Apple export sees lowest price and falling production in Bhutan
PHUENTSHOLING, Bhutan (Kuensel/ANN) - If Bhutanese apple, once reputed in Bangladesh, is fetching the lowest rates in years, there is no good news for those in the apple export business.
Exporters are saying that apple production is already falling and would fall drastically in the years to come.
With pressure from urbanisation turning apple orchards to residential and commercial hubs in the two apple growing districts of Paro and Thimphu, apple production