Ajit Desai, Director at Navsari-based DesaiAgri Foods, a banana supplier and exporter, recalls the time when he lost out on a trial shipment to Bahrain in 2002. Desai admits he was unaware of the market demand, packing requirements and the storage and pack-house facilities needed to ensure the fruit reaches the customer properly. “I did not have adequate knowledge back then, and neither did we have the post-harvest technology necessary to increase the shelf life and freshness of bananas. I started learning more about the trade after this shipment,” he says.
Desai then got a five-member team from the Philippines — the world’s second-largest banana exporter — to train farmers in places like Gujarat, Maharashtra, Andhra Pradesh, Madhya Pradesh and Tamil Nadu. “I also went to the Philippines and learnt some of the best practices, right from soil preparation to reaching the customer. Such training equipped the farmers with the know-how on the quantity of fertiliser that needed to be sprayed, the timing and other practices. It helped to augment their income as well as productivity,” he says, adding that some farmers could double their income.
His banana operations started in full swing after the company’s first export order of approximately 2,000 tonnes to Dubai was executed in 2006.
Like him, other exporters have also tried to increase their share of banana cargo from the country. The numbers reveal an upward trajectory. Union Minister of Consumer Affairs, Food & Public Distribution Piyush Goyal recently stated that India’s banana exports have shown an eight-fold growth in 9 years during the April-May period. Banana exports jumped from Rs 26 crore in April-May 2013 to Rs 213 crore in April-May 2022, the minister said in a tweet. “Making the world go bananas,” he tweeted. The Directorate General of Commercial Intelligence and Statistics says India exported $157.86 million in value terms for bananas in FY22 versus $99.86 million in FY21. Iran, the UAE, Iraq and Oman are the major export markets for India.
Several reasons can be attributed to this development, including the sweet taste of Indian bananas, more focus on farmer training as well as locational advantages. But has India also been able to raise its infrastructural and quality standards for a fruit that is among the most produced and traded globally? Sadly, no, especially when the country has some natural advantages.
For one, India is the largest producer of bananas in the world. Its output was 32 MT in 2021-22, according to the National Horticulture Board (NHB)’s first advance estimate. According to the UN’s Food and Agriculture Organisation (FAO), India produced an average of 29 MT every year between 2010 and 2017; the next biggest producer was China at 11 MT.
The biggest exporters of the fruit are Ecuador, the Philippines and Costa Rica, which are placed between the fifth and eleventh places on the lists of top producers. In contrast, India is not even among the top 10 banana exporters. It has not more than 2% of the global share, estimate exporters.
While recent market disruptions make it difficult to get accurate figures, the FAO’s The Banana Market Review has some preliminary data for 2021 that can paint a discernible picture of the industry. It says the banana trade was affected by factors related to the pandemic, weather shocks, concerns around the spread of plant diseases, stringent regulations on residue levels and a fall in demand in some import markets. “Preliminary data indicate that global export quantities fell by some 1.5 MT from their 2020 levels, to approximately 20 MT in 2021.”
The report says the leading importers are the European Union (5.2 MT), the US (4.1 MT), China (1.9 MT), the Russian Federation (1.4 MT) and Japan (1.1 MT). Emerging banana markets are Saudi Arabia, Turkey, Iran and Iraq, it adds.
India, which has a 25% share in global output according to the Press Information Bureau, has not been able to dominate the market as it should.
This is because people aren’t familiar with Indian brands, says Desai. “Our markets are primarily limited to the Middle East (West Asia) at the moment. We have not gone to CIS countries or Europe. Moreover, quality is not at 100% either.” On top of this, Indian farmers have smaller landholdings as compared to other countries, which leads to several problems. Other countries also have advanced technologies such as helicopters to spray pesticides while we have only started spraying with drones recently, he adds.
The missing link
Exporters are of the view that though India has some natural strengths in this category, there are certain aspects that act as roadblocks. Logistics, for instance, is one area that needs more work.
Aaloke Agarwal, CEO of Mumbai-based Trident Agrocom Exports, says there is a lack of break-bulk systems at the ports. Break-bulk cargo is transported in smaller units — non-container cargo — and occupies less space in ships, thereby giving room for more cargo to fit in. “Currently, we have to load the product into containers. If they provide facilities for break-bulk cargo, the cost of freight will come down and exporters will profit,” he says.
Besides this, the exporter claims that the major challenge is the many fly-by-night operators who come in and hamper the business practices of established exporters. “The government has not controlled the product. People from Iran come to India and form a dummy company. They then buy bananas locally but do not adhere to the regulations.” While traders like Agarwal have to pay 18% GST on a box of bananas, these operators do not follow such rules and undercut established traders. “How do we compete with such small unorganised exporters who buy raw material without paying any GST?” asks the CEO of Trident Agrocom Exports.
Read More at https://economictimes.indiatimes.com/small-biz/trade/exports/insights/india-is-the-largest-producer-of-bananas-but-ecuador-and-the-philippines-rule-the-global-market/articleshow/93721416.cms