Kenya's Avocado Sector: Growing Fast, but Still Growing Up
During the last decade, the avocado market has been booming globally – the EU market has even tripled – and Kenya has increasingly been able to reap the fruits of this trend. Kenya’s avocado production area and exports are growing quickly, but further improvements along the complete supply chain are needed in order to improve product quality, tackle rising international competition, and open up new markets outside of Europe.
Large Production Area With Small-Scale Producers
Kenya is a significant producer and exporter of avocados. According to the latest official FAO statistics, Kenya is currently the world’s seventh largest producer of avocados, with planted area at nearly 15,000 hectares and production at 234,000 metric tons in 2018. Mexico leads the global rankings with 2.2m metric tons of production, followed by the Dominican Republic with 644,000 metric tons (over 90% of which is absorbed by the domestic market), and Peru with 505,000 metric tons. Avocado production in Kenya is still dominated by backyard trees, mainly for personal consumption. The commercial production area is estimated at about 7,500 hectares, with marketable production fluctuating between 60,000 and 90,000 metric tons.
Kenya Reaching Record-High Exports in a Challenging 2020 Market
Kenya’s avocado exports this year are estimated at a bountiful 80,000 metric tons (see Figure 1). Nearly 60% of these exports are directed to the EU (mainly the Netherlands, France, and Spain), but the UAE, Russia, Saudi Arabia, UK, Egypt, and Turkey are also significant markets. Kenya’s avocado exports peak in the northern hemisphere’s summer season, when Peru is the main competitor during part of the season. As Peru is very dominant in the EU market during the summer, prices are mainly set by Peru’s export volumes. Summer season prices are usually lower compared to prices in the winter season, when Chile dominates, though Mexico and Colombia are gaining market share. Prices in the European market this year were at particularly low levels during June, July, and August, mainly due to record volumes arriving from Peru, South Africa, and Kenya (see Figure 2). The impact of Covid-19 seems to be limited, as European retail sales held up pretty well during the pandemic, as far as sporadic consumer panel data shows.
Toward the Next Level
Kenya’s avocado business is rapidly developing. Exports have doubled in only five years’ time, and planted area is expected to grow by around 1,500 hectares a year in the coming five years. This means that commercial production will grow at an even faster pace, as the structure of Kenya’s avocado sector is transforming. For many years, production was controlled by a few packers working with countless smallholder farms, often with only a few trees. As a result, quality levels and yields, as well as waste, were highly unstable. In the last few years, new players have entered the business. Companies active in tea, floriculture, and other horticulture crops have planted avocado trees in medium-sized orchards (30ha to 100ha) in order to diversify their business. These orchards usually have strong technical management and efficient irrigation systems, and are located in areas with favorable growing conditions. This will bring Kenya’s production and quality to a (much needed) higher level.
Other areas of improvement include: the diversification of the export portfolio; the reduction of Kenya’s dependence on the EU; NGO and state support of smallholder farms, for example via subsidized distribution of seedlings; and the recent foundation of the Avocado Society of Kenya. If successful, this society will promote cooperation and knowledge exchange among members, and push efforts to gain access to new export markets. Support is needed to train smallholder farms on crop management, the right harvesting moment, management of disease pressures, incorporation of sustainable growing practices, and the use of improved or high-quality seedlings and/or rootstocks. More downstream in the supply chain, there is much to gain from processing lower-quality or wasted products (for example into avocado oil) and improving logistics. The availability and rates of shipping lines are a major challenge for Kenya’s avocado sector
No Time To Relax
The transformation of Kenya’s avocado industry toward higher-quality fruit and more efficient logistics is absolutely needed in the long term. To compete in international markets, quality should be on par with other competing avocado sources. And, if production is growing at 1,500 hectares a year, it is essential to open up new markets. The global avocado consumption boom has not yet come to a standstill, nor has the global expansion of production. The European market will reach maturity over time, and global markets will become more competitive. Asia still has huge market potential, but this seems easier said than done. China’s and Hong Kong’s avocado imports totaled only 36,000 metric tons last year, versus over 1m metric tons imported by the US and 600,000 metric tons imported by the EU. For a while now, Kenya has been in the process of gaining market access to China, but this has only been granted for frozen avocado products. Increased joint efforts are needed to improve quality, improve reputation, and gain access to a wider range of markets around the globe.
Where to go from here
Cindy van RijswickSenior Analyst - Fruit, Vegetables, Floriculture Read more