Avocado and the High Cost of Protectionism

In Costa Rica since the government suspended imports of Mexican avocados in May 2014, the average wholesale price of the fruit went up by 19% in 2015 and 16% last year.

Thursday, February 9, 2017

Since the country stopped the imports of mexican avocados because of the alleged presence of the sunblotch plague, the price of this fruit in the local market has kept on rising. Although avocados are now imported from seven different countries, total imports have fallen 25% since then, and the average price has recorded since then an annual increase of 18%.

Nacion.com reports that "...The average wholesale value of a box of 10 kilos was ¢21,521 last year, compared to the average value of ¢18,604 in 2015.  In addition, the variation in the consumer price index (CPI) of this fruit indicates that, despite presenting fluctuations, the behavior is above the levels seen prior to entry of avocados from Mexico being blocked. 

"...The presence of foreign avocados fell from 11,651 tons in 2014 to 8,721 metric tons in 2016."

"... However Randall Benavides, president of the Chamber of Exporters and Importers of Perishables said domestic producers now have competition in avocados from seven origins, whereas previously it was only three. In the market there are now Hass avocados from Peru, Chile, Colombia and the United States, and there are Creole varieties from Nicaragua, Honduras and Panama, according to the Chamber."


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More on this topic

The Avocado Paradox

February 2018

Almost three years after the beginning of the restriction of avocado imports from Mexico, citing supposed phytosanitary issues, the Solis administration is now promoting exports of Costa Rican varieties of the fruit, while the local market suffers from shortages.

The Ministry of Agriculture and Livestock announced with great fanfare that it has started an advice giving program to a group of Hass avocado producers in Tarrazú, so that they can start to export the fruit to European countries.

Costa Rica: Disguised Protection of Local Avocados

September 2016

The delay in phytosanitation studies by the Ministry of Agriculture has stalled the process for starting imports of avocados from the Dominican Republic.

Even though it has been a month since the Chamber of Exporters and Importers of Perishable Goods asked to be able to start the process of importing avocados from the Caribbean island, a delay in carrying out a study on the part of the State Phytosanitary Service (SFE) has prevented this from happening.

Costa Rica: A Year Without Mexican Avocados

May 2016

As expected after any government intervention in a market, the price consumers pay for the product has increased and a black market has been created, encouraging smuggling.

And the Costa Rican State itself risks having to pay millions in compensation for convictions for failing to comply with the procedures established by the WTO after blocking imports of avocados from Mexico.

Avocadoes in Costa Rica: An Interfered With Market

April 2016

The ban on Mexican avocado has led to an increase in imports from Chile, raising its wholesale price by more than 30%, and will cause shortages when locally produced supplies have been exhausted.

Protectionism for the Costa Rican production of avocados introduced by the Solis administration, arguing phytosanitary measures, achieved results that benefited local producers, such as increasing the price of the product and a decline in import volumes (13,061 tons in 2013 vs . 11,187 in 2015). But what is good for the local producer, is bad for consumers who are forced to pay more for the fruit, as well as seeing their right to choose what to consume violated, and eventually being prevented from simply consuming anything at all because there is no supply.

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