US importers look to Chile for avocados
The packing facilities in Michoacan, including the two facilities of Mission Produce and a plant of…The packing facilities in Michoacan, including the two facilities of Mission Produce and a plant of Calavo Growers, have been closed since October 29.
Despite negotiations, it is still impossible to predict when the collectors will be allowed to return to the orchards. A group of producers who demand higher prices from the packers have blocked access roads to the plantations. According to some US importers, if the situation continues, the industry won't be able to protect its customers, and eventually its consumers, from the consequences.
"I would say that the math is pretty easy because the system is running out of fruit," said Jim Donovan, vice president of global sourcing at Mission Produce, Oxnard, California, on November 8.
According to importers, the week of November 19 (Thanksgiving Day is on November 22) is key, as that's the moment in which there will be no more supply of this Mexican fruit in the United States, if the harvest isn't resumed, Donovan said.
Since the blockages have increased, US importers have taken steps to increase their supply. Between what is in transit and what has reached the main importers, importers could only guarantee a supply of approximately two weeks, said the representative of Mission Produce, adding that they are currently opting to cancel orders focusing on their most loyal customers, and purchase avocados from Chile. All in order to keep the market supplied.
"We're definitely running out of inventory," said Rob Wedin, the vice president of sales and marketing at Calavo Growers Inc., Santa Paula, California. On November 8, the professional estimated that by November 13 they will have dispatched all of their reserves of Mexican avocados.
And without a Chilean program, Calavo Growers won't complement its supply with other imports. He also said that Chilean exporters were sending fruit, but that they wouldn't be able to completely remedy the shortage.
The situation is extreme enough for Calavo to invoke force majeure, a legal measure that allows them to break agreements and contracted prices as supplies dwindle and markets increase, for the first time ever.
When will imports resume?
Wedin said that, once the harvest restarts, it will take a week before the supplies return to normal, even if the companies skip the maturation process, which saves 3-4 days. That is Calavo's plan, including other steps such as moving all imports in boxes for bulk exhibitions, avoiding the delays caused by bagging and other manipulations.
Donovan said the damage to the market remains to be seen, but when similar strikes occurred in 2016, Mission Produce had to regain the trust of some food service operators and retailers. Buyers require stability and reliability, he said, and rebuilding a program after a supply gap is harder to do if this has happened previously.
Source: SimFRUIT