Domestic demand eating into export pie.

With India having weathered the global meltdown better than the West, rising incomes have seen the country turning into a net importer of cashew while mango exports are also down as more of the fresh fruit is being sold in the domestic market where it is fetching a good price.

India has been the largest producer and exporter of cashew kernels in the world till 2007- 08.

A senior commerce ministry official told MAIL TODAY that while India still exports cashew kernels, its imports exceed exports as the domestic consumption of cashew kernels has shot up in the last two years with the economic growth story remaining intact. Demand in recession- hit Europe and the US, on the other hand, has fallen.

As a result, individuals can afford to buy more expensive food. This trend is also visible in mangoes where exports have fallen and domestic consumption has risen, the official explained.

According to the latest figures available with the commerce ministry, while the domestic production of cashew is in the region of five to 5.5 lakh tonnes imports have risen to six lakh tonnes.

The new trend of imports exceeding exports which first surfaced in 2008- 09 and has got strengthened further, the official said. While demand in the US and Europe has dipped due to the recession, domestic demand has remained buoyant due to the economic revival.

Industry sources are of the view that the emergence of Vietnam and Brazil as important suppliers of cashew has also eroded India's market share.

Senior officials are of the view that Indian farmers growing cashew and mangoes are still making good money as domestic prices are high due to the buoyant demand.

According to sources, exports of mangoes have gone down to recession- hit US and Europe where the presence of the Indian fruit is merely "symbolic". While much was made of Indian gaining access to the US market for the country's mangoes after a protracted campaign, this has not really translated into any material gains.

The US had earlier banned Indian mangoes due to the suspected presence of fruit flies in some consignments.

The cost of exporting mangoes to the US and Europe is very high as they have to be transported by air since they have a very short shelf life.

Indian exports of the king of fruits are, therefore, confined to the neighbouring countries such as Bangladesh and the Gulf nations.

Sources disclose that the Indian Mango Festival hosted in Germany's Hamburg every year to promote the fruit in Europe will not be held this year in view of the changed economic scenario.

The festival will be held in Singapore instead as part of the publicity to the run up of the Commonwealth Games.

However, while the export of fresh mangoes has fallen there is some consolation in the fact that the export of mango pulp which falls in the category of processed food has gone up.

The value of these exports is now reported to be around $ 700 million up from $ 500 to $ 600 million a year earlier.

Source : India Today