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6.6     Avocado

6.6.1      Avocado industry profile

The New Zealand avocado industry is vibrant and continues to expand, with over 2000 avocado growers across the Bay of Plenty and up to Northland. New Zealand currently produces 2% of the global supply from over 4,000 hectares of avocado trees, and is the ninth largest international avocado exporter.

The New Zealand avocado industry is in a position of growth and development, with the industry reporting returns for the 2019/20 season of $154 million, an increase on the previous year of $10 million. The 2019/20 avocado season saw avocado export volumes rise to 3.8 million 5.5-kg trays, an increase of 26% on the previous season. Asian markets including Thailand, South Korea, Singapore and Taiwan received 35% more volume, meeting the industry’s objective to grow volume to priority markets in Asia. Exporters anticipate that 4.4 million trays will be exported in 2020/21. Growth in global demand is being met with a significant growth in supply, attributed to the investment made across the growing regions.

A record 70 million avocados worth over $50 million were sold in the New Zealand market in 2019/20, demonstrating Kiwis' growing love of the avocado. Avocados have 19 vitamins and nutrients, including those necessary for a healthy immune system. An increased focus from consumers on health and wellness has contributed to the growth in New Zealand avocado consumption.

New Zealand Avocado is very aware of the demand by consumers and customers alike to know about the impact avocados have on land, environment and people. The industry is developing a sustainability strategy, and has hosted a series of stakeholder workshops around the avocado-growing regions. Many avocado growers are passionate about taking care of New Zealand and want to see their orchards contribute positively to environmental, economic and social sustainability in their communities and regions.

New Zealand Avocado is the industry body for avocados, and supports the industry across the value chain from nurseries through to growers, packers, marketers and exporters. New Zealand Avocado undertakes activities including managing export systems, industry biosecurity and market access to support growers optimise their investment in avocados.

Growers are members of the New Zealand Avocado Growers Association, which has a 100% owned subsidiary New Zealand Avocado Industry Limited, as its operating entity. The association is recognised by the government as representing New Zealand avocado growers. In that recognition comes the requirement that any avocado exporter must be licensed with the New Zealand Horticulture Export Authority (HEA). In 2020, there are 13 licensed exporters and 12 registered packers involved in the export of New Zealand avocados. Avocado has been a prescribed product under the HEA since 1989. New Zealand Avocado Industry Limited is the recognised product group, made up of growers, packhouses and exporters.

Under the export marketing strategy 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 the government-owned agency AsureQuality.

New Zealand Avocado won the bid to host the 2023 World Avocado Congress in New Zealand, at the September 2019 congress in Colombia. This vote by congress participants was an endorsement of their view of New Zealand’s place in the global avocado industry. This will be the first time New Zealand has hosted the event, which is held in a different country every four years.

6.6.2  Exports

The avocado industry was the fifth most valuable horticultural export group in 2020, a drop from fourth position from 2018. The total value of all avocado exports increased by nearly 15% in terms of value compared with 2018 to be worth $112.5 million in 2020. Australia is the main export destination for avocados and increased 3.3% to $84 million in 2020. Just over 18,000 tonnes, or 77% of the total volume is exported to Australia, which is an increase of 52% from the 2018 export volume. While the volume and overall value has increased the per tonne value of avocado exports to Australia has decreased from $6,864/tonne in 2018 to $4,660/tonne in 2020. Markets that were notable emerging markets in 2018 such as South Korea, Thailand, and Taiwan, have consolidated or grown in value over this period, South Korea by 3.3%, Thailand by 117%, and Taiwan by 128% since 2018.

