How to invest in the rich avocado export business

BY MAUREEN AKINYI:The avocado export business is one of the richest farming ventures you can invest in.

Last year, 2018, though, the Agriculture and Food Authority through the Directorate of Horticulture banned avocado exports following a severe shortage that has sharply raised prices of the fruit.

During the low season, a visit to a city market in Nairobi will reveal that a single piece of avocado is selling at Sh50 to Sh80, while in 2017 it was Sh20.

According to the Directorate of Horticulture, the rise in prices is due to a biting shortage of popular varieties, Fuerte and Hass, which are off-season. The Authority has stated that the ban will be lifted in March when the next produce is harvested.

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With this current reality, from a potential investor’s view point, it seems like avocado has an insatiable demand more so the export market? The question that begs is how lucrative is this avocado market and is it worth the gamble?

“Yes, avocado farming has a huge potential. But I must caution that the money is in the export business. For the domestic you really have to do your research well, to get a constant and sustained market. But if you are looking to export, as long as you have links to a reputable export firm that you have signed a contract with an they have agreed to take your avocadoes for on the long-term, youare as good a millionaire,” Grace Mureithi-Korir, a crop expert and a lecturer at the University of Nairobi says.

The numbers reflect the huge potential in avocado export business. Statistics from the Agriculture and Food Authority show that avocado contributes seven per cent of Kenya’s total fruit export to the global market. About 387.2 tonnes worth Sh5.4 billion was exported in 2016, compared to 461.1 tonnes worth Sh7.1 billion last year as per AFA data.

To make a kill in the export business, it is incumbent for an investor to enter into the business as a group as opposed to as an individual farmer. In as much as avocado for export is a profit making venture, Ms Korir warns farmers who want to pump their money into it. “I must warn interested investor that though this is a lucrative venture, it is a risky affair because of the many cons who flooded the market in the name of export firms,” she cautions.

To avoid falling into such costly traps, she advises interested investors to do thorough research before signing contracts with potential export firms. “Before you enter into a contract with a supposed export firm, you must do a thorough due diligence. The challenge out there is that there are so many export firms and most of them are fake. So first, I would advise an investor to do background check on the export firm.

Do your homework and get in touch with farmers who are already working with the farm. Ask them what their experience has been with this export firm. Ask them how consistent and loyal the firm has been when it comes to payment. That way you save yourself the headache of entering into a deal with a dubious export firm,” she cautions.

For farmers interested in growing avocados, she points out that the ecological climates that do well are the warmer regions.

In Kenya, areas that avocados thrive include Embu, Meru and Kisii which happen to be the largest producers of the produce for export and domestic market. Bomet and Narok are also picking up.

Apart from this feature on avocado export business, you may visit our sister site Newsday Kenya