Muted demand worries dry fruit traders this Diwali

Dry fruits industry may witness a flat Diwali this year as festive demand from corporates is muted in the face of slowdown fears and cost-cutting measures.

“The corporate demand for dry fruits has taken a hit. Sales volume this Diwali is likely to be 10 per cent lower than what we saw last year,” said Rajendra Shah from Harsh Trading Company in Mumbai and an office-bearer of the Mumbai Dry Fruits and Dates Merchants Association.

Belt-tightening

However, Shah is hopeful of a last-minute spurt in demand, which may push up sales to match the levels of last year. “But there is definitely no growth this year. In a Diwali-to-Diwali comparison, the demand is weak this year. This is because the corporates and private entities that buy dry fruits for gifting purpose are moving away to other alternatives such as chocolates or fancy handmade products to save costs,” he added.

The largely unorganised dry fruit industry is estimated to have an annual demand for 5.5-6 lakh tonnes in India. While about 40 per cent of the business is believed to take place during the 45 days around Diwali festivities, the market is largely dependent on imported dry fruits – almonds and pistachio from Iran, the US and Turkey; walnut from Chile and the US, while cashew and raisins from Africa and Afghanistan.

Sales down

“This year, sales are down. We don’t get much enquiries from bulk buyers. Mall owners, mostly the established brands such as Reliance and Bigbazaar, are importing dry fruits directly. Therefore, the business for small traders like us is muted this Diwali,” said a wholesale dry fruit trader in Ahmedabad.

To make matters worse, trade tensions with the United States have hiked import duty on dry fruits such as almonds and walnuts from the US, jacking up prices.

Almond prices in Mumbai markets hover around ₹750-780 a kg, while walnuts are quoted around ₹1,300 a kg. Cashew prices in different varieties hover between ₹1,050 and ₹1,650 a kg in Mumbai markets.

Optimism

Shaukat Ali, a cashew trader in Mumbai, believes that dry fruits being nutritionally rich and having demand from the luxury segment of consumers, there will not be much impact on their demand because of price rise or duty hike.

“There is a market for dry fruits throughout the year. Even if Diwali sales takes a hit, there will be other periods during the year when we will see sustained demand from nutrition-conscious consumers,” Ali said.

COMMENT NOW