MARKET REPORT

WEEK 49

Change in our industry seems to be inevitable. Three to four weeks ago we predicted that a slower than expected period of export activity during October and November would culminate in a huge lift of incoming domestic volumes once the Australian market cleared and export activity increased. Whilst this has happened to some extent, we have not seen anything like the anticipated local market volumes particularly in the Class 2 category packed in retail format. 

Erratic weather, spectacularly irregular maturity, early fruit drop and high levels of skin blemish have all impacted a steady flow of domestic fruit. A consequence has been that more fruit has graded into the Class 3 category than expected. 

From a marketing standpoint we will see further impacts as an already short supplied local-market endeavours to meet its pre-Christmas promo/advert commitments. This will further curtail available stocks, but will create demand as we head into the back-end of the export season. 

Pricing this week is foreshadowing the benefits of the promo/advert created demand. We have traded good volumes at stable and sustainable values. With more promo/advert activity planned next week we will see some pricing variability but overall solid values. 

Four to six weeks ago the belief was that there would be large volumes of Class 2 domestic fruit to sell and consequently programmed promo/advert activity was negotiated to allow for the movement and clearance of the looming volume. With the anticipated volume now somewhat diminished on expectation, it is incumbent on marketers to support these planned programmes – like a marriage this is one of those “for better or for worse” situations! 

Some critics have suggested we pull out of the market and reduce supply at times like this. I have a pretty simple response to this….. New Zealand retailers have given huge support to both marketers and growers which has resulted in sustained growth both in volume and value. This growth is simply a result of retailer support and encouragement for consumers to purchase quality fruit at fair value. I note discussion from several other horticultural sectors about supermarkets tending to drive values down. I am very strongly of the view that the avocado industry is extremely fortunate in the way our large retail partners work closely with our industry, listen to our advice and support the category both during and outside periods of promo/advert. 

Our view is that demand will continue to be positive. Non promo/advert orders remain very strong and this will be aided by the on-set of the summer holiday period. 

Our prediction for per tray equivalent values at cool-store door are below. 

Prices may not always accurately reflect your returns as stock may be held over pending sale or as the market dictates. Prices are subject to change based on daily market conditions. Packing/Packaging costs should be deducted from these prices.