Mexico’s drug wars drive up avocado prices Business

Avocado prices hit their highest level in more than two decades after the fruit was caught up in escalating violence between drug cartels in Mexico.

Last month, the United States imposed a temporary ban on shipments from the western state of Michoacan, the country’s largest source, after threats were made against a US factory safety inspector.

Producers have since scrambled to catch up, and Mexico’s total production is expected to fall 8% in the current crop year from its record high of last year, according to the U.S. Department of Agriculture.

This has pushed the price of Michoacan avocados up 81% this year to 760 pesos (£29) per 9kg box – the highest official record dating back to 1998.

The jump comes as food producers are already feeling the pressure of higher material and energy costs that have driven up prices on supermarket shelves.

David Magana, an analyst at Rabobank, told Bloomberg: “Lower availability and supply-side inflationary pressures are prime suspects.”

Mexico, the world’s largest exporter of avocados, accounts for more than 80% of the avocados consumed in the United States.

As the UK relies on other sources for the fruit, including Peru, Chile and Israel, pressure on Mexican supplies threatens to drive up prices globally.

Avocados, used to make guacamole, have grown in popularity in recent years and have become synonymous with millennial trends.

Consumption in the United States has more than doubled since 2010 to about nine pounds per person, according to Rabobank.

The increase in demand has created a lucrative market in Mexico, where avocados are often called “green gold”.

However, the influx of money has fueled conflict in Michoacan, where farmers have reportedly been forced to take up arms to defend themselves against drug cartel attacks.

Last month, US officials announced a ban on imports from the country after a threat was made against a US inspector.

Few details of the incident have emerged, although Mexico’s agriculture department said the official received a threatening phone call on February 11.

It came just before the Super Bowl, one of the biggest selling events in the industry, as Americans traditionally eat guacamole while watching the game.

Although the ban was lifted soon after, violence has continued to escalate in the region as rival cartels fight for control of major drug routes.

Earlier this week, 20 people were killed following a shooting in Las Tinajas in one of the worst shootings in years.

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This notice was published: 2022-03-30 05:00:00

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