The Indian banana market is huge. With a total acreage of nearly 800,000 hectares and a production of 26.5 million tonnes in 2013, the Asian country is one of the world's top banana producers. The majority of the bananas are sold in the domestic market. In the field of ripening, Indian companies still have a lot to learn. According to Frits Popma, of Popma Fruit Expertise, using crates instead of boxes could help the sector generate a considerable profit.
"A few years ago, we tested the transport of bananas with crates from Latin America to the UK," explains Frits. "The results were positive, but not much was done to follow up on it, with the project being put on hold. Recently, however, it was resumed, this time in India. Frits Popma, along with William Kokkeel, of Eurasia Connection and the RVO, visited the Indian subcontinent. The goal of the trip was to find partners in the chain and to start negotiations aimed at improving the quality of bananas in supermarkets or the local market.
Value-added bananas
"With this specially-developed crates, with a capacity for 13 kilos (which is common in Asia), we can achieve good results in emerging markets like India and China," explains Fritz. The crates contribute to a more stable quality of the bananas in the chain. "In India, many are already working with crates, but not with suitable ones. There is a lot of air transport." The greatest challenge is to improve the country's ripening chambers, which are quite deficient. According to Frits, there is crearly a need to invest in ripening facilities, but due to the fact that bananas offer little added value in India, such an investment would not pay off. "We currently want to integrate the crates, so that bananas can ripen optimally and bring energy costs down."
The box or crate in which bananas are packed functions as a small ripening chamber; however, a box that is suitable for ripening is unsuitable to be used for transport, and vice versa. "A crate does not have that problem." By changing the crate's design you can ensure ideal air circulation without this taking a toll on the packaging's protective function.
Retail and street sales
The Indian retail, with a share of around 5%, is a small player in the Indian banana market; relatively speaking, because some 700 tonnes of bananas are handled per week. "The largest volumes are sold by street stalls; bananas in India remain an important source of nutrients for the poor."
"Let's say that a kilo of bananas in the Netherlands costs one Euro; 10% may fail to reach the expected standard, and thus the bananas eventually yield 90 cents per kilo," says Frits. "In India, a kilo of bananas may cost a Euro, but I'll be happy with anything I can get." This results in the poorer section of the population waiting until later in the day, causing prices to fall. "We explained that with proper packaging they could keep prices at acceptable levels for longer."
Cavendish and ten other varieties
As in the rest of the world, the Cavendish is the king of the sector, but in India there are about ten different varieties. "One of them, for example, is considered to have medicinal properties and yields 1.40 Euro per kilo. The Cavendish is the most common and costs about 25 cents." Crates are also especially designed for the Cavendish variety. India's small volume of exports, consisting entirely of Cavendish bananas due to their good sustainability during transport, go almost entirely to the Middle East, with the Gulf countries as the largest buyers.
"We are in contact with an Indian manufacturer which has shown interest in producing the crates," explains Frits. "We are looking for a Dutch or EU partner that can help the company in the design of the crates." The Indian banana sector still has much to learn, not only when it comes to the use of crate. "I also occasionally see Dutch companies building a ripening room, but offering no training or guidance, which naturally results in the facilities not being used optimally."
And while India is known for its high import tariffs, Frits highlights the subsidies offered by the Indian Government. This financial assistance can cover up to 50% of the investment. "The banana sector in southern India is at the forefront when it comes to developments. But it is still mostly small farms." While plantations in Ecuador will easily reach 1,000 hectares, in India growers will have an average of 0.5 hectares.
