Exports of Premium Food Items Fall On Rising Demand In Domestic Market.

Exporters of premium and quality foods find it more profitable to sell them in the home market than exporting them. The new found Indian craze for export quality speciality teas and coffee, seafood, dry fruits, spices and the famed long-grained Basmati rice is posing a new challenge for the food industry that is now looking at ways to meet the ever-increasing local demand. Prices of several products are equal to, and in certain cases, more than what foreign consumers have to pay. And clearly, no one is complaining, according to a report in The Economic Times.

“It is the emerging middle class with high purchasing power and changing food habits which is driving this consumption boom. They have become more quality conscious and are going after luxury goods. And all this will go up in the coming years given our economic growth,” says Laveesh Bhandari, director of Delhi-based economic research firm Indicus Analytics.

Coffee breaks for the globalised Indian today means beans sourced from a single estate plantation crop. And the cuppa that cheers is no longer brewed from the crush, tear and curl variety. It is green tea, orange pekoe or a muscatel. Earlier the spices were used for blending into masala powders. Now they are also used to season soups and salads. As eating out has become common, there is a huge demand for seasonings from restaurants and snack food producers. Demand for cashew has been growing at a healthy 15%. India is today the largest consumer of cashew nuts in the world. India’s well-known export, the long-grained, fragrant Basmati rice is no longer confined to the North, thanks to the arrival of new varieties half as costly as traditional ones. So it’s hardly surprising that Basmati production has increased 100% over the past three years. According to All India Rice Exporters Association domestic consumption has risen to 45% and exports now account for 35% of the total production.

In seafood, India’s traditional exports and new products are making waves. Demand for the new shrimp variety called Vannamie is growing at nearly 20-25%. Domestic demand for other delicacies such as pearl spot, seer fish and mullet is so high that the industry can’t spare enough for export. Encouraged by the growing milk consumption, the new factory farms coming up in the country are focusing on the affluent domestic consumer who is ready to pay more for pure milk. Thus, milk prices in the domestic market are growing at 20% per annum and the demand for milk is growing at 7%. There is a huge market for good quality milk and the traders don’t have to look at exports. According to Apeda, exports of dairy products declined 50% from 70,146 mt in 2008-09 to 34,779 mt in 2009-10. Domestic milk prices have remained high mainly because consumption is growing faster than production. Liquid milk and cheese are the two fastest –growing segments of dairy industry growing at 8-12% annually.

Source : fnbnews.com