Low export prices for canned pulp compound problems

R. Balaji

King in trouble

Export prices

of mangoes are not viable at current levels

Processors themselves

indulge in cutthroat competition

Experts feel

domestic marketing would help

Chennai, June 15

Mango processors, manufacturing pulp for the export markets, have been hit by high prices of mangoes and low export prices for the product - canned pulp.

Processors in Chittoor, Andhra Pradesh, and Krishnagiri in Tamil Nadu, which produce over 90 per cent - about 1.5 lakh tonnes each season - of the country's mango pulp exports, find themselves cornered, say industry representatives.

Local Markets

But the domestic market for fresh fruit juices is on the increase and pulp producers should increasingly concentrate on supplies to the local markets, say industry leaders. According to Mr Balakrishna Reddy, President, Chittoor District Fruit Processors Federation, over 30 of the 50 units in the district have started processing the fruits.

But arrivals have been delayed during the current season, which started over a month late due to unseasonal rains in end-2005.

Lower Output

The pulp producers, particularly the small producers with capacity of about 1,500 tonnes in a season, depend on traders for exports.

The price of an 18.6 kg carton of pulp (six cans a carton) is about Rs 340, which is not viable. So supplies have not commenced to exporters.

Also, last season the production was high and there are stocks left over.

The units here mostly process `Thothapuri' varieties of mangoes and some Alphonso, which season has now ended.

According to Mr G. Shankar, Director, Thenamoothu Foods, a leading producer of mango pulp in Krishnagiri, the manufacturing cost works out to about Rs 400 a carton but the exporters are offering around Rs 325. Early estimates of mango production during the season had been off the mark and the season had not just been delayed but output was also lower than expected. A kg of `Thothapuri' costs about Rs 5.50-6 and could go up by about a rupee.

Domestic Marketing

Mr N.E. Kumar, Managing Director, Maa Foods, which is one of the largest mango pulp units with an output of about 5,000 tonnes, says the only option is to go for domestic marketing. Fresh fruit juice consumption is on the upswing and the domestic market can help bring down the dominance of exporters.

Maa Foods is into exports and domestic marketing of fruit juices. In the last three years fresh fruit juice consumption has tripled and could continue to grow at that rate for the next 3-4 years. Increased health awareness and benefits of fresh fruits is an important reason he says.

The export market is in the hands of the traders and the processors themselves indulge in cutthroat competition. So export prices are not always at viable levels in the absence of floor prices. What is needed is an organised marketing for exports but there has not been much progress.

(This article was published in the Business Line print edition dated June 16, 2006)
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