Mexico Losing $8.5M a Day as U.S. Blocks Avocado Trade Amid Cartel Violence

The Mexican avocado industry could lose an estimated $8.5 million a day for as long as the United States continues a suspension it enacted Saturday night after a U.S. plant safety inspector "received a threatening call."

While Mexico's agricultural ministry did not touch on the affiliations of the caller, this message comes at a time when the Michoacán region, where avocados come from, faces an ongoing drug cartel turf war. U.S. agricultural employees have been threatened while working in the region in past years.

Mexican President Andrés Manuel López Obrador did not take kindly to the news, stating in a news briefing that the decision to suspend the avocado trade could be due to other outside interests.

"In all of this there are also a lot of political interests and political interests, there is competition; they don't want Mexican avocados to get into the United States, right, because it would rule in the United States because of its quality," López Obrador said in a news brief reported by the Associated Press.

While he did not explain those interests, re-establishing the avocado trading relationship would appear to be an economic priority of his administration.

Mexico's agricultural ministry reported that the industry exported 135,000 tons of the fruit from Michoacán over the past six weeks. With a 9-kilogram box of Hass avocados from Michoacán costing $26.23, according to Bloomberg, rendering a 1-ton shipment at $2,639, a six-week ban on the fruit would represent over $356 million in lost business.

Despite being the avocado epicenter of Mexico, Michoacán ranks as one the most dangerous states in Mexico and is listed on the U.S. State Department's "Do Not Travel" list due to concerns over crime and kidnapping. This violence has a major impact on the lives of the state's citizens and has resulted in an estimated 35,000 people fleeing the state, the AP reports.

López Obrador's "hugs not bullets" strategy that aims to address violent crime by funding social programs rather than army intervention has been met with mixed results. While the country saw a 3.6 percent decrease in murder between 2020 and 2021, extortion, rape and certain types of robberies saw an increase, newswire Agence France-Presse (AF) reported.

Francisco Rivas, who is the head of the National Citizen Observatory civil society group, told the AFP that the decrease in murder could be due to COVID-19 and social distancing rather than López Obrador's strategy, saying, "the reality is that Mexico is going through one of its worst times in terms of violence."