MARKET ANALYSIS REPORT NO 1 OF 2014: AVOCADO
INTRODUCTION
The following text is a review of the avocado marketing environment. This analysis is updated on
a quarterly1 basis. The interval covered in the current issue is from quarter 4 of 2012 to quarter 4
of 2013. This period is subdivided into five, three-month long quarters. The key issues discussed
in the review are the trends in producer prices, production volumes and gross values, sales in the
National Fresh Produce Markets (NFPMs), volumes and gross values of both exports and
imports. During the period under review the average producer price for avocados increased by
1.67% on a year-on-year basis, total production increased by 22.33% while sales at the NFPMs
also increased by 3.92%.The total volume of avocado exports decreased by 71.94%, while there
was none avocado imported during the fourth quarter.
1. AVERAGE PRODUCER PRICE OF AVOCADOS
Figure 1 illustrates the average producer prices of avocados for the period under review. The
average producer price for avocados during the fourth quarter of 2013 reached R6 655.41 per
ton. The price was 14.50% lower as compared to the previous quarter (quarter 3, 2013) and
1.67% higher compared to previous season at the same time (quarter 4, 2012). As can be seen
on the graph, avocado prices are usually at their lowest during the fourth quarter of each year
mainly due to a regular drop in demand. One could anticipate an increase in prices for the next
coming quarter as demand picks up in the first quarter.
Quarter 1 (January to March), Quarter 2 (April to June), Quarter 3 (July to September), Quarter 4 (October to
December)
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Figure 1: Average producer prices of avocados
8000.00
Average price (Rand/Ton)
7800.00
7600.00
7400.00
7200.00
7000.00
6800.00
6600.00
6400.00
6200.00
6000.00
5800.00
Average Producer Price
(Rand/ton)
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
6546.16
7112.17
7561.20
7783.95
6655.41
Quarters
Source: Statistics and Economic Analysis, DAFF
2. TOTAL DOMESTIC PRODUCTION OF AVOCADOS
The total quarterly production volumes and gross values of avocados during the period under
review are presented in Figure 2. A total volume of 10 408 tons of avocados were produced in
South Africa during the fourth quarter. The volume was 68.45% lower than the production value
of the previous quarter (quarter 3 2013) and 22.33% higher as compared to previous year at the
same time (quarter 4 2012). As can be visualised on the below graph, production usually start
declining in the third quarter after reaching its peak in the second quarter, and remain at its lowest
during the first and fourth quarters. Undoubtedly so, one can expect a further minimal drop in
production for the next coming quarter.
Avocados worth the value of R69 million were produced in South Africa during the fourth quarter
(quarter 4 2013). This value was 81.44% lower as compared to previous quarter (quarter 3 2013)
and 24.37% higher as compared to last season at the same quarter.
2
40000
400
35000
350
30000
300
25000
250
20000
200
15000
150
10000
100
5000
50
0
Volumes in Tons
Value in Rands (million)
Value in Rands (million)
Volume in Tons
Figure 2: Quarterly production and gross value of avocados
Q4
2012
8509
56
Q1
2013
8108
58
Q2
2013
37262
282
Q3
2013
32988
373
Q4
2013
10408
69
0
Quarters
Source: Statistics and Economic Analysis, DAFF
3. SALES AT NATIONAL FRESH PRODUCE MARKETS (NFPMs)
The quarterly sales and average prices of avocadoes sold in the NFPMs during the period under
review are presented in Figure 3. A total volume of 5 900 tons of avocados were sold through the
NFPMs during the fourth quarter of 2013. Meaning out of the totally produced avocados, 57%
were sold through the NFPMs. The volume sold was 14.42% lower as compared to the previous
quarter (quarter 3, 2013) and 3.92% higher as compared to previous season at the same time
(quarter 4, 2012). The volume of avocados traded on the NFPMs is generally lower during the
fourth and first quarters because production volumes are also generally lower during this period.
Volumes traded at the local markets increase in the second and third quarters of the year in
response to increased production.
During the fourth quarter of 2013 avocados sold at the NFPMs reached an average price of R7
808 per ton. The price was 0.31% higher than the quarterly price of the previous quarter (quarter
3, 2013) and 10.64% lower than the quarterly price at the same time in the previous season
(quarter 4, 2012).
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Figure 3: Quarterly sales and prices of avocados at NFPMs
10000
7000
9000
8000
Volume in Tons
6000
7000
5000
6000
4000
5000
3000
4000
3000
2000
2000
1000
0
Volumes in Tons
Average Price (Rand/Ton)
Average price (Rand/Ton)
8000
1000
Q4
2012
5677
8738
Q1
2013
4638
7130
Q2
2013
6264
7090
Q3
2013
6894
7784
Q4
2013
5900
7808
0
Quarters
Source: Statistics and Economic Analysis, DAFF
4. EXPORTS AND IMPORTS
Quarterly export volumes and values of avocados during the period under review are presented
in Figure 4. The figure indicates that 1 038 tons of avocados worth R14.27 million were exported
by South Africa during the fourth quarter of 2013. The volume exported during the fourth quarter
was below the previous quarter (quarter 3 2013) by 71.94% and was 62.23% lower as compared
to last year at the same quarter (quarter 4, 2012). The volume of exports is mainly influenced by
external factors such as total domestic production, local demand, exchange rate as well as quality
of produce. The current drop in avocado production domestically during the fourth quarter led to
lower avocados volumes being exported. Although there were smaller volumes exported, the total
value earned was high by a staggering 4 385% as compared to the previous quarter (quarter 3,
2012) and this is mainly due to current weakening of Rand/Dollar exchange rate.
