Freight cost is barrier to agri export growth, rue exporters

Despite the share of fruit and vegetable exports in the total agricultural exports rising from 10 per cent to 17 per cent in the last two decades, exporters say freight costs continue to be a barrier. The exporters are focusing on meeting international quality standards as they make a gradual shift to high value markets like the US and Europe.

While comparing India’s freight costs with competing countries, P G Chengappa, vice chancellor, University of

Agricultural Sciences, Bangalore, said that the country lacked in basic holding facilities which added to the cost, making exports unviable at times. “If we take mango, the transportation cost to UK is $649 per MT from Pakistan whereas it is $958 from India. Similarly, for grapes, the transportation cost to Neth-erlands is $315 from Chile whereas it is $785 per MT from India,” said Chengappa.

Exporters say that high freight charges could prove to be a dampening factor at a time when other countries have closed in on India with competitive prices. In commodities like tea, coffee and spices, India is facing a stiff competition from Vietnam, Sri Lanka and other asian countries. “Airports in India lack good handling facilities for perishables and there are limited number of flights and higher air freights. Moreover, it takes a longer time between Indian ports and the EU due to lack of faster ships on this route,” said Uday Singh, chairman and managing director, Namdhari Group of Companies. Also, nearly 44 per cent of imports from India to the US are learnt to be facing non-tariff barriers (NTBs). These include tarriff quota, anti-dumping duty, countervailing duty and licence for select purchasers.

India’s major agro exports include rice, oilmeals, marine products, cashew, spices, tea, coffee, tobacco, castor oil, groundnut sesame, fresh fruits, vegetables pulses etc., According to The Agricultural and Processed Food Products Export Development Authority (APEDA) statistics, in 2008-09, export of fruits and vegetables totalled Rs 3,659.15 crore. Uday Singh of Namdhari Group said, while global fruit production stagnated in the last four years, in India it has managed to grow every year.

Exporters say fruits like grapes, pomegranate, banana, mango, pineapple and watermelon are promising export products to high value markets like the US, EU and West Asia. Of the total production of 1.4 million tonnes of grapes, India is exporting over one lakh tonne. The surge in quality grape production has arisen out of Nashik region which is replicating California. California accounts for around 98 per cent of the US production of grapes and about 11 per cent of the world production. India’s grape exports are mainly to Netherlands, UK, Bangladesh and parts of West Asia.

“Presently grapes are exported from February to early April. Efforts need to be taken to extend to four months. Currently Maharashtra and Hyderabad in Andhra Prad-esh are the major regions for cultivation. More agro clim-atic zones should be added to increase the season and availability,” said Singh. He added that producers of gra-pes should strive to introduce new varieties, which can enlarge the available basket of table grapes.