U.S. avocado imports from Guatemala preparing for continuation amidst tariff challenges and holdups
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In San Miguel Dueñas, Guatemala, President Bernardo Arévalo recently declared that the booming avocado industry signifies a new chapter for the cash crop and rural development. Yet, six months after the U.S. greenlit imports, there's been no shipment from Guatemala to the States.
For years, Mexico has been the go-to supplier of imported avocados to the U.S., with a handful of South American nations contributing modestly. Guatemala aims to follow suit, leveraging its geographical proximity and European exporting experience to swiftly meet the rising U.S. demand.
Currently, there are 17,300 acres (7,000 hectares) of avocado plantations, but this number could surge to 75,000 acres (30,000 hectares) in the next decade, as per Francis Bruderer, the head of the Guatemala Avocado Producers Association.
Upon announcing import permission in November 2020, Guatemala's agricultural ministry estimated the country could initially export 1,700 tons and eventually reach 15,000 tons by 2030. Yet, the looming 10% tariff announced by President Trump this month for trade partners, including Guatemala, could affect these expectations.
Bruderer, with his own avocado orchard, affirms that more trees are being planted each year, making avocados the second-most cultivated crop in the country, right after rubber and African palm trees.
The new, state-of-the-art avocado packing facility, equipped with a heliport, is set to open in August. This venture by California-based Mission Produce has the potential to employ hundreds in Barberena, around 1 ½ hours south of the capital.
The facility marks Mission Produce's position as a leading entity in global avocado production. Steven Barnard, the company's executive director, calls the investment a strategic move to cement their standing as a world-class avocado supplier.
However, thePATH TO NORTH AMERICA'S AVOCADO MARKET is laden with hurdles. U.S. government approval for Guatemala's export protocols remains elusive. The agriculture ministry emphasizes the need for inspectors to ensure pest-free avocados are being shipped to the U.S.
Another challenge could be the proposed U.S. tariffs on imports, as Mexico's avocados currently don't face a tariff, giving them an advantage over Guatemalan exports in the competitive U.S. market.
In recent years, security threats, such as inspector assaults and extortion by organized crime groups, have surfaced in Mexico's avocado industry. Such issues could potentially arise in Guatemala as the industry matures.
The rapid expansion of avocado orchards could lead to deforestation and water scarcity—issues that have sparked concern in Mexico. As of now, there are no regulations governing water use for avocado orchards, but the agriculture ministry encourages big companies to adopt drip irrigation methods to optimize water resources.
The key to success for Guatemala's avocado industry lies in implementing good agricultural practices that not only yield high-quality produce but also protect the environment. The challenges are significant, but with determination and proper planning, Guatemala could carve out a niche in the lucrative U.S. market.
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Added Insights:
- Guatemala's avocado industry faces intense competition from established players such as Mexico, making it difficult for the Central American country to significantly penetrate the market (45% of content).
- Strict U.S. phytosanitary regulations, logistical challenges, and cost and efficiency concerns pose additional difficulties for Guatemala's avocado exporters (30% of content).
- A proposed 10% tariff on avocado imports could increase costs, reduce demand, and impact Guatemala's economic benefits, potentially hindering its efforts to diversify agricultural exports (20% of content).
- Security threats, deforestation, and water scarcity are issues that Guatemala must address in order to establish a sustainable and competitive avocado industry (5% of content).
- The avocado industry in Guatemala, while promising, faces intense competition from established players like Mexico in the lucrative U.S. market.
- Strict U.S. phytosanitary regulations, logistical challenges, and cost and efficiency concerns pose additional difficulties for Guatemala's avocado exporters.
- A proposed 10% tariff on avocado imports could increase costs, reduce demand, and impact Guatemala's economic benefits, potentially hindering its efforts to diversify agricultural exports.
- Security threats, deforestation, and water scarcity are issues that Guatemala must address in order to establish a sustainable and competitive avocado industry.
- To carve out a niche in the U.S. market, Guatemala needs to implement good agricultural practices that not only yield high-quality produce but also protect the environment.
