India: apple demand puts pressure on local supply
At 1.84 million metric tons, initial estimates have India set to reach an average apple crop this year. With local consumption surpassing output, this volume will not be enough to keep up with demand, according to the United States Department of Agriculture's GAIN Report.
Despite the nation's place as the world's third largest apple producer, India will have trouble meeting growing local demand for the fruit. Infrastructure and supply chain issues are expected to provoke continued post-harvest losses.
"India faces a supply gap in its domestic apple market as increasing demand from the growing middle class meets limiting factors such as seasonality, geographical separation, and limited infrastructure," the report said.
Orchard age will also have a limiting impact on production. Most orchards for popular varieties like Red Delicious, Royal Delicious and Rich Red are estimated to be between 30 and 35 years old.
"Apple production in India is low input and low output, as most growers are small or marginal farmers. Because of the small and fragmented nature of these orchards and the difficult hilly terrain, modern equipment is not economically viable," the report added.
"Therefore, most field operations are conducted manually and yields are reported to be as low as 7.2 MT/Ha, far below international standards."
Faults in local output are noted in import volume. As demand for the fruit grows, so does the market for foreign fruit. In 2012, India imported a record volume of apples at 186,000 MT, a 4% increase from the previous year.
"Despite the fall of the rupee relative to the dollar, with increasing population, growing disposable incomes, improving lifestyle, health awareness, and India’s tradition of vegetarianism, the apple is currently the most heavily consumed imported fruit in India," the report said.
Even with a 50% tariff on imported fresh apples - one of the highest in the world - the category has seen consistent growth in India.
Imported apples in India come with a high price, as well as high quality that set them apart from the local supply.
The imported apple supply was complicated this year by a rise in fruit of unclear origin.
"Indian apple importers complained that an unknown quantity of gray-market imports of Red Delicious from Iran appeared in the Indian market from January through March 2013 and were falsely attributed to Afghanistan," the report said.
"These allegedly Iranian apples, as well as legally imported Iranian apples, were sold unbranded, and were marketed alongside and in competition with lower-quality domestic Indian apples."
The United States and China continue to be the two biggest apple importers in India, with 41% and 31% of the market respectively. Chile, New Zealand and Italy are also notable players.