When it comes to fruit imports, India's appetite for apples is growing fast, but the local trade could soon be groaning ‘no more apples’.
Already well stocked with apples from a wide range of sources, India is braced for further heavy shipments over the coming weeks, which could result in a serious oversupply situation, according to key importers.
Prashant Gidwani of GT Fruittech said that in the past, imported apple supply has largely been confined to Washington and China at this time of year, but this season, the market has received significant volumes from a range of other origins as well, including Iran, Italy, France, Belgium and the US East Coast. “This flood of apples from across the globe has created a confused market situation, which is not good from a trade point of view,” he said.
IG International director Tarun Arora told Fruitnet that large volumes of Washington apples are on the water following bottlenecks caused by the recent slowdown at West Coast ports. In addition, more apples are set to arrive from Europe, including Poland, which recently gained access to the Indian market.
“We expect around 250,000-300,000 cartons of fruit to arrive each week from Washington over the coming months,” said Arora. “That’s when I get scared: with 200-odd importers in India and limited cold storage capacity, it’s difficult to handle that kind of volume. Personally I expect a really bad market in a couple of months’ time.”
Record-low prices for Washington apples this year have prompted heavy shipments to India, according to Kumar Aggarwal of Dev Bhumi Cold Chain. Season-to-date shipments stood at 1.5m cartons through mid-February, more than double the 735,000 cartons sent at the same stage in 2014.
According to trade sources, around 200 container loads of Washington apples were shipped out during the first and second half of December respectively, and the volume moved up steadily to 300 container loads for the second half of January. However, there appears to have been a slowdown in shipments to around 200 container loads during the first half of February, possibly brought on by shippers and receivers foreseeing a volume build-up.
The bottlenecks at US ports have already caused significant disruption for the trade in India. “Some of the containers are nearly 30 days late, and there have been significant gaps between arrivals of fruit because of port delays,” explained Aggarwal. “However, our biggest concern is the quality of the fruit. The fruit has become very ripe because of the port delays so importers have been selling it at whatever price they can get. This has not been a vintage year for Washington apples, and the quality is not good enough for long-term storage or transport.”
Ambrish Karvat of Yupaa Group concurred, predicting that prices will come under further pressure with the increased supply. “This is one of the most difficult seasons for Washington apples,” he said.
Domestic stocks
To compound pressures, the US fruit is arriving into a market that is already well stocked with domestic apples. “There are a lot of domestic apples in the CA rooms this year, and the numbers are well up on previous years,” said Gidwani. “There’s also been a tremendous increase in the quality and shelf life.”
Gidwani expects the CA-stored domestic apples to remain on the market until the end of April, while Aggarwal predicts availability will stretch to at least mid-May.
With Southern Hemisphere growers now starting their season, questions hang over the viability of their deal in India. “India took almost 2.5m cartons of apples from Chile last year, but who knows what will happen this year,” said Arora. “Their pricing is currently high versus Northern Hemisphere apples and they have a 50-55-day transit time to contend with, so it may be that the market won’t perform for them this year.”
Karvat said that arrivals from New Zealand and Chile will place further downward pressure on prices. “Overall supply will far exceed demand,” he warned.
Geographical expansion
But Keith Sunderlal of The SCS Group, which represents the Washington Apple Commission in India, is confident that the system can handle the projected volumes, especially with enhanced distribution into tier-2 and -3 cities. “The market is capable of absorbing 200-250 [container] loads a week between February and May – domestic and imported premium apples combined,” said Sunderlal. “So 150 loads a week of Washington apples should not ring alarm bells.”
The Washington Apple Commission (WAC) has been focusing on expanding the geographical reach of Washington apples in India. The WAC has dispatched its mobile road show teams to visit more than 50 different tier-2 cities across India this season to conduct promotions.“These cities represent populations of between 500,000 to 2m, and are an important growth opportunity to expand awareness and consumption of Washington apples,” said WAC's Rebecca Lyons.
