BANGALORE - For the first time in 18
years, Indian mangoes will be available in US
supermarkets. Even as Americans ready to sink
their teeth into this delicious fruit - the first
shipment of mangoes is set to leave India for the
US in a few days - Indian businesses are smacking
their lips at the prospect of the enormous
opportunities that lie ahead.
India
produces about 13 million tonnes of mangoes every
year, over half the world's total mango supply.
However, barely 1% of its produce is exported. It
accounts for only 19% of global mango
exports.
That is now poised to change with the US
and Japan, among others, opening their markets to
Indian mangoes.
Concerns that Indian
farmers used too many pesticides resulted in the
US banning import of Indian mangoes 18 years ago.
Last year, during his visit to India, US President
George W Bush announced that the US would import
mangoes from India, but Americans had to make do
without Indian mangoes for yet another year as
talks between the US and India on trading
agricultural produce ran into trouble. Talks last
week between officials of the two sides resulted
in problems being sorted out.
India has
agreed to irradiate the mangoes it exports and
will open its doors to Harley Davidson motorbikes,
while the US will lay out the welcome mat for the
mighty Indian mango.
The American green
light for import of Indian mangoes will give
growers of the fruit in India access to the US
mango market, which is pegged at 250,000 tonnes
per year. The US is the world's largest importer
of mangoes and so far it has been Mexico, which
produces only 5% of the world's mangoes, that has
dominated the US market. India will now look to
edge out the Mexicans.
Besides, American
import of Indian mangoes is expected to make it
easier for India to enter other high-value
markets. Japan, for instance, opened its doors to
Indian mangoes after the American green light.
Australia and New Zealand are likely to follow
suit soon. Also, the entry of Indian mangoes into
the US is likely to pave the way for export of
other fruits such as lychees and guavas.
The expansion in the overseas fruit market
is expected to boost Indian domestic production.
Rakesh Mittal, vice chairman of Bharati
Enterpises, said: "This is an opportunity which is
larger than telecom, which is larger than IT
[information technology]." Bharati is heavily
invested in telecommunications and information
technology and has recently moved into exporting
fruits and vegetables to the West.
"India
has become the back office of the world," Mittal
said, referring to the country's key position in
the business process outsourcing (BPO) industry.
"What we are trying to create here is BPO in the
agricultural sector. We will grow for the world."
With the overseas market poised to expand
significantly and the government amending the
Agriculture Produce Marketing Council Act to allow
corporates to produce and market mangoes, private
companies are moving quickly to get a slice of the
action.
Reliance Industries, India's
largest private-sector company, saw opportunity
early. Eight years ago, in what was really an
effort to "green" its petroleum refinery complex
at Jamnagar in the western Indian state of
Gujarat, Reliance planted over 100,000 mango
trees, producing 37 varieties of the fruit. That
turned out to be a smart decision. The profit
margin from mangoes was found to be very high,
"far higher than that from any of the petroleum
products Reliance produces", observed Hital
Meswani, executive director of Reliance Industries
Group.
Since the trees started bearing
fruit two years ago, Reliance has been selling its
mangoes to the British retail chain Harrods. In
2005, it sold just three tons of its 387-ton mango
crop (less than 1%) to Harrods, and the rest was
consumed domestically. But this June, Reliance
will be meeting 33% of Harrods' demand. And it
will also be exporting to the US this year.
Other companies that are hoping to bite
into the expanding export market include Godrej,
India Tobacco Company, Bharati Enterprises, Jain
Irrigation and Galla Foods. Some of these
companies are currently in the mango juice
business or processing mango pulp. They are now
considering exporting fresh mangoes. Several of
these companies have conducted feasibility studies
in mango orchards.
Japan holds out
"tremendous opportunity for Indian mangoes",
according to Agricultural and Food Products Export
Development Authority chairman K S Money. Bharti
Enterprises and Jain Irrigation will export around
50 tonnes of mangoes to Japan for the first time
this year while Desai Cold Storage will send 60
tonnes.
Andhra Pradesh-based
fruit-processing company Galla Foods is setting up
a food crop complex on a 100-acre facility in
Andhra's Chittoor district that will be used
mainly for exports. It plans to export over 120
tons of mangoes to Japan this year and has tied up
with Japan's Motooka, a distribution chain that
caters to leading retail networks. And it is
bending over backwards to address Japanese
concerns. It has allowed an official from Japan's
quarantine authority to be posted at its
processing facility to monitor the quality of
mangoes it exports.
But there are
obstacles that could slow the march of the Indian
mango. There is concern that some exporters might
compromise on quality. A few rotten mangoes would
sour the business. Indian mangoes suffer from lack
of standardization.
"Since there is a huge
domestic market, all types of mangoes produced get
sold at different prices. Farmers don't bother
about standardization, which can even fetch them a
better price at both the domestic and
international markets," pointed out Money. Mango
consignments to Saudi Arabia and Malaysia were
sent back this year. Exporters are hoping that the
entry of the big corporates will guarantee
quality.
While some claim that the
expanding markets for mangoes and other fruits is
an opportunity for India's small farmers, there is
concern that they might not in fact gain too much.
Their experience of shifting to cash crops has
been far from pleasant. The rash of farmers'
suicides in India has been attributed to the
failure of the government to provide them with
infrastructural, financial and other support to
compete effectively. Will the entry of powerful
corporates into the growing and/or export of
mangoes leave the small farmer open to
exploitation?
It is likely that Indian
farmers will be compelled to produce those mango
varieties that will appeal to Western tastes. The
town of Malihabad in Uttar Pradesh is known as
India's mango capital. The mango varieties grown
here - Chausa, Langdaa and Dusshehri - are said to
be too sweet for Western palates. Consequently,
Malihabad is being marginalized in the battle for
the international market by Ratnagiri in
Maharashtra, home to the immensely popular
Alphonso mango. This is prompting its farmers to
abandon traditional varieties that appeal to
Indian tastes.
The opening of the
international market for mangoes is expected to
eat into the supply of mangoes for the domestic
market. This has contributed to a sharp rise in
the cost of mangoes. While business houses are
licking their lips in anticipation of profits,
most Indians will have to remain content this
summer with their memories of eating mangoes.
Sudha Ramachandran is an
independent journalist/researcher based in
Bangalore.
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