Green gold: Mexican avocados take off, thanks to increasing consumption and exports.

Reacting to rising demand worldwide, Mexican and international companies have focused on the world's main producer of avocados and the only part of Mexico that exports the fleshy, rich fruit, the state of Michoacan, in the country's central west. They are coming for a variety of reasons. Asians are eating more avocados, while the United States in January 2004 allowed imports to most of the country, excluding California, Hawaii and Florida.

In Japan, for example, Michoacan avocados account for 97% of the market, while in the United States the figure is 20%, a number estimated to rise considerably in the medium term. Mexican avocados were barred from the U.S. market for eight decades on the grounds that it could bring damage to U.S. crops by importing pests but in 1997 slowly began to make inroads. Current exports to the United States of 43,379 tons a year eventually could rise to 300,000 tons. In addition, avocado exporters expect to make sales to Europe, now dominated by Israel, South Africa and Spain.

Worldwide avocado output is 2.5 million tons, of which nearly a million tons come from Michoacan, the only place in the world where the Hass variety of the fruit is grown year-round. The state sends abroad on average 100,000 tons per year, mainly to the United States, Japan, the European Union and Canada, exports valued at US$180 million. As the global market increases, production should rise 30% in the medium term, although growers believe that if they invest in competitive technology in their orchards, that figure could hit 40% or 50%.

Currently, Mexican growers produce 10 tolls per hectare on average, according to Ricardo Javier Vega, vice president of the Michoacan Packers and Producers Association. "Unfortunately, very few producers have made the effort to increase productivity," says Vega. "I worry because in the long term we should be a very competitive country in terms of quality, and product cost in order to face up to global competition."

The popular Mexican sauce guacamole is one of the main forms in which the avocado now reaches global consumers, largely in Europe and the United States, according to Jorge Vega, general manager of packer Simplot, a subsidiary of the U.S. food company J.R. Simplot.

The Mexican unit of Simplot--a company originally built on popularizing the french fry among U.S. fast-food consumers--sells 28 mixtures and 46 presentations of guacamole with a shelf-life of up to 18 months to 6.100 Taco Bell fast-food franchises and to Marriott Hotels, among others. Just under 85% of the unit's sales go to the United States, while the rest is sold to Europe, Russia and the United Arab Emirates. The company, which registered $12.5 million in sales in 2004, expects to grow 5% annually in the coming years.

"We have very high expectations of processed goods, now that the avocado is the leading fruit, one which combines with many dishes and offers first-rate nutritional value," says Vega. "Mexican food has penetrated very well, and we believe that guacamole is indispensable in terms of Mexican cooking."

Open. Another company emboldened by the promise of Mexican avocado exports is Del Monte Grupo Comercial, a unit of U.S. food giant Del Monte Fresh, which started Mexican operations in January 2004, in Uruapan. "We saw a huge window of opportunity and decided to open here in order to make ourselves the major exporter of avocados," says Eduardo Gonzalez, Del Monte operations manager. The company now exports only fresh avocados, but this year expects to open a plant to process and pack the fruit. It now exports just 0.5% of Michoacan production but expects that figure to rise to 10% in the medium term.

Over time, industry sources say, foreign and domestic prices should balance, given the trade deals signed among Canada, the United States, Mexico and Chile. Selling more avocados abroad, meanwhile, won't damage the domestic market. Rather the opposite, says Joaquin Barragan, president of packer San Lorenzo, the first company to export avocados to the United States, in November 1997. "The domestic market has a lot of supply, so there won't be any problems meeting [foreign] demand," says Barragfin. "It would be a relief."

MARISOL RUEDA

MORELIA, MEXICO