Monday, 11 May 2015

‘Western sanctions on Russia, a boon for Indian farm produce suppliers’

Market fundamentals appear to be favourable for Indian farm produce suppliers, with the Russian market showing renewed interest in Indian fruits and vegetables.
Participants at an event for the Indian fresh produce business were told that many Russian importers were exploring alternate options to replacing traditional suppliers, and that Russian sanctions could have a silver lining for India.
Russia is one of the largest grocery retail markets in Europe, with approximately $281 billion in sales, net of VAT (value added tax).
Fresh interest

Participants at the event were told that Western trade sanction on the nation has ensured an uptick and interest in Indian produce, especially in exotic fruits and vegetables.
Niraj Kumar, Managing Director of JSC Vial Inter, said that imports of Indian products into Russia provided an opportunity in the vast market at the recently concluded Fresh Produce India 2015.
He said Indian exporters could explore many opportunities that are on offer.
Market potential

The total market value of the Russian market is estimated at $8 billion, with fruits like apples, bananas, pears, and citrus fruits accounting for $5.4 billion.
Vegetables such as tomatoes, cucumbers, potatoes, mushrooms, onion, carrot and garlic tend to account for nearly $2.6 billion.
Imports from Turkey to Russia accounted for the highest market share at 25 per cent, accounting for 4,92,000 tonnes of produce.
China followed in the second spot with 15 per cent market share, with 3,05,000 tonnes. Israel was in the third spot with 11 per cent market share, with 2,06,000 tonnes.
Need innovations

Urging Indian suppliers to utilise the opportunities in the vast emerging Russian economy, Kumar said that modern formats accounted for just 64 per cent of the total 2014 Russian food retail market, including open markets. Stating that Russian consumers are receptive to innovations in food retail, Kumar pointed out that though Russia’s fiscal problems existed, it was still a market work exploring, since food sales were the penultimate to feel the impact of a weakening economy.
Indian sources

Speaking about the strong purchasing power of Russian importers resulting in improved commercial terms for Indian fruit and vegetable exporters, Kumar said that the top five Russian food retailers hold less than 20 per cent of the market.
Fruit market

Exports currently comprise fresh fruits such as mango, pomegranate and grapes. In the case of vegetables, potato, onions and ginger are high growth areas.
Opportunities for fresh fruits are limitless, said Kumar, especially in the case of orange, lichi, papaya and coconut. In the case of vegetables, it is ginger, baby corn and exotic green vegetables, he pointed out.

Source: Business Line

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