Mexico, the world’s biggest exporter of avocados, is currently seeing the highest prices for the fruit since 1998.

A price index of avocados in Michoacán, Mexico’s biggest avocado-producing state, shows that the cost of the fruit has surged 81% this year to 760 pesos (almost US $38) for a 9-kilogram crate.

David Magaña, an analyst at financial services company Rabobank International, said two factors had caused the price jump: fewer avocados and inflation.

It’s believed that Mexican avocado production declined 8% in the 2021–22 agricultural year, following record harvests in 2020–2021 recorded by the United States Department of Agriculture.

Mexico’s farmers account for more than 80% of the avocado consumed in the United States. Such huge demand has made the fruit’s production here so valuable that it is often termed “green gold.” Per capita consumption of avocados in the U.S. has more than doubled since 2010 to more than 4 kilos, according to Rabobank.

The other half of the higher price equation is inflation: Mexico’s rate hit 7.29% in the first half of March, while U.S. inflation hit 7.9% in February, a 40-year high.

The largest U.S. avocado distributor, Mission Produce, has raised its prices by 50%. The company’s executive director, Steve Barnard, said international competition for the highly prized fruit had kept its cost high.

“Partially offsetting price gains was an 18% decrease in avocado volume sold, which was primarily driven by lower supply, but [it was] exacerbated by price sensitivity in select international markets that competed for lower-cost sources of fruit,” he said in Mission Produce’s first-quarter earnings report.

In California, which supplies about 15% of U.S. demand, production is forecast to increase this year. However, Magaña said that California’s production levels were “clearly not enough to meet the growing demand for avocado in the United States.”

The shortfall in avocado production is more bad news for Mexican producers and U.S. distributors: the U.S. government suspended imports of avocados for a week in February in light of a threatening phone call received by a Michoacán-based U.S. inspector. Citibanamex estimated the suspension cost avocado producers US $7.7 million per day.

With reports from Reforma