Lusaka Avocado Multipurpose Cooperative (LAMC) says the finalisation of the deal which will see the cooperative supply hass avocados to Algeo SRL, an Italian company has been delayed by the Covid-19 pandemic because the company representatives could not travel to Zambia due to the Omicron variant which badly hit Italy.
LAMC Secretary John Chowa said the two parties are likely to finalise the deal before the end of the first quarter, including the price at which the company will be buying the avocados adding that the price will be better than what local buyers are offering.
Speaking in an interview with the Zambian Business Times – ZBT, Chowa said local buyers are paying between K5 and K7 per fruit. He explained that the cooperative projects a production of about 300 tonnes in 2022, 600 tonnes in 2023, 2,000 tonnes in 2024, 7,000 tonnes in 2025, 18,000 tonnes in 2026 and 26,000 tonnes in 2027.
Chowa told ZBT that the cooperative might be able to produce almost double the projected production going by the overwhelming response that has been received from the farmers. He said the cooperative was supposed to supply the trial shipment in March 2022 but that has been delayed by the failure to conclude the negotiations as well as farmers not having enough avocados which are ready for consumption.
“The avocados will only be ready end of March and going forward which has given us enough time to finalise the pricing.We are asking a lot of farmers to join us because there is a huge market for avocados. We hope to exceed this projected production and start selling to other buyers”,he said.
He said the cooperative will engage government to see if it can provide aggregation centres adding that most of the farmers who are ready to supply the avocados are in Lusaka. Chowa added that the cooperative will soon revisit and confirm with the farmers to ensure every farmer will produce the agreed quantity and quality of avocados.
The cooperative signed an export deal in 2021 to start supplying hass avocados to the Italian Company worth about US$29 million and the company expressed interest in acquiring 960 tonnes of avocados every month at a cost of US$2.4 million dollars, which translates to about US$29 million per annum.
The cooperative received a letter of intent from Algeo SRL of Italy on 26 July 2021 in which the company expressed its desire to procure 960 tonnes of hass avocados monthly from LAMC.
Algeo SRL wanted to acquire a trial shipment of 20 – 40 tons of avocados last year but the cooperative was unable to provide that quantity, as it was not the avocado season for the country.
Chowa noted that there are many avocado plantations coming up with some maturing this year and others in 2023, therefore the cooperative will be able to supply the avocados this year, adding that the company has allowed the cooperative to supply the quantities that they are able to supply until a time when they can meet the 960 tonnes demand.
He has urged more avocado growers to come on board, as there are more buyers interested in buying avocados and the market is unlimited. The cooperative is recruiting interested farmers and there has beenoverwhelming response in not only Lusaka but also other provinces too adding that there are provincial cooperatives who affiliate to the national cooperative.
“The various individuals will be taking their avocados to their various provincial cooperatives then we will aggregate as Lusaka”, he said. He mentioned that the price of avocados is dependent on the quality and where the avocado is coming from and countries known to produce high quality fruits have prices as high as US$5 per kg.
He said Kenya has prices as low as US$1.7 with other countries’ prices ranging between US$3 and US$5. Chowa explained that due to the high demand for avocados in Kenya, farmers have been harvesting premature fruits before the dry matter content reaches the required 21% and this leads to price reduction, as buyers are not certain about the quality of avocados they are buying.
This development is one of the key milestones that was arrived at during the business-to-business meeting facilitated by the Zambia Development Agency (ZDA) that was held on 23 July 2021 between the LAMC and Algeo SRL of Italy to discuss areas of collaboration in the production and marketing of hass avocados.
The receipt of the letter of intent by LAMC from Algeo SRL mandates LAMC to commence the process of fulfilling key conditions that will ultimately lead to the eventual signing of the contract between LAMC and Algeo SRL.
