According to the South African Avocado Growers’ Association (SAAGA), 2014 could be biggest production and export campaign yet for the South African avocado sector, following “a successful 2013 export year of 11.6 million cartons”. However, South Africa is facing increased competition on the EU market from Peru, which has “doubled its shipments to the European Union”.
As a consequence, SAAGA is making substantial investments in market development and promotion to try to overcome problems linked to variable levels of supply arising from the on-/ off-season nature of avocado production.
There are also concerns in Kenya over the competitive challenge posed by Peru on EU avocado markets. According to Eagle Fruit Alliance, Kenya’s fourth largest avocado exporter, the volume of Peruvian exports “normally forces prices below Kenya’s economically viable set point”. Exporters therefore need to carefully regulate their exports to ensure that they arrive on the EU market when supplies from Peru and South Africa are at low levels. A spokesperson for Eagle Fruit Alliance commented that Kenya has the potential “and volume to be a much bigger player in the EU arena”, but that this can only occur when new shipping facilities at Mombasa Port start operation.
SAAGA is also making expenditures aimed at “addressing the technical issues required for access to new markets such as the US and Japan”. According to SAAGA, “sufficient phytosanitary research has now been done to meet the requirements of a number of potential export markets. However, the government-to-government processes need to run their course before access is gained to new markets.”
SAAGA maintains that the negotiation of these government-to-government SPS protocols now “needs to be fast-tracked”, given the importance of these markets. The SAAGA chairman commented in an annual report that “gaining access to new markets such as the USA will have a greater impact on the profitability than low-level generic marketing development campaigns… in the EU.”
Eagle Fruit Alliance reported that it is developing “markets outside Europe in South East Asia”, and has improved its packs and packaging to better meet supermarket requirements.
An additional factor for ACP farmers in the region has been the imposition of periodic restrictions on exports to a number of major markets in Europe and the Middle East to prevent the export of invasive insect infestations. Business Daily Africa has reported that research – conducted by the International Centre of Insect Physiology and Ecology, Kenya Fresh Produce Exporters Association of Kenya, Kenya Plant Health Inspectorate Services, SAAGA, Citrus Research International and Eduardo Mondlane University in Mozambique – has convinced a number of countries “to remove their quarantine restrictions for [bananas, citrus fruit and avocados] from Côte d’Ivoire, Ghana, Kenya, Uganda, Mozambique, Tanzania and Senegal”.
Developments in the South African avocado sector and reports from Kenya highlight the growing competition on the EU market from non-ACP suppliers – competition that will only grow as new FTAs negotiated by the EU come into effect. The South African experience also highlights the importance of fast-tracking the conclusion of official SPS and quarantine protocols required for exports to take place.
Concluding the official SPS and quarantine protocols is a challenge across the ACP, and often even more pronounced than in South Africa. Given the commonality of the institutional and human resource constraints faced in many ACP countries in negotiating SPS and quarantine protocols, and the importance of this issue to market diversification, there would appear to be scope for collective ACP initiatives at the sector-specific level.
This can be seen as an important area for ‘aid for trade’ support, involving the linking of scientific cooperation across ACP countries with policy-related cooperation in order to fast-track official SPS approval processes. This could then ensure that in a number of ACP countries, institutional and human resource constraints at government level do not hold back the potential of private sector initiatives aimed at market diversification.
Given the size of many of these non-traditional markets, there would appear to be little danger of intra-ACP competition. Indeed, having supply options from a number of countries could help to even out the annual supply fluctuations that are reported to make South Africa’s export drive problematic.