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Labourers load apples after grading in Phuentsholing in August 2017
Labourers load apples after grading in Phuentsholing in August 2017

BAIL buys apples from farmers as export market shrinks

The apple export market was not good this season.

According to apple growers and exporters in the country, the export season started on a low scale in terms of rate and ended without them benefitting much.

Exporters in Phuentsholing said that the quality of grading and apple maintenance had deteriorated demand for Bhutanese apples this year.

One of the exporters based in Phuentsholing, Nim Tshering said that apple maintenance and grading should be handled properly to create demand for Bhutanese produce.

“The market in Bangladesh decreased drastically for Bhutanese apple this year,” the exporter said.

He also said that the coming of apples from China and India hit the market. The exporter who exported more than 100 truckloads in 2016 did not send more than 20 truckloads this season.

As for the price, a ton of apple fetched USD 550 in the Bangladesh market. Exporters had to return USD 50 later as the rate decreased, Nim Tshering said.

In mid August, when the season started, local traders in Phuentsholing paid farmers Nu 500 a box. The produce was exported to markets in Silliguri, Falakatta, Coochbehar, Dhupguri, Mainaguri, and Alipur, India at Nu 750 and Nu 800 depending on quality and size. A box contains 20kg of apple.

With middlemen meddling, farmers claim that they did not profit much as the price did not rise.

This situation has pushed many farmers to divert their produce to Bhutan Agro Industries Limited (BAIL) this year. BAIL office has revealed that more than 230 apple farmers have sold their apples to the industry.

A farmer, Kencho Tshering said that he sold about six to seven truckloads of apples to BAIL this year.

“There were no places to take,” he said, adding that bringing apple to Phuentsholing also added to their transportation cost. “And the price was not good in Phuentsholing.”

Although BAIL was having huge stock of apple, Kencho Tshering said that the agro company still bought from farmers.

“Bangladesh market was not good as it used to be,” the Paro farmer said, adding that he doesn’t understand why the market was not good.

Kencho Tshering said that the agro based industry paid farmers from Nu 10 to Nu 20 per kg of apple depending on the quality of the produce.

Another apple grower and exporter, Kinley Gyem from Paro also said that more farmers took their produce at BAIL this year.

“People are still selling to BAIL,” she said.

Kinley Gyem said that the apple market in Bangladesh is not good for Bhutanese apples this season, as there were better quality apples from India.

Although Bhutanese apples are good, it is still inferior compared to Indian apples.

“Ours is dark in colour and rots faster,” the exporter said.

BAIL purchased apple worth Nu 8.54 million (M) this season, its highest so far. Usually, farmers sold rejected apples to BAIL but this year even quality apples meant for export were brought to BAIL.

In 2016, the agro industry purchased apple worth Nu 6.64M as raw material. BAIL had bought apple worth Nu 3.26M in 2015.

BAIL’s general manager for farmer’s support department, Galey Tenzin in Thimphu said that farmers bring the apples to them, as they could not export.

“I don’t know much about the export situation but I think we will need to think of the next season,” he said, adding that there was a need to talk to the farmers and the traders in Phuentsholing.

Galey Tenzin said it would be better to retain apples within the country without farmers having to suffer market factors in trying to export. Prices could be negotiated depending on the quality.

Apple is one of the major exports to Bangladesh. According to figures with the Bhutan Exporters Association (BEA), the country exported 2,724MT of apples worth USD 1.28 million (M) to both India and Bangladesh in 2016.

Bhutan was able to export 2,896.19MT apples worth USD 1.35M in 2015. The country exported 6,772.42MT of apples worth USD 4.40M in 2014, the highest in the last decade.

Rajesh Rai | Phuentsholing

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One comment

  1. I do remember reading a news post on Kuensel in the past where certain officials from the region visiting Bhutan showed interest in the food processing industry considering Bhutan’s cheaper hydropower. Hydropower can also be considered suitable source of energy for an industry like food processing. Bhutan has its own food processing brands, but not a lot of them are processing apples.

    When apples can be processed for making some jams to juices, even the apple juice based energy drink market is new. Moreover, when apple ciders are popular drinks in the west and in Europe; there are not many popular Asian brands to name there. So Bhutanese apples can be branded in a different way that may create export potential for the end processed products.

    Even in the recent discussions on the BBIN agreement, the participants are considering exploring sectors like energy trading in the region. Bangladesh has showed interest in buying power from Bhutan provided India invest on the transmission corridor. If Bhutan’s food processing industry can create the brands of products to be imported taking advantage of the cheaper energy bills; it may be possible that BBIN will be handy in importing the raw materials utilising the transportation provisions for direct investments in energy consumption.

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