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Waiting for cheaper avocados? Keep waiting

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Avocado fans seeking a break from record prices are set to be disappointed.

[CHICAGO] Avocado fans seeking a break from record prices are set to be disappointed.

Prices of the dark-green fatty fruit, featured on nearly half of US menus and used in everything from toast to tacos and salads, are expected to continue rising until Mexican farmers begin harvesting later this summer.

The price of Hass avocados from Michoacan, the heartland of the Latin American nation’s output, jumped about 7 per cent to a record 650 Mexican pesos (S$46) for a 10-kilogram box on Wednesday, according to government data based on daily surveys in Mexico City’s Central de Abastos, the capital’s bustling wholesale-produce market.

AvoPrice, a platform to monitor prices in real time, recorded a rate of more than 100 pesos per kilogram on Wednesday for avocados bought directly from Michoacan growers.

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The market has surged the most in at least a decade this year due to rising trade and border tensions between the US and Mexico, the biggest avocado producer and America’s No 1 supplier. A smaller crop in California has also helped the advance.

"It’s the shortage," Michoacan-based producer Humberto Solorzano said of the higher prices.

"The current season is ending this week and the new season begins next week."

What’s more, the early signs from avocado trees that are just blooming have not been promising, said Mr Solorzano, who is also a founding member of AvoPrice.

Without a futures contract, the avocado market can be relatively opaque.

Supplies should remain relatively tight until mid-July, said David Magana, vice president and senior analyst at Rabobank in California.

“We will see higher prices for the next two to three weeks,” he said by phone.

BLOOMBERG