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Dominican avocado: big potential unexpressed in the international market

  • Dominican avocado: big potential unexpressed in the international market

    by Market Insider

    Tuesday, 19 Jan. 2016

    The avocado is an integral part of the Dominican Republic landscape, putting the country among the world leaders in terms of quantities produced. It enjoys good climatic conditions and high local consumption; however its export performances are still well below the level that could be expected, with annual volumes stagnating at around 20.000 tonnes for the past decade.

    As astonishing as it might appear the Dominican Republic is among the world’s top avocado producing countries. The production estimates vary greatly between sources but, according to the FAO, avocado production went from 288.700 tons in 2010 to 387.500 tons in 2013. The national data mentions that surface areas doubled between 2002 and 2006, from 10.700 ha to 22.100 ha and continued to expand, though at a slower rate in the following decade (42% between 2006 and 2015). In 2013, the Ministry of Agriculture calculated the production cost at between 830 and 1.660 Euros/ha; various local studies point yields among the highest in the world, at 12 to 15 tons/ha.

    The commercial plantations vary greatly in size, from a few hundred trees to a few hundred thousand. The produce is sourced from a multitude of farms, 87% of which covering less than 6 ha. Only 4% can be considered large scale, with a surface area in excess of 30 ha while 9% are medium sized with 6 to 30 ha. Certified organic avocado production is very small, with only 117 ha in 2012. According to the Ministry of Agriculture the avocado production is of direct benefit to 15.000 families and 400.000 people creating direct and indirect jobs.

    While big production groups can be counted on the fingers of one hand, there are two dominant groups, one of which produces Hass and processes it. There are partnerships with US companies among Dominican producers and/or exporters and a Spanish group has recently also invested in the production. A regional avocado cluster was created in 2005 in the main production zone. In 2009 it was granted US funds as well as other sources thereafter for its development, in particular for collective GlobalGap certification funded by the European Union. The programme was still running in Q4 2015 and has a packing station equipped with refrigeration available on a service provision basis for its members. It has just about one hundred members, the smallest cultivating a quarter of a hectare and the biggest approximately 100 ha.

    The first commercial plantations in the Dominican Republic emerged in the north of the country from creole cultivars reproduced by sowing; from there, the avocado spread across the country and can now very often be found in yards where it is appreciated for its generous shade.

    Bigger organised plantations developed thereafter based on grafts of tropical varieties selected in Florida and Puerto Rico. Although the avocado grows right across the country, the bulk of marketed production is currently based in three zones: in the centre, in the south/south-west of the country as well as in the northern provinces which are rainier and therefore more prone to anthracnose. The 2006 survey divided the orchards into practically equal parts between the three zones, with the Northern provinces dominating slightly. Hass has been planted in the west of the country where the altitude lends itself favourably to its development (zones of 1.000 m and above). It is cultivated by two only producers.

    The Dominican Republic sells nearly exclusively smooth skinned tropical avocados, fairly large in size (570 to 630 g per unit for Semil 34 usually exported to the United States) but there are hundreds of avocado varieties in the Dominican Republic. Nonetheless, for reasons of productivity, organoleptic quality and transportability, only about twenty varieties have been developed for export. Semil 34 (a West Indian-Guatemalan hybrid) is by far the most widespread variety, with approximately two-thirds of planted commercial surface areas, followed by the creole, Choquette (a West Indian-Guatemalan hybrid), Carla, Pollock (derived from enhancing the West Indian breed), Lula (a Guatemalan-Mexican hybrid) and Booth 7 and 8 (West Indian-Guatemalan hybrids).

    According to the local literature and the producers, Hass surface areas cover around 3.000 ha. In the absence of local consumption, exports (2.500 tons of on average to the United States) are merely a pale reflection of these areas, whereas exports could be ten times higher to reflect the production volumes. Could an exponential increase in Hass availability be expected in the near future? Nothing could be less certain.

    Roughly speaking, there are two harvest periods, distinguished by variety and production altitude: under 400 m above sea level and for the early varieties, the harvest is carried out during the summer months (June to September) whereas above that and for the late varieties, it is an autumn and winter activity instead (October to March).

    The domestic market absorbs more than 90% of the production: the avocado is widespread in the Dominican diet, with consumers favouring by far creole and West Indian varieties for their sweetness (Hass is not found on the stalls); the internal market represents a population of nearly 10 million inhabitants to which can be added approximately 4,5 million tourists per year.

    In September 2015 the fruit was selling in Santo Domingo at 50-55 DOP per piece (approximately 1.00-1.10 Euro) in supermarkets, 25-30 DOP (approximately 0.50-0.60 Euro) in the street and 10-15 DOP (approximately 0.20-0.30 Euro) outside Santo Domingo (rural areas and other towns close to production centres).

    For around a decade, the annual exports of the Dominican Republic have maintained a level between 17.000 and 21.000 tons of the tropical varieties and, for the vast majority, Semil 34. The country is firmly focused on the United States, its natural neighbour market and number one economic partner. New York and Florida have a large immigrant Dominican community (several millions) and more widely the product is targeted to the Latin American and Hispanic community, which are heavy consumers of tropical avocado. The United States has absorbed on average 82% of export volumes over the past ten year. Puerto Rico receives 15 to 25% of volumes bound for the United States and represents the number 2 outlet.

    Closely analysing the US imports of Dominican avocado, Hass and similar varieties represent only small quantities compared to the tropical varieties, rarely exceeding 15 to 17% of the total exports, i.e. 2.500 tons per year approximately. The US Hass Avocado Board, for its part, announced even lower figures: according to this source, the volume has exceeded 2.000 tons only twice in the past ten years, with 2.850 and 2.770 tons, respectively in 2008 and 2009.

    Europe remains a clearance market little exploited by Dominican exporters; the Netherlands, France and the United Kingdom are well behind the United States. Besides the unfamiliarity of Dominican producers and exporters with Europe, the avocados from this source, despite their taste quality, are unsuited to European demand which is dominated by Hass. Furthermore, the distance counts against the tropical varieties which are more fragile and delicate in transport and storage. Consumed primarily during holiday periods in Europe, these avocados must reach the shelves still very firm, which does not facilitate the task of the exporters and frequently imposes the transport by air-freight. Some light flows are aimed at the Caribbean: Saint Martin, Guadeloupe, Martinique, Trinidad and Tobago, etc.

    There are about ten exporters in the Dominican Republic, some of which are also producers; the sector leaders can be counted on the fingers of one hand and include the two main production groups. The market expansion perspective for this fruit refer for now to the possibilities to sell locally (though what is the market absorption capacity?), regionally in the Caribbean (here too, the island markets are not so expandable) or even on new markets such as Canada.

    Source: Fruitrop

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