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Zespri targets India for kiwifruit sales
5 Nov 2014
Indians are developing a taste for kiwifruit, but a duty of more than 30 per cent is a significant barrier to growing the market on the subcontinent.
This year, Zespri sold $8.4 million worth of kiwifruit to India. Sales had leapt 60 per cent in volume and 70 per cent in revenue, Zespri's regional manager for India Ben Hughes said.
A New Zealand trade delegation, led by Primary Industries Minister Nathan Guy and including Fonterra, Alliance Group and Fisher and Paykel Appliances, is visiting India.
Hughes said India was one of Zespri's developing markets, which had reached a "tipping point" in terms of consumer perception.
"Most people there don't know what kiwifruit are. We did some research last year and showed upper and middle-class Indians a picture of kiwifruit and asked them what it was. Only 36 per cent said they knew it, now this year 50 per cent know what it is," Hughes said.
He said Zespri would like to see the trade delegation take up the issue of the duty because Chile, which also exports to India, has recently signed a free trade agreement with India. That should see its duty drop to zero.
"It will certainly make it that much more difficult for us to develop the market if Chilean kiwifruit have a 30 per cent duty advantage on us," Hughes said.
India had great potential, although Hughes did not see it becoming the equivalent of the Chinese market, because the Chinese already knew the fruit.
"There is a 1.2 billion population and a middle class of 300 million and growing, so there is an opportunity to become a significant market, especially with the sungold variety, which has a sweet taste that Indians love, and gold resonates with the market there," he said.
He said most kiwifruit were sold through wholesalers, who sold to street vendors.
"It has to be a product that a street vendor can buy in one day and sell within two. That's critical, they go to wholesale market every day, and most don't have cool storage, so we're relying on our distributors to have cool-storage infrastructure," Hughes said.
The Indian government was providing interest-free loans to create cool-chain infrastructure.
Kiwifruit were less expensive than imported apples. The trade was centred on Delhi, Mumbai, Bangalore, Chennai, and Hyderabad.
The fruit is often used as a garnish. Zespri is working with celebrity chef Harpal Singh, who is making it an ingredient in Indian dishes.
Zespri also sold kiwifruit to Sri Lanka, although sales were limited by a 100 per cent duty.