The global demand for the super fruit of avocados continues to be lower due to inflation, exchange rates, production growth in new regions as well as the global pandemic recovery and shipping cost increases and delays. Despite these global challenges Mexican production is going strong says Francisco Murguía, director of Mexican organic avocado grower and exporter Frutos Guadalajara.
Francisco Murguía, Director of Frutos Guadalajara in their organic avocado orchards
While the cost of fertilisers have also skyrocketed across the world, as organic growers who do not need this input, it has not impacted them says Murguía. He says despite the heavy increases Mexican growers as the world’s leading growers and exporters of avocados are still very profitable.
“The fertilizers cost haven't hit us, because our production is organic. Even though the fertilizer has skyrocketed, it is still very profitable to conventional producers, they can reach up to 50% contribution margin producing in Mexico. The avocado demand has lowered because of inflation, and the exchange rates don't help at all with this situation. Also the prices are still down, because of the global crisis and the production growth in new origins, mainly from African and South American origins,” states Murguía.
“The problem with the logistics is not just about the cost increase, the delays are also a headache. You can book a shipment and the shipping company just tells you they will not stop by the port while your container is waiting to be loaded on the ship, this just happened to us today. It's difficult to manage the logistics with these conditions, but we have no choice, we have to do our best and find the best options for our customers. In respect of our differentiation as a company, we have discussed with our customers working by contract with fix prices, which covers the total cost plus a reasonable profit margin. We're agribusiness entrepreneurs, not speculators,” Murguía explains.
“Our farms are all organic, the conventional fruit we export is gathered from other producers. We are convinced that organic is the future, that we can reach the same volumes as conventional does. The key is to prevent, not to react in the crops management. We do Hass and Mendez varieties, almost all year long, between these two varieties and three Mexican states: Nayarit, Jalisco and Michoacan. Now we're focused on the European market, but we're seeking to develop the Canadian, Japanese and Middle Eastern markets. This season our forecast is to export 40-50 organic and 150 conventional containers of avocados. We pack in a generic unbranded plastic 10 kg box,” states Murguía.
These myriad challenges will not stop Frutos Guadalajara from expanding to support their growth ambitions in more markets. “We gather and pack fruit from about 1,000 Ha of other producers' orchards. We're establishing another 100 Ha all organic in Nayarit,” concludes Murguía.