As the pandemic holds demand subdued, Indian grape exporters are predicting a decline in shipments to Europe in 2020-21. Increased export costs are forcing top exporters to turn their focus to the domestic premium-quality fruit market.
The annual rate of grape export to Europe declined from 32 percent in 2016-17 to a negative 12 percent in 2019-20. In value terms, exports rose from Rs 431 crore in financial 2009-10 to Rs 2,176 crore in 2019-20, the highest of the decade reported at Rs 2,335 crore in 2018-19, data from the Agricultural and Processed Foods Export Development Authority (APEDA) shows.
No Aggressive International Demand
As their production costs have risen, the margins of farmers and exporters are expected to be squeezed, while international buyers are negotiating hard to cut prices by around 20 percent-30 percent compared to the previous year. Shipping companies cite high sea freight rates, while packaging companies also quote higher rates, citing increases in paper prices, according to exporters.
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This year the situation is difficult for the grape sector. In the 2020 grape season, grape exports to Europe decreased by about 25 percent compared to the last year. This year as we do not see any aggressive demand from European buyers, exports will drop further by about 10 percent -15 percent over 2020. Demand for hotels, restaurants and other out-of-home consumption segments has not recovered. Vilas Shinde, chairman of Sahyadri Agro, India’s largest farmer and grape exporter, said.
Cloudy Weather Spoiler
Grape growers said that because of excessive rainfall, the grape season has been delayed by two weeks. This year however, the quality of the grapes is better. In Maharashtra, the largest producer and exporter of grapes, the current cloudy weather and rainfall have increased the concerns of farmers whose plantations are presently bearing small fruits. This will lead to cracking of the fruit, fall of the fruit and rising pesticide spending.
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In order to make up for the loss of export revenue, exporters are preparing to concentrate on the domestic market. “In December, we did not export any grapes and instead sold the December harvest produce in India through e-commerce platforms, and we hope the domestic premium fruit market to rise,” Shinde said.
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