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MANGO MANIA IN INDIA
By SUDHA RAMACHANDRAN
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.
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INSIDE STORY
