Demand good, new guidelines pose challenges for Indian importers

Demand for fresh fruit imports increased in India last year, though the country's importers have had to deal with some challenges. New guidelines for imported apples have made it more difficult to bring fruit into the country and the lingering effects of 2013's currency valuation swings have forced consumers to adjust to new prices.

“The market for imported apples in India was good last year, though there were some pricing issues,” said Tarun Arora of IG International. “Prices rose by six or seven dollars on a carton of apples due to currency depreciation, so consumers were still getting used to the new pricing.”

Fortunately for importers, currency issues did not bleed in 2014. But it did bring changes in labelling guidelines for imported apples. While there were no labelling guidelines prior to 2014, the Food Safety Standards Association of India implemented new rules that many importers felt hindered their business.

“The new labelling laws are quite strict,” said Arora. “Before, you could just ship the fruit and didn't have to print cartons specifically for the Indian market. Now, they want labels that have packing dates, expiration dates, packer names, exporters names and many other things. These changes have reduced the volume of apples coming into India” In addition to labelling guidelines, new rules were also introduced regarding the types of fungicides that can be used to wash incoming fruit.

IG International sources its apples from Washington State in the United States, China, Chile and New Zealand. This year's shipments from New Zealand were about 70 percent lighter than those from the previous season.

Chilean imports made up for the slip in volume from New Zealand, and Arora believes Chile will hang onto that new market share. Arora estimates they've imported about 350,000 cartons of apples from Chile last year and even more from Washington State. Though demand has been sluggish in December, demand was good for most of the 2014, and Arora believes it will pick up again this month. Overall demand for fresh fruit has been growing.

Imports of kiwifruit from New Zealand were up last year for IG International, with 2013's volume of 200,000 trays growing by 40 percent for 2014. Arora noted that reports on kiwifruit helping prevent dengue fever stoked interest in the fruit and led to good movement.

Citrus imports increased last year, and IG International also brought in their first shipments of Turkish citrus. About 40,000 boxes of Turkish fruit were imported by IG International, and imports of established players, like Egypt, also rose. In fact, over the last four years, Arora estimated that their volume of Egyptian citrus rose by 40 percent. South African citrus also had a big presence in India this season.

While imports of most fresh fruit rose in 2014, grape shipments were about the same as those from 2013. Red globe grapes from California remain the most popular in India, and though demand is decent, the volume of fruit hasn't increased.

“We're seeing steady growth with fruit in general,” said Arora. “But imports of grapes are not rising the same way as imports of other items.” Aside from the introduction of Turkish fruit last year, new items haven't made much headway in India. Arora thinks it's a feature of any market that new players and new items have a tough time finding a foothold. It requires a lot to take on already established products and sources, and though it's exciting to try and break a new market or build up demand for a new product, it's also risky.

“Delivering products online is something new, but e-commerce in India has some big challenges,” noted Arora. “It's very difficult to grow a category online.” Instead, he has focused largely on in-store promotions and direct relationships with supermarkets. In general, he is bullish towards supermarket promotions and the Indian market as a whole.

“The market for fresh fruit in India has been developing more and more every year,” said Arora. “Consumers are more aware of more varieties.” But there remains a segment of the consumer base that shops purely based on price, so varieties offered and quality of fruit offered has to be balanced. While most of the many items that IG International ships are sold at premium prices, Arora noted that imports of citrus, which are generally priced lower, continue to be a big part of IG International's business plan.

Arora believes this is a good moment for the Indian market, and IG International is trying to capitalize on this moment by expanding its cold chain. While it already has 40,000 tons of cold storage space, there are plans to build two new facilities in Bangalore and Delhi.

“Deficits are down and growth looks to be back in the Indian market,” said Arora. “The stock market is marking a new high, every week, it seems. I believe in the Indian growth story, so, overall, I think it's a good time to be in India.”

For more info:

Tarun Arora
IGInternational
Tel: +91-22-66272000
Mob: +91-9819248884
Fax: +91-22-66272084
tarunarora@iginternational.net
www.iginternational.net

Author: Carlos Nunez / Yzza Ibrahim