Strong Re makes mango exports weak

Mango exports have turned bitter for traders following the appreciating rupee, with profits coming down by as much as 10 to 15 per cent this season.

While Navasari-based exporter Ajit Desai, who exports fruits mainly to the US market, among others have been hit by the stronger rupee, retailers like Reliance and ITC have claimed that the imports of foreign fruits have become cheaper this year for the same reason.

Ajit Desai, MD of Desai Cold Storage, Navasari, who was among the first to export Alphonso and Kesar mangoes to the US, said, "Till now, we have sent 20 shipments (70 MT) of Alphonso and Kesar mangoes to the US. However, our profits went down by 10 to 15 per cent as the rupee got stronger. We were expecting Rs 45 for one US $, but the current exchange rate is Rs 40.50. Though the demand has been good for Alphonso and Kesar in the US and Japan, the returns for exporters have taken a dip."

Desai has also exported other fruits like papayas, chickoos, grapes and bananas to the US. "In all we exported 1,200 MT of fruits to the US and other countries like Japan, Malaysia, the UK , Europe, Gulf countries, Singapore and Germany, this year. The stronger rupee has eaten a major share of our margins," Desai added.

Other than fresh fruits exports, companies that export processed agro products have also suffered from the rupee appreciation. India's major processed food exporter ITC has also felt the pinch. Speaking to Business Standard, Ninad Bhosle, vice president, international business division, ITC, said, "We have sent 15 containers of mango puree to the US this year. The rupee appreciation has certainly hampered exports this year. The exports could have been much brighter if the exchange rates were normal as the two major importers, the US and Japan, have lifted the ban on Indian mangoes this year. The Indian exporters have not only suffered in the US and Japan markets, but also in other export markets like the UK, Europe, South Asia as well as the Gulf countries."

However, the impact of the stronger rupee on the quantity of mango exports is not so major as the demand of high-end customers in foreign markets has grown. Speaking to Business Standard, Vijay Kumar, vice president, international business retail division, Reliance Industries, said, "The quantity of mango exports has not suffered because of the appreciation. The exporters might have felt the brunt of rupee appreciation as it has eaten into their profits. But the volume of exports has not suffered as the demand for Indian mangoes is quite high in the US and Japan, which have opened their markets for the mango exporters this year. Though the volume of mango exports is lower compared with other fruits such as grapes, bananas and papayas, the factor which has sustained the mango exports, despite an appreciating rupee, has been the higher end customers in the US and Japan, who do not mind spending more." Reliance exports fruits to the US, Japan, Singapore and Malaysia.