Mexico’s avocado ban: Prices will rise as trade tensions rise

The United States has temporarily suspended all imports of avocados from Mexico following a verbal threat to US security inspectors.

The following experts from Cornell University are available for interviews on how the ban may impact the supply of avocados and prices for consumers, as well as how the current climate between Mexico and the United States could cause new trade tensions.

miguel gomez

Associate Professor of Applied Economics and Management

miguel gomez, Professor of Applied Economics and Management at Cornell SC Johnson College of Business, is an expert on global food supply chains and food value chains. Gómez says the suspension of avocado imports from Mexico is already causing huge disruption in the United States and he predicts that prices will rise in a few days. Gomez is also available for interviews in Spanish.

“The suspension of avocado imports from Mexico is causing huge disruptions in supply chains to US markets. Mexico is the source of more than 80% of the avocados consumed in the United States during the January-March period. During this period, Mexico reaches its peak of production. The remaining supply comes from domestic sources (southern California) and imports from Chile, the Dominican Republic and Colombia. Chile is increasing its shipments to the United States, but the volume is quite insufficient to compensate for the lack of Mexican avocados.

“With no clear idea of ​​when the import ban will be lifted, I expect prices to rise significantly in the coming days and there will be shortages of avocados in many parts of the country. Prices will start to fall and supply will become more normal when Peru – the world’s second largest exporter – begins its harvest season in April.

“In the long term, Mexico’s reputation as a supplier of avocados could be affected in the future, given the social problems that exist in the primary production regions. Small and medium avocado growers in Mexico are likely to be the most affected. »

Desiree LeClercq is a professor of labor law at Cornell’s School of Industrial and Labor Relations and an expert on labor provisions in trade agreements. She says that given the current climate, we could see Mexico continue to obstruct US investigations that will force the United States to balance its inspection priorities with its consumption demand.

“More recently, in particular, but not limited to, the USMCA, the United States has increasingly controlled and inspected the production of goods in Mexican factories, and the Mexican government has accepted this intrusion as a condition needed to access US markets.

“The current aggressive climate may reflect Mexican employers’ frustration with US dominance and presence in their factories. We could see more action in Mexico to obstruct US investigations or otherwise show displeasure – which would then force the US to balance its inspection priorities against US consumer demand.

“In some situations, like America’s love affair with the avocado toast, the United States’ decision will be difficult – although agencies will likely always prioritize staff safety, as is the case here.

“In other situations, such as the recent GM union elections in Mexico, the potential banning (or removal of trade preferences) of a competing product may be welcomed by US voters, especially import competitors.

“I think we’ll see more of these clashes as America’s grip on Mexican production processes tightens, and I think American sentiments will fluctuate depending on whether they’re buying avocado toast at brunch. or that they support unionized workers at a Wisconsin automaker.”

Cornell University has dedicated TV, ISDN and Skype/Google+ Hangout studios available for media interviews.

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