Avocado, the “Green Gold” of Global Trade

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Local residents of Michoacán named avocado the “Green Gold” of Mexico. It’s the precious commodity drives Michoacán’s economy and feeds an American obsession. It is planted mainly in the fertile volcanic soil of Michoacán, upland from Acapulco beach. This fruit produced in Mexico is more than any other country in the world. It is about one-third of the world production. Nine out of every 10 imported avocados in the United States come from Michoacán.

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Avocados have been planted in Mexico for about 9,000 years. In spite of its long history, the Mexican avocado export amount was very small through the 1980s. Due to concerns about pests and cheaper competition, the United States had banned the import of Mexican avocados since 1914. But in 1994, Mexico, Canada and the United States enacted the North American Free Trade Agreement(NAFTA). Soon after, the United States canceled the ban.

Under NAFTA, avocados have filled the seasonal blank in United States grocery stores and changed the American eating habits. In fact, avocados are so popular at parties and festivities that people across the United States enjoy more than 1.7 billion pounds of Avocados from Mexico per year, and the fever of avocado of American is keep intensifying year by year. In the first few weeks of the Super Bowl in February, Americans bought about 135 million pounds of avocados.

Avocado contains lots of fiber and is rich in monounsaturated fats, vitamins and minerals, so it continues to gain popularity around the world. More health-conscious consumers in China show the interest in the “heart-healthy” avocados. The fruit also appeals to “young, trendy people”. The data of Avocado Producers and Exporting Packers Association of Mexico (APEAM) shows that the Chinese market has been growing at a very rapid rate, but the total absolute quantity is still relatively small compared with other markets such as the United States. But of course, its potential is huge.

Although a newcomer, the avocado excelled in the Chinese market. General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) of P.R.C has granted market access for avocados from three nations: Mexico, Chile,and Peru. Mexico’s avocado exports to China totaled 8,800 tons in 2017, shrinking by 12% compared to 2016. Even so, Mexico is still proud of its fruit quality and a year-round supply of avocados. In 2017, Chile’s avocado exports to China totaled 16,700 tons. It succeeded in being China’s largest avocado supplier during the last two years. Peru only ranked in third place with 6,700 tons of avocado exported to China in 2017. But Peru is able to supply the Chinese market when Mexican avocados are in short supply and when Chilean avocados suffer from unstable quality.

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In the coming years, the emergence of domestic avocados in China will make the competition more intense. In September 2017, Menglian County, of Pu’er City in Yunnan Province, celebrated its first commercial harvest of avocados. Due to good planting conditions and large investment, it is expected to become the main avocado producing area in China. It is expected that by 2018, the output will reach 2,000 tons and the planting area will reach 6,666 hectares by 2025.

Another good news for the Chinese avocado market is that the Chinese government has reduced the import tariffs on avocados from 10% to 7% starting from last December.

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