India’s grape exports will continue to shrink in 2021 as pandemic keeps demand subdued

Economy


Indian grape exporters are expecting a fall in shipments to Europe in 2020-21 as the pandemic keeps demand subdued. Increase in costs of exporting is making the top exporters divert their attention to the domestic market for premium quality fruits.

The annual rate of growth of grape export to Europe has been declining from 32% registered in 2016-17 to a negative 12% in 2019-20. In value terms, the exports have increased from Rs 431 crore in the fiscal 2009-10 to Rs 2,176 crore in 2019-20, which is the highest of the decade recorded in 2018-19 at Rs 2,335 crore, data from Agricultural and Processed Foods Export Development Authority (Apeda) showed.

The margins of farmers and exporters are set to be squeezed as their production costs have climbed, while the foreign buyers are bargaining hard to slash prices by about 20%-30% over the previous year. Shipping companies are quoting high sea freight rates, while packaging companies too are quoting higher rates citing increase in paper prices, exporters said.

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“The situation is challenging for grape business this year. Grape export to Europe in the 2020 grape season had declined by about 25% over the previous year. This year, exports can fall further by about 10%-15% over 2020 as we do not see any aggressive demand from the European buyers. The demand from hotel, restaurant and other out-of-home consumption segments has not recovered yet,” said Vilas Shinde, chairman, Sahyadri Agro, the largest farmer producer company and the grape exporter from India.

Grape growers said the grape season has been delayed by two weeks due to prolonged rainfall. However, the quality of grapes is better this year. The present cloudy weather and rainfall taking place in Maharashtra, the biggest grower and exporter of grapes, has increased worries of farmers whose orchards are currently bearing small fruits. It will lead to cracking of the fruit, fruit drop and increase in expenditure on pesticides.

Exporters are planning to focus on the domestic market to make up for the loss of export business. “We have not exported any grapes in December and instead sold the December harvest in India through e-commerce and expect to increase the domestic market for premium fruits,” said Shinde.



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