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The Trump effect and the guacamole dip

The star player in America’s biggest sporting event risks being benched: guacamole.

Every year before the Super Bowl, demand soars for the avocado-based dip that has become a staple for viewing parties for the National Football League championship game, which has emerged as the second-largest day for food consumption in the US after Thanksgiving.

This year’s supply was threatened by a spike in avocado prices late last year after growers’ strikes in its largest exporter, Mexico. Growers insist supplies are back to normal. “There will be enough for the Super Bowl,” says Maggie Bezart-Hall with Avocados from Mexico, a promotional body.

But the industry worries this year’s game on February 5 may be the last to see an easy flow of supplies across the southern border. Donald Trump has vowed to renegotiate the North American Free Trade Agreement, threatening new tariffs against Mexico, which supplies more than 80 per cent of the US market.

Last year Mexico shipped a record 278m avocados in the run-up to the Super Bowl, to be consumed with 1.3bn chicken wings, millions of takeaway pizzas and innumerable nachos. This year avocado supplies will be at a similar level, says Ms Bezart-Hall.

Thus far, Mr Trump’s tough rhetoric has been a boon to Mexican growers, sending the peso tumbling to record lows and reducing prices for US importers. But farmers say they are far more concerned about what is to come.

“People are worried,” said Enrique Bautista, the son of a farmer who produces avocados on some 100,000 hectares in Uruapan, in the western state of Michoacán. “[Mr Trump has] talked about a tariff of 35 per cent on imports from Mexico, China, Japan and others, without specifying if that was exclusively manufactured goods.”

Until Nafta negotiations began, Mexican avocado exports to the US had been banned since 1914 due to the presence of avocado seed weevils. The import ban was lifted in 1993 in the run-up to the trade agreement when the US allowed the first shipment of fresh Mexican avocados to Alaska. Since then, the market has gradually opened, with Mexican exporters gaining full year-round market access to the US in 2007.

The increased availability from Mexico has boosted US consumption, which doubled in a decade to 2015, totalling more than 2bn lbs. Consumption per person jumped from 1.4 lbs in 1990 to 6.9 lbs in 2015. Mexican imports, which accounted for a mere 11 per cent of US consumption in 1990, now account for 82 per cent, according to the US International Trade Commission.

Because of their growing dominance in the American markets, Mexican producers warn that any trade obstacles would have a sharp impact on US supplies, making guacamole a scarce — or pricey — commodity for the 2018 Super Bowl.

Workers of the San Lorenzo Packing Company check and fill boxes with avocados that will be shipped to US in the state of Michoacan, Uruapan, Mexico

“No other country can supply such quantities. If the Trump administration puts up obstacles, there will be lower supply that no one else can cover, and higher costs,” says Ramón Paz, strategic adviser at Apeam, the Mexican avocado producers and packers association.

The impact of any protectionist measures by the incoming administration would have a far bigger impact on Mexico, however. Of the country’s 20,000 avocado farmers who export, 75 per cent are very small producers with less than five hectares each. The industry also generates 70,000 direct jobs in Mexico.

Celso Castillo, global sales manager at Promega, a small Mexican-owned avocado exporter, said that if Mr Trump decides to impose “some sort of tax” on agricultural imports, price rises would simply be passed on to US consumers “so it wouldn’t be very smart”. Mr Castillo says that if the US market contracts, Mexican growers would have to find alternative markets, such as China.

The Apeam says higher prices would hurt US growers as well, arguing that increasing American appetites for guacamole has helped boost demand for domestic avocados, as well. The value of total US production increased 71 per cent between 1990 and 2015, according to the USITC.

Finding alternative markets is not as far-fetched as it may seem. China’s imports quadrupled in volume between 2014 and 2015 — albeit from a very low base — making it the 12th-largest importer.

Nicolaus Vorwerk of Agora America, a German importer of specialty food from Latin America, says European demand for avocados has been steadily increasing, thanks to increased interest in healthy eating as well as the rising popularity of Mexican food, especially in countries such as the UK. He has recently sent containers of the fruit to China for consumers to try. “Everybody was delighted. [Chinese consumers] really liked the taste,” he says.

Still, Europe has no Super Bowl. Despite the uncertainty, Mr Castillo expects guacamole will continue to remain an NFL staple. “I’m confident that the Mexican [avocado] market won’t be the primary target of Mr Trump’s campaign against Mexico,” he says. “He seems to be training his artillery on the industrial sector, not food.”

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