Stakeholders in the apple economy are peeved about the influx of ‘illegal’ or untaxed apples, which they say is driving the prices of homegrown fruits southwards. They rue that that fresh fruit importers were engaging in under-invoicing of bills to circumvent the import duties, reports Raj Machhan
The emergence of Iran as top exporter of apples to India in terms of volume has left growers and traders in India a harried lot. Stakeholders in the apple economy are especially peeved about the influx of ‘illegal’ or untaxed apples, which they say is driving the prices of homegrown fruits southwards.
Selina Wamucii, an International agriculture produce trading portal has pegged the wholesale export price of Iranian apples between USD 0.43 (Rs 31.80) and USD 0.54 (Rs 39.93) per kg. “Good quality apples imported from Iran are selling at Rs 70 to Rs 85 per kg in wholesale. In a highly price sensitive market, this has put tremendous pressure on prices of apples produced domestically”, says Prem Rohra, an Ahmedabad based apple trader.
In a letter to written to Union Minister for Agriculture and Farmer Welfare Narender Tomar, the Hill States Horticulture Forum (HSHF), a joint body of horticulturists from Kashmir, Himachal Pradesh and Uttarakhand, has said that fresh fruit importers were engaging in under-invoicing of bills to circumvent the import duties. HSHF is among other organizations including Kashmir Valley Fruit Growers and Dealers Association, Progressive Growers Association, and Himalayan Apple Growers Society to demand a complete ban on import of Iran apples or imposition of 100 per cent import duty. “We have also sought a ban on selling of Iranian apples in APMC Mandis, and demanded to fix the assessing value of fresh imported apples at one US Dollar irrespective of the value mentioned in the invoice to avoid evasion of import duty,” says Harish Chauhan, convener of Himachal Chapter of HSHF.
As per East Fruit, an information and analytics platform supported by the Food and Agriculture Organization (FAO) of the United Nations, Iranian fresh apple exports to India stood at 74,900 tonnes during the 2020-21 apple season (August-July), a threefold increase over 2019-20. At 67,000 tonnes, Turkey came in a close second, followed by Chile, Italy, United Arab Emirates, New Zealand, Afghanistan and the USA. As per trade estimates, compared to 2020-21, apple imports from Iran are expected to shoot up further in 2021-22 season.
The Iranian onslaught has singularly hit apple growers in Kashmir. Reason: The harvesting season in Iran more or less overlaps that of Kashmir (commences mid-September). Says Mir Mohammed Amin, President, Fruit Growers Association, Shopian, Kashmir, “Earlier, price of a 16 kg box of Kashmir apples ranged from Rs 1000 to Rs 1200 in Delhi market, but with the onset of Iranian imports in November, the rate has dropped to Rs 700 – 750.”
The annual apple production in India ranges from 2.1 to 2.9 million tonnes, of which Kashmir accounts for 75 per cent, Himachal Pradesh 20 per cent, and Uttarakhand four per cent. The Northeastern states of Arunachal Pradesh, Nagaland, Meghalya, Manipur and Sikkim make up for the remaining one per cent.
The fact that Afghanistan has emerged as one among the top ten exporters to India riles the apple growers the most. Till last year, Iranian apples were allegedly routed through Afghanistan to evade the 50 per cent basic custom duty (BCD) imposed by India on the fruit. India and Afghanistan have a duty free bilateral trade arrangement as member countries of the South Asian Free Trade Area (SAFTA). “With the help of Afghan intermediaries, apples from Iran were rerouted to show Afghanistan as the country of origin. The apple consignments were further transported to India through border crossings along Indo-Pak border,” says Amin. However, the import of Iranian apples through this route has become difficult after the Taliban regime took over. Reports citing officials of Afghanistan Chamber of Commerce and Industries (ACCI) say that Islamabad has banned import of apples from Afghanistan as these were found to be of Iranian origin. As per Islamic Republic of Iran Customs Administration, the country exported apples worth USD 51.7 million to Afghanistan in 2019-20, while its exports to India stood at USD 26.6 million during the year. On its own, Afghanistan produced 250,000 tonnes of apples in 2019.
What makes India the favorite export market for Iran? For one, India has a tremendous appetite for apples. In 2020 – 21 apple season, the country posted the largest increase in import of fresh apples the world over as apple exports to India exceeded four lakh tonnes for the first time. Secondly, Iran produces large quantities of apples (at 3.7 million tonnes, its annual production is more than that of India). But owing to US trade sanctions, it does not have access to many of the lucrative international markets. India remains one of the best destinations for its produce. Thirdly, owing to low prices and production of varieties that are already well-known in India, Iranian apples are attracting increased attention from Indian commodity traders out to make a quick buck. Says a Mumabi based apple trader, “Given the ultra-low prices, Iranian apples are increasingly being imported through Dubai and shipped to harbors in Gujarat and Indian ports like Chennai and Mumbai. Traders are selling a part of the imports to meet the current demand and simply dumping the rest in CA stores to be sold later to earn higher profits.”
Growers and apple traders in India generally store a part of the produce in government-supported and private Air-Conditioned (AC) and Controlled Atmosphere (CA) cold stores to be sold during the off season in March and April. Amin says that apart from channeling the fruits in the running market, the growers in Kashmir have stored 1.5 crore boxes in Controlled Atmosphere (CA) cold stores. Another 1.25 crore boxes had been stored in go downs owned by individuals. As per conservative estimates, over 75 lakh boxes (1.5 lakh Metric tonnes out of total production of 6 lakh metric tonnes) of apples from Himachal Pradesh have been stored within and outside the state in the current apple season. Apples kept in AC stores are generally sold by end of January. “Most of the individuals who opted for these stores have already sold their produce at a lesser price. But given the expenses involved, it is the CA store produce that is at a real risk of a loss,” says Lokinder Bisht, President of Progressive Growers Association. As per estimates by Prem Rohra, these could sell cheaper by Rs 500 to Rs 600 per 20 kg box on account of the Iranian imports. Interestingly, commission agents and traders account for over 75 per cent of the produce stored in CA stores.
What does import of cheap Iranian apples mean for the consumer? Very little, it seems. As per inquiries, Kashmir apples were selling for Rs 100, Kinnaur apples for Rs 150, and imported Washington apples for Rs 300 in the Chandigarh fruit and vegetable market. “Apple trading is a complex, highly unorganized business, and manipulation of prices remains a fact,” agrees Bisht. The growers are completely dependent on the middlemen, especially in Himachal Pradesh, where the government has fixed a nominal MSP of Rs 8.50 per kg. Fuelled by rumors of an unprecedented crop production, prices of apples in HP in the 2021 season dropped to a 10 year low mid-season. Apple boxes weighing 25 to 30 kgs fetched a measly Rs 600 to Rs 1200 in local markets. Growers in Kashmir are better off in this respect due to the market intervention scheme of National Agriculture Cooperative Marketing Federation (NAFED), which buys apples for Rs 60, Rs 44, and Rs 24 per kg depending on the quality.
