The price of Mexican avocados surged by a third on Tuesday, the fruit’s biggest one-day price rise in almost a decade, as businesses scrambled to meet huge US demand amid fears of a border shutdown.
Mexican Hass avocados, a fatty variety of the soft fruit that is grown in the country’s southwestern Michoacán state, jumped to 390 pesos for 10kg, the biggest daily increase since a 48 per cent rally in April 2009.
The price surge is a sign of the impact on food prices of Donald Trump’s threats to close the Mexican border, in an attempt to stem what the US president sees as a flood of illegal migrants. “Companies are trying to get as much avocado as possible to the US market before that possibly happens,” said David Magana, a senior analyst covering the sector at Rabobank.
Used in salads, on toast, and as a key ingredient in guacamole, avocado has boomed in popularity in recent years, heralded for the nutritional benefits of its oil and favoured for its photogenic qualities in Instagram pictures. In July 2017, the price of Mexican Hass avocado peaked at 640 pesos for 10kg.
Mexico provided more than four of every five avocados consumed in the US last year, according to the US Department of Agriculture. Michoacán is the world’s largest producer of avocados, accounting for 92 per cent of the country’s output of the fruit.
“This is not a normal situation,” said Mr Magana. “We in the past [have] seen prices doubling easily just because of weather disruptions or when there was a strike in Mexico. What we are seeing now is something completely new so we don’t know what could happen. We could easily see empty shelves if we close the border.”
This week’s price jump follows a yearly trend of prices rising sharply in the spring in advance of Cinco de Mayo, an annual celebration of Mexican culture that takes place in the US and Mexico on May 5. The price of the fruit gained more than one-fifth on April 13 last year, for example, but Tuesday’s price increase has been exacerbated by fears of a deeper supply shortage in coming months. Californian, Peruvian and Chilean avocados also feed the US market but collectively account for less than 20 per cent.
The latest rally “is a perfect scenario of how policy can impact prices as much as climate”, said Sara Menker, founder of agricultural data group Gro Intelligence. “Policy can make or break you.”
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