Lower production across India’s key apple-growing regions this season, coupled with a lack of storage-quality fruit, looks set to result in greater demand for imported apples moving into the New Year.
Production in both of India’s major apple-producing states, Himachal Pradesh and Kashmir, has dropped significantly this year, according to leading distributors and importers.
Srinivasa Ramanujam, business head of Adani Agri Fresh, which operates three large-scale controlled atmosphere (CA) storage facilities in Himachal Pradesh, says the state’s crop is expected to be down by 30-40 per cent compared with last season. “Due to adverse climatic conditions during flowering, and fewer chilling hours for fruit, the Himachal apple crop was severely affected,” he tells Asiafruit.
A similar situation is reported for production in Kashmir, where the season appears to have been further disrupted by unrest in the valley. “Kashmir’s crop is expected to be down by 30 per cent, and we’re seeing mostly bigger sized fruits with less storable quality,” says Ramanujam.
While noting that it’s virtually impossible to secure accurate information on conditions at orchard level in Kashmir, the majority of apples arriving in the market from the region have been “over-mature”, Ramanujam says. “There are reports that due to the disturbed conditions, farmers could not take care of their orchards properly for the past two months– this might have affected the quality.”
IG International’s Tarun Arora says that while the overall Indian crop is reported to be down by 30-40 per cent this year, the reduction in volumes could turn out to be much greater due to “ongoing issues” in Kashmir, which he says have prevented farmers from picking apples.
The prevailing quality of Indian apples is below par this season, Ramanujam adds. “The crop from the lower and middle elevation areas in Himachal was heavily affected by hail,' he says. 'Much of it is too poor for storage.”
Storage shortage
Availability of ‘good-quality storable fruit’ is much lower, he points out. “Prices of storage-quality fruit in Himachal are up by 50 per cent compared to last season, and for Kashmir apples, they’re up by 10 per cent,” says Ramanujam. “It’s clear that the overall volume of storage fruit is significantly down in Himachal Pradesh. The storage levels of Kashmir apples may also be lower, but a clear picture will only emerge by the end of October.”
Whether the relative lack of storable fruit will result in an earlier opening for imported apples this year remains to be seen. “CA-stored fruit will be available in the market once fresh and cold store apples are finished in January,” explains Ramanujam. “Though the volume will be lower, most players may release only small quantities of fruit into the market and try and keep the marketing window open as much as possible.”
China dominating
China is the supplier most likely to see an earlier start for imports on account of its lower prices, which are in line with or below those of domestic apples, most traders note. However, Parth Karvat, head of global procurement for importer Yupaa Fresh, cautions the import trade against over-optimism, pointing out that there is no definitive data or information on the crop situation and storage levels in India.
“You cannot simply start to import earlier based on ‘talk’ and ‘estimates’. If those estimates prove inaccurate, the market tends to get oversupplied as Indian stored apples aren’t sold yet,” he says. “With India being one of the world’s largest apple producers, a short crop is also a substantial amount of fruit, especially when traders now have storage infrastructure to sell through a longer period.”
Nevertheless, there is a consensus among importers that the downturn in domestic supplies will lead to stronger demand for imported apples in the New Year.
China and the US typically dominate Indian apple imports, and China in particular looks set for a big campaign this year.
“China is really dominating this season,” says Karvat. “Their prices are extremely low, and they’re remaining low throughout the selling period. We saw it with their Red Delicious [Huaniu], which were extremely price competitive. But we work with four varieties from China, including Fuji, and we’re seeing extremely low prices across the board. China has a lot of fruit this year and their domestic market has slowed down, so they’re depending more heavily on exports.”
Ramanujam singles out Qiguan as an apple variety from China that could see bigger volumes this year, taking share from Fuji. “Qiguan has a similar appearance to Fuji but it’s cheaper,” he observes.
Washington is also expected to send bigger volumes to India in 2016/2017, after shipments fell by 56 per cent to 2.4m cartons last season.
'Washington apples are currently more expensive in comparison to other origins, but considering that they have a decent crop and with sales pressure on their peak counts which are the large sizes, we foresee the momentum building from mid to late November onwards,” says Karvat. “One potential issue could be a shortage of smaller sizes. India generally prefers 100-198 count fruit but they don’t have much fruit that’s smaller than 125 this year.”
More import options
Despite the dominance of China and the US, India’s apple imports from EU sources grew significantly last year, and traders expect the trend to continue in 2016/17. Italy and Belgium have both stepped up their focus on the Indian market, adding to supplies from France, while Poland is also looking to build on the foothold it has established.
Indeed, India’s apple import supply has been diversifying. “Today there are a lot of options for apples – just last year, five new origins were added,” says Arora. “The US, China, Italy, Chile, New Zealand and Belgium still remain our top import countries, but there are now more than 15 countries with access to the market.”
Similarly, while Red Delicious remains by far the dominant variety, other cultivars are gradually gaining a following. Dev Bhumi Cold Chain’s Kumar Aggarwal says his company will focus on building its Gala imports from Washington this year. “India took more Galas than normal last year – Chile and New Zealand have both been shipping Gala, and half a million boxes were probably imported from New Zealand,” he says.
Despite the trend, higher pricing remains a key obstacle to developing the market for alternate varieties to Red Delicious and Qinuan and Fuji from China.
India’s hefty 50 per cent duty on apple imports also constrains market demand, although Arora feels that the market will continue to grow at rates of 10-15 per cent, even with the high tariff.
Currency fluctuation and “the floor price for duty” will play a major role in deciding the volume of imports this year, Ramanujam predicts. The floor price is the reference price fixed by Indian customs for apple varieties arriving from different countries. “If the reference price for Washington Red Delicious is US$25 per carton, even if an importer lands product at US$20 per carton, they must pay a 50 per cent duty on US$25,” he says.