Europe again remained South Africa’s largest export destination for avocados during the fourth
quarter of 2013, absorbing almost 97% (992 tons) of the total tonnages exported in the same
quarter. The remaining bulk which is accounting for 3.5 %( 36.2 tons) of the total export went to
Africa.
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Figure 4: Quarterly exports of avocados
30000
400.00
Volume in Tons
300.00
20000
250.00
15000
200.00
150.00
10000
100.00
5000
0
Volume in Tons
Value in Rands (million)
Value in Rands (million)
350.00
25000
50.00
Q4 2012
2751
22.94
Q1 2013
1777
29.69
Q2 2013
24065
362.57
Quarters
Q3 2013
23247
0.32
Q4 2013
1038
14.27
0.00
Source: Quantec Easydata
Figure 5 illustrates the quarterly import volumes and values for avocados during the five quarters
under review. As can be seen on the below graph, during the fourth quarter of 2013 South Africa
imported 772 tons of avocados worth the value of R15.42 million after not importing any
avocados during quarter 2 and quarter 3 respectively. This was a 100% increase as compared to
last quarter (quarter 3, 2013) and 0.41% increase as compared to last year at the same quarter
(quarter 4, 2012).
A large share of avocados imported by South Africa came from Europe which accounted for 65%
and followed by Asia which accounted for the remaining 35%. Normally South Africa imports
highest amounts of avocados during the first quarter of each year. This means that one can
expect more avocados to be imported by South Africa in the first quarter of 2014.
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Figure 5: Quarterly imports of avocados
25.00
Volume in Tons
1200
20.00
1000
800
15.00
600
10.00
400
5.00
200
0
Volume in Tons
Value in Rands (million)
Q4
2012
768.899
14.47
Q1
2013
1300.802
23.33
Q2
2013
0
0.00
Q3
2013
0
0.00
Q4
2013
772
15.42
Value in Rands (million)
1400
0.00
Quarters
Source: Quantec Easydata
5. GROWTH, VOLATILITY & STABILITY ANALYSIS
Table 1 presents the results of growth and coefficient of variation estimations. They were
calculated using quarterly statistics and covered the same five-quarter period under review
beginning in quarter 4 of 2012 and ending in quarter 4 of 2013. The coefficient of variation is a
measure of volatility or stability. When the coefficient of variation is less than one, the variable in
question is said to be relatively stable, meaning that there were minimal changes. When the
coefficient of variation is more than one, it is said to be volatile, meaning there were major
changes during the period under review.
Table 1: Avocado industry growth rates & variation coefficients (Quarter 4, 2012 – Quarter
4, 2013)
Category
Producer price
Production
Sales at NFPMs
Export
Import
Subcategory
Price
Gross Value (GV)
Volume
Price/(GV)
Growth Rate (%)
0.41
5.60
5.17
-2.77
(value)
0.97
-9.45
-27.22
1.60
0.10
Volume
GV
Volume
GV
Volume
Coefficient of Variation
0.08
0.89
0.74
0.09
(price)
0.14
1.80
1.13
0.97
0.99
Source: Calculated from data from Statistics and Economic Analysis and Quantec Easydata
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As shown in the table above the avocado industry generally experienced mixed growth from
quarter 4 of 2012 to quarter 4 of 2013. The exports industry experienced a negative growth in
terms of both the volume and gross value while sales at NFPMs experienced a negative growth in
terms of gross value but a positive growth in case of volume. The gross value and volume of
imports, production and gross value of producer experienced a positive growth for the period
under review.
The table also shows various levels of volatility at different levels of the avocado industry’s
quarterly figures over the reference period. Low volatility was indicated by the coefficients of
variation that were less than one (<1). All variables with an exception of exports have coefficients
of variation that are less than one, meaning that they displayed minimal changes during the five
quarters under review.
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6. ACKNOWLEDGEMENTS
Acknowledgement is given to the following information sources:
Directorate: Statistics and Economic Analysis
www.daff.gov.za
Quantec Easydata
www.easydata.co.za
For more information contact:
Director: Marketing
Department of Agriculture
Private Bag X 15
Arcadia
0007
Tel: (012) 319 8455
Fax: (012) 319 8131
E-mail: [email protected]
Deputy Director: Commodity
Marketing
Tel: (012) 319 8072
Fax: (012) 319 8077
E-mail: [email protected]
Agricultural Economist
Tel: (012) 319 8069
Fax: (012) 319 8077
E-mail:
[email protected]
Website: www.daff.gov.za
www.webapps.daff.gov.za/amis
Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and
Fisheries for the purpose of detailing avocado industry. Anyone who uses this information does so at his/her own
risk. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with
regard to agricultural industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries
therefore, accepts no liability that can be incurred resulting from the use of this information.
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