In the world of avocado exports, South Africa is making significant strides, and agricultural economist Samkelisiwe Ngwenya has provided valuable insights into the industry’s dynamics. In collaboration with the National Agricultural Marketing Council and utilizing a modelling tool developed by North West University, Ngwenya presented the annual value chain analysis of avocados.
This analysis sheds light on South Africa’s position as one of the top 10 avocado exporters globally, highlighting the country’s export-oriented avocado industry.
In 2021, the Netherlands, the UK, and Russia emerged as the primary recipients of South African avocados, collectively accounting for a substantial 85.5% of the country’s avocado exports. The notable absence of South Africa among the top 10 avocado producers underlines the industry’s export-driven nature.
However, a concerning trend has emerged with limited market diversification in avocado exports, primarily centred on the European Union (EU). This dependence on a single market, combined with seasonal overlaps with competitors like Peru, poses a significant challenge to the South African avocado industry’s stability. Ngwenya’s findings have highlighted potential areas for growth in avocado exports.
The EU and EFTA states, including the UK, offer promising opportunities, with South Africa enjoying preferential tariff rates of 0% in these regions. Despite competition from Central and East African countries, South Africa’s avocado volumes continue to grow exponentially.
To reduce dependency on the EU, Ngwenya pointed out promising future markets for South Africa, including the United States, Canada, Japan, and China. While the USA presents challenges due to Mexico’s dominance, South Africa’s counter-seasonality and AGOA preferential market access could provide a competitive edge. Negotiations with Japan are progressing positively, potentially opening new doors for South African avocados.
China represents an exciting prospect, thanks to a newly signed protocol. However, a 25% tariff on South African avocados could limit market penetration compared to zero-tariff markets like the USA and Japan. Canada, with fewer market access challenges, remains underexplored due to freight expenses.
As South Africa navigates the global avocado market, it will require strategic planning and continued efforts to seize these promising export opportunities.