India’s fruit processing industry on global footing

4 May, 2018


India ranks second in production of fruits and vegetables. It has 15 agro-climatic zones, which can support most of the fruits. Despite that, the level of fruit processing in India is very low (around 2.2%) as compared to countries like the US (65%), China (23%) & Philippines (78%).

The biggest challenge faced by the fruit processing industry is perhaps, limited and inconsistent availability of fruits. Due to low per capita availability of fruits in India, most fruits find their way to retail markets, and almost nothing is left for processing. In the absence of consistent fruit supply, the industry cannot assure supply to its customers. They are reduced to marginal players processing table varieties and filling the gap left by crop failures in other parts of the world. This leads to uncertainty and low capacity utilization of processing units. This, coupled with low farm productivity, makes fruit processing a non-starter or a high-cost producer at best.

Presently, both fruit and fruit juice concentrate prices in India are way higher than the global prices. For example, the average ex-factory gate prices for oranges for the last three years have been 60% higher than Brazil. Brazilians segregate their fruit at source, have better irrigation, and big financial houses in fruit processing. Furthermore, Brazilian oranges are juicier and sweeter than Indian oranges. Therefore, they use 40% less oranges to make 1kg of juice concentrate. The case is no different for lemons or apples.

However, there is a significant opportunity for us. Globally, the three big crops that are processed are tomato, orange and apple. India is among the top 5 producers of all these commodities but have a negligible presence in their processing. A meagre target of 5% would lead to processing of 4 million tons of fruits.

We need to work towards significantly improving, both overall fruit availability and farm productivity.

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