July 2018 News

Corporates Look To Procure Apple From Kashmir Growers As Himachal Braces For Another Lean Season Due To Climate Change

30 July 2018
The Economic Times
Parshant Krar

Srinagar: Several corporates engaged in direct procuring apples directly from farmers are set to venture into Jammu Kashmir for the first time this year, even as apple production in Himachal Pradesh is expected to drop significantly, industry insiders said. Companies such as Adani Agri Fresh, CONCOR, Reliance Fresh, Mother Dairy and Big Basket had started direct procurement of apples in Himachal Pradesh in recent years to avoid middlemen. But drop in the output due to climate change in Himachal Pradesh had squeezed margins for companies and also increased competition in procurement. Scanty rains, less snowfall and rampant deforestation had affected the apple output in the recent years in the state. Kolkata-based conglomerate ITC Limited plans to start direct apple procurement for the first time this year. The company will buy from Himachal Pradesh as well as Jammu Kashmir, a company executive told ET on condition of anonymity. With output in Himachal Pradesh is expected to be only half of the normal level for the second season running mainly because of scanty rains in the last two months, most corporates plan to procure apple from farmers in Jammu Kashmir this season. We will buy apples directly from farmers in Kashmir for the first time and are already in talks with growers in various districts in the valley, said Kumar Aggarwal, director, marketing and procurement, at Dev Bhumi Limited. The company plans to purchase 7,000 tonnes of apple primarily for retail chains. Jammu Kashmir, largest producer of Indian apples, is expected to produce more than 17 lakh tonnes this year. The crop situation at present is good and it is likely to be normal output, a senior official of JK horticulture department said. Apple harvesting in the state begins in September and extends till November. Prices of the commodity are expected to remain firm this year due to low production in Himachal Pradesh on top of the country increasing import duty on apples to 70% for the current year, up from 50% earlier. Adani Agri Fresh, one of the first companies to procure apples directly from growers in Himachal Pradesh, is likely to restrict purchase to 22,000 tonnes this season. We are hopeful of procuring for in-house storage capacity, said a senior executive at the company. The company is a leading direct buyer of apple, which are mainly sold through various retail super markets across the country. It is unlikely to open its storage capacities for other players this season as it did last year, the executive said. Companies such as CONCOR and Reliance Fresh have pulled back from direct purchase due to loss in their ventures.