to significantly increase the productivity, capability and sales for the avocado industry.

Table 6.5.1: New Zealand avocado production 1999-2018 (year ended June, 5.5 kg trays and total tonnes)

Year

Export trays

Local market trays

Processing trays

Total trays

Total tonnes

1999-00

1,125,000

555,000

 

1,680,000

9,400

2000-01

1,400,000

712,000

180,000

2,292,000

12,606

2001-02

1,321,000

678,000

155,000

2,154,000

11,847

2002-03

1,259,000

1,075,000

75,000

2,409,000

13,248

2003-04

1,055,000

825,000

55,000

1,935,000

10,642

2004-05

1,122,175

895,961

118,498

2,136,634

11,751

2005-06

2,406,022

1,294,168

476,225

4,176,415

22,970

2006-07

945,885

989,335

71,137

2,006,357

11,035

2007-08

2,644,862

1,480,529

741,089

4,866,480

26,766

2008-09

1,399,270

1,158,117

144,273

2,701,660

14,859

2009-10

2,280,276

1,334,190

337,837

3,952,303

21,738

2010-11

1,721,698

1,034,090

280,549

3,036,337

16,700

2011-12

3,713,122

1,774,375

693,781

6,181,278

33,997

2012-13

1,217,184

1,191,204

159,838

2,568,226

14,125

2013-14

3,136,968

1,280,625

479,234

4,896,827

26,933

2014-15

4,487,540

1,877,542

744,590

7,109,672

39,103

2015-16

2,550,990

1,233,927

379,890

4,164,807

22,906

2016-17

4,731,850

2,190,712

963,795

7,886,357

43,375

2017-18

2,235,340

1,645,798

328,325

4,110,463

22,608

Source: New Zealand Avocado Growers' Association & Avocado Industry Council Ltd Annual Report 2018

 

  1. 6.5.2  Avocado exports

Based on export earnings, the avocado industry was the fourth most valuable horticultural export group in 2018. The total value of all avocado exports increased by 17% in terms of value compared with 2016 but saw a 14% decrease on the volume exported in 2016. Australia remains New Zealand's largest export market for avocados, with just under 12,000 tonnes sent to this market in 2018 – showing a decrease in volume of 18% from 2016’s figures, but an increase in value of 15%. As measured by volume, exports to Australia make up 81% of all avocado exports, a decrease from the 85% they made up in 2016. It is important to note that avocados bear a large crop every second year, which can be seen in the difference in crop volumes in Table 6.5.1 and in export volumes in 6.5.2. The industry’s traditional focus on the Australian market as the export window means that fruit remain on trees during flowering, a management practice which encourages alternate bearing. Notable emerging markets include Korea, which saw a 158% increase in the value of exports compared with 2016, and Taiwan, which saw an increase of over 400% in the value of exports compared with 2016 figures.

 

Table 6.5.2: Avocado (0804.40.00.01) export markets 2016-18 (year ending June, tonnes and $NZ FOB)

Market

2016

2017

2018

Volume

Value

Volume

Value

Volume

Value

Australia

14,384

70,707,653

24,980

124,974,575

11,847

81,313,546

Korea

412

2,122,055

1,080

5,064,577

886

5,464,397

Thailand

579

3,901,151

684

4,595,308

625

4,498,422

Japan

660

2,798,400

1,708

6,458,085

485

1,991,292

Singapore

633

2,836,306

810

3,778,528

323

1,978,382

Taiwan

57

391,537

181

1,117,537

181

1,583,039

India

42

278,780

66

497,320

93

651,878

Malaysia

119

670,330

153

699,428

70

399,841

New Caledonia

18

102,509

27

148,464

16

94,215

Fiji

12

62,339

11

58,691

12

79,439

Indonesia

4

31,177

7

36,801

6

48,434

Norway

0

0

0

0

2

13,860

China

0

0

0

0

1

12,498

French Polynesia

0

2,051

0

1,922

1

7,012

Pacific Islands

0.2

1,890

0

1,759

0

2,108

United States of America

0

0

0

522

0

1,066

Papua New Guinea

0

0

0

65

0

591

Hong Kong

4

19,449

17

87,185

0

270

Maldives

0

0

0

35

0

0

Total

16,924

$83,925,627

29,724

$147,520,802

14,550

$98,140,290

% change (Yr/Yr)

