Exports of fresh Indian grapes very positive aided by favorable weather and good yields

Dec 20, 2018

In current season the exports of fresh grapes have begun very impressively, so far as the shipments are concerned it has been estimated at around 392 tonnes on a positive note in the current season. Exporters see an increase of 10-30 per cent in output aided by favourable climatic conditions in the key producing state of Maharashtra.

According to Ashok Sharma, Managing Director and CEO of Mahindra Agri Solutions Ltd.; Mahindra Agri, a large exporter, expects to ship 10,500-12,000 tonnes of grapes this year, up by about 33 per cent over the last calendar year. This is attributed the positive trend in grape exports to farmers using better practices, improved crop management and nutrition, which resulted in increased productivity. There is an increase in the overall acreage in areas like Baramati and Sangli, which are relatively new to grape growing. This is a trend which has caught on in the past four-five years.

Good weather in November and December also helped, with the lack of rain in these two months and favourable weather acting as positive factors. The farmers made reasonable returns last year which gave them the confidence to invest and work more on the crops.

India produces around 30 lakh tonnes of grapes, annually. Netherlands is the largest buyer accounting for close to one-third of the shipments. In 2017-18, Russia, UK, Germany and the United Arab Emirates were among the top five buyers.

Last year, total exports from India to Europe, China and the Far East were over 8,500, 40-ft containers. This year, the exports should increase to over 10,000. The production compared to last year has been higher. Apart from the favourable climate, the demand for Indian grapes is increasing, compared to competitors like Chile and South Africa as the cost of production is less than in these countries. Better food safety practices are another major factor.

However, the industry has faced challenges, with the pressure on price being a major factor. The increased supply of Indian grapes exerted a price pressure in the European market. Mostly, the price at which grapes are sold in Europe determines what the farmers get after the marketing fee charged by exporters, said Sharma. Excess supply for even a few weeks can put pressure on the price.

Farmers may not make the same rate as last year, but because of additional production, their revenue may still be equal or better than last year. As for the drought condition in parts of Maharashtra, delayed monsoon had a bigger impact, but this was offset by the use of groundwater and other sources.

The grape growers have been managing the water consumption systematically and even in drought conditions they have managed to grow export quality grapes. It is a well-known fact that best grapes are grown in the desert where just the required water is available.

Mahindra Agri, which works with over 800 farmers, has traditionally focused on the European market, but in the past four years, it has been diversifying to new markets like Canada, China and Malaysia. Its export dependence on Europe was around 92 per cent in 2016 and will come down to 77 per cent this year.

These markets are more profitable for farmers compared to Europe which is quite saturated as there are many supplies happening there. Europe as a destination is also quite well developed from India.

After successful exports to EU for over two decades, other developed markets like USA, Canada and China are opening their markets to Indian grapes, which is a new market; Germany and the UK continue to increase their import of grapes from India.

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