Table 6.6.2: Avocado (0804.40.00.01, 0804.40.00.09) export markets 2018-2020 (year ending June, tonnes and $NZ FOB)

Market

2018

2019

2020

Volume

Value

Volume

Value

Volume

Value

Australia

11,847

81,313,546

16,038

82,182,646

18,018

83,958,924

Thailand

625

4,498,422

909

5,886,297

1,727

9,786,986

South Korea

886

5,464,397

1,224

7,414,486

1,051

5,663,720

Taiwan

181

1,583,039

365

2,448,380

603

3,617,522

Japan

485

1,991,292

566

2,346,627

673

3,217,124

Singapore

323

1,978,382

402

1,928,020

633

2,687,279

China

1

12,498

174

873,216

302

1,258,401

India

93

651,878

97

614,667

194

1,023,353

Malaysia

70

399,841

71

351,403

163

660,228

Hong Kong

0

270

17

92,529

66

246,835

New Caledonia

16

94,215

26

163,678

37

180,240

Fiji

12

79,439

12

76,398

16

68,225

United Arab Emirates

0

0

0

0

17

66,115

Indonesia

6

48,434

0

0

9

46,208

United States of America

0

1,066

0

0

1

13,937

Pacific Islands

0

2,108

1

9,394

1

8,270

French Polynesia

1

7,012

1

9,485

0

1,254

Norway

2

13,860

0

0

0

0

Papua New Guinea

0

591

0

0

0

0

Total

14,550

$98,140,290

19,903

$104,397,226

23,512

$112,504,621

% change (Yr/Yr)

-51%

-33%

37%

6%

18%

8%

 

6.6.3  Barriers to export

Cost of Tariffs

Australia is the largest single market for avocados importing 75% by value, where there are no tariffs because of CER. South Korea could be a growth market but a tariff of 12% (down from 18% in 2018) still appears to be curtailing market development. Under the New Zealand-Korea FTA, the tariff for avocados will decrease to zero by 2024. Under CPTPP, the tariff into Japan was removed on 30 December 2018. The tariff rate in Taiwan was also removed in 2018, under the ANZTEC Agreement.

Tariffs in some other markets may also be stifling export growth. The 30% tariff imposed by India represents 30% of tariff costs which is paid on just 1% of export value. Avocados to the USA are subject to a tariff of US11.2c/kg, while Mexico has a 0% tariff under NAFTA, Chile has a tariff rate quota of 0%, and the Dominican Republic has tariff free access under the CAFTA.

Table 6.6.3: Cost of avocado tariffs (based on 2020 FOB value)

Countries

Tariff rate

Value

Estimated cost of tariff ($)

Australia

0%

83,958,924

0

Thailand

0%

9,786,986

0

South Korea

12%

5,663,720

679,646

Taiwan

0%

3,617,522

0

Japan

0%

3,217,124

0

Singapore

0%

2,687,279

0

China

0%

1,258,401

0

India

30%

1,023,353

307,006

Malaysia

0%

660,228

0

Hong Kong

0%

246,835

0

New Caledonia

10%

180,240

18,024

Fiji

5%

68,225

3,411

United Arab Emirates

0%

66,115

0

Indonesia

4%

46,208

1,848

United States of America

11.2¢/kg

13,937

176

French Polynesia

4%

1,254

50

Total

0.9%

$112,496,351

$1,010,162

SPS market access barriers

Australia. Access difficulties continue. Since the removal of the offshore pre-shipment inspection (OPI) programme and the introduction of the Compliance-Based Intervention Scheme (CBIS) (see section 7.8.3 for details), pest detections on arrival in Australia have led to increased fumigation rates. This has been caused mostly by incomplete pest identification in Australia, and actions taken on non-actionable pests. Fumigation trials with Vapormate™ (ethyl formate) and ECO2FUME® (Phosphine), have to date been unsuccessful, however trials with further fumigants continue.

Australia continues to be the industry’s largest export market by volume with the remaining export volumes spread across nine Asian markets.

China. A promising market. New Zealand gained market access to China in January 2018. Trade to China is under an official assurance programme (OAP) overseen by MPI, which requires annual grower, packer and exporter registration as well as pest management in orchards and after harvest. The New Zealand avocado industry sees China 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.

United States of America. A limited market. Phytosanitary certificates for avocados to the USA require an additional declaration for light brown apple moth (LBAM). The industry requires 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.

Vietnam. A potential new market. The New Zealand avocado industry has requested access to Vietnam, and this has been prioritised by MPI. Vietnam has indicated it will consider this request once a request for strawberry access is completed. This market is of particular interest to the New Zealand avocado industry.