-42%

-27%

76%

76%

-51%

-33%

Source: Statistics New Zealand

** The Statistics NZ value of avocado exports to Japan in 2016 is underestimated by approximately 50%. This is an error acknowledged by Statistics NZ, but the data cannot be updated by Statistics NZ. To calculate the value of exports the average $/kg of $4.25/kg was applied to 660,000kg = $2,798,400.

 

  1. 6.5.3  Barriers to avocado exports

Cost of Tariffs

New Zealand’s main export market, Australia, has no tariffs on New Zealand avocados (due to CER). The Republic of Korea could be a growth market but a tariff of 18% (in 2018) still appears to be curtailing development. Under the NZ-Korea FTA the tariff for avocados will decrease to zero by 2024. Under CPTPP the 3% tariff into Japan will be eliminated from 30 December 2018. The tariff rate in Taiwan was eliminated in 2018, down from 3.8% in 2016, under the ANZTEC Agreement. Tariffs in some other markets may also be stifling export growth, particularly in the US market where New Zealand pays a US11.2c / kg tariff as opposed to Mexico's 0% tariff under NAFTA, Chile's tariff rate quota of 0%, and the Dominican Republic's tariff free access under the CAFTA.

 

Table 6.5.3: Cost of avocado tariffs (based on 2018 FOB value)

Countries

Tariff rate

Value

Estimated cost of tariff ($)

Australia

0%

81,313,546

0

Korea

18%

5,464,397

983,591

Thailand

0%

4,498,422

0

Japan

3%

1,991,292

59,739

Singapore

0%

1,978,382

0

Taiwan

0%

1,583,039

0

India

30%

651,878

195,563

Malaysia

0%

399,841

0

Indonesia

4%

48,434

1,937

United States of America

11.2c/kg

1,066

23

Hong Kong

0%

270

0

Total

1.3%

$97,930,567

$1,240,854

 

SPS market access barriers

Australia – The avocado industry has traditionally participated in Australia’s offshore pre-shipment inspection (OPI) programme. In 2016 Australia announced that it would be winding-down the OPI programme, and the OPI programme will not be offered to avocados after 2019 due to concerns over the number of inspectors based offshore and that other countries were requesting equivalent clearance processes into Australia. The recently introduced Compliance Based Inspection Scheme (CBIS) was intended to assist the transition away from OPI by offering reduced frequency of inspection for compliant pathways. However, pest detections on-arrival in Australia since the introduction of CBIS in 2017 has created issues for exporters leading to increased fumigation rates. Many of these issues have arisen from incomplete pest identification in Australia and actions taken on non-actionable pests. The complete phase out of OPI by December 2019 is considered a trade risk. Trials with Vapormate™ (ethyl formate, a generally regarded as safe (GRAS) compound), have to date been unsuccessful, but continue.

China – The New Zealand avocado industry gained market access to China in January 2018 and see this as a key market to take the industry’s increasing production and reduce the risk of potential changes in market dynamics/market share in Australia. Trade to China is under an Official Assurance Programme (OAP) overseen by MPI which requires annual grower, packer and exporter registration as well as on-orchard and post-harvest pest management activities.

New Caledonia - An import quota system operates to allocate permit volumes to importers on a monthly basis. This creates uncertainty for NZ exporters and their importer customers.

United States of America – Phytosanitary certificates for avocados to the USA require an Additional Declaration for light brown apple moth. The industry requires mandatory high-pressure water blasting of all fruit destined for the USA. No avocados have been exported to the USA since 2014 and distance to market (fruit quality) and market returns will see low volumes exported to the USA in the near future.