Articles
ENHANCING GLOBAL COMPETITIVENESS OF INDIAN APPLE: INVESTIGATING THE VALUE CHAIN PERSPECTIVE
Article number
1099_64
Pages
525 – 532
Language
English
Abstract
India with a population of 1.22 billion is a large and growing market for food products.
Though India is the second largest producer of fruits and vegetables, the industry is facing major challenges due to the unavailability of fresh and quality fruits and vegetables.
The supply chain suffers from maximum inefficiency, due to the involvement of many intermediaries and lack of necessary infrastructure such as cold storage, resulting in poor quality, large markups and lower share of producer in the consumer rupee.
Indian apples are also facing stiff competition from China, USA, and European countries.
This study was undertaken to asses the global impact on domestic apple industry.
To work out marketing cost and margins, the Azadpur Fruit & Vegetable Market in Delhi was considered.
It was found that the total trader margin in the supply chain of imported apples amounts to about 51% and the 13% tariff share reflects a customs duty of 52.015%, the traders margin in consumer rupee represents a tariff equivalent of about 200% on c.i.f. import unit value.
For Indian apples the producers share was estimated as 56.61% in the consumer rupee.
The value chain analyses were based on decision diamonds such as input supply, farm production, postharvest treatment, logistics, processing and marketing, to identify steps in the chain that need to be further evaluated.
The meager share of producers in the supply chain is attributed to many factors like losses during transportation and storage; lack of appropriate technologies, advanced techniques, lack of capital, knowledge, information and transparency in the supply chain.
Other factors impacting supply chain and product quality are: tracking and traceability; lesser control of product safety and quality across the supply chain.
It was observed that imported apples fetch a higher price because of its quality, uniform grading and freshness.
The retail prices of imported apples in consumer markets is higher because 1) the consumers having higher incomes prefer to have imported apples, 2) the customs duty charged on the border price of imported apples is 52.015%, and the domestic marketing margins on imported apples are extremely high, 3) trader margins on imported apples moving from Mumbai port to other markets are high.
It is encouraging to note that entry into Indian markets has pushed the prices up and margins of intermediaries are in control and the stakeholders of domestic apples have adopted good management practices.
Thus, arrival of imported apples has not had any dampening effect on the level and fluctuations in the domestic apple prices.
Though India is the second largest producer of fruits and vegetables, the industry is facing major challenges due to the unavailability of fresh and quality fruits and vegetables.
The supply chain suffers from maximum inefficiency, due to the involvement of many intermediaries and lack of necessary infrastructure such as cold storage, resulting in poor quality, large markups and lower share of producer in the consumer rupee.
Indian apples are also facing stiff competition from China, USA, and European countries.
This study was undertaken to asses the global impact on domestic apple industry.
To work out marketing cost and margins, the Azadpur Fruit & Vegetable Market in Delhi was considered.
It was found that the total trader margin in the supply chain of imported apples amounts to about 51% and the 13% tariff share reflects a customs duty of 52.015%, the traders margin in consumer rupee represents a tariff equivalent of about 200% on c.i.f. import unit value.
For Indian apples the producers share was estimated as 56.61% in the consumer rupee.
The value chain analyses were based on decision diamonds such as input supply, farm production, postharvest treatment, logistics, processing and marketing, to identify steps in the chain that need to be further evaluated.
The meager share of producers in the supply chain is attributed to many factors like losses during transportation and storage; lack of appropriate technologies, advanced techniques, lack of capital, knowledge, information and transparency in the supply chain.
Other factors impacting supply chain and product quality are: tracking and traceability; lesser control of product safety and quality across the supply chain.
It was observed that imported apples fetch a higher price because of its quality, uniform grading and freshness.
The retail prices of imported apples in consumer markets is higher because 1) the consumers having higher incomes prefer to have imported apples, 2) the customs duty charged on the border price of imported apples is 52.015%, and the domestic marketing margins on imported apples are extremely high, 3) trader margins on imported apples moving from Mumbai port to other markets are high.
It is encouraging to note that entry into Indian markets has pushed the prices up and margins of intermediaries are in control and the stakeholders of domestic apples have adopted good management practices.
Thus, arrival of imported apples has not had any dampening effect on the level and fluctuations in the domestic apple prices.
Authors
B. Singh, B.K. Sikka, S.P. Singh
Keywords
India, apple, value chain, supply chain, competitiveness, decision diamonds, global competitiveness, distribution channels, marketing system, consumers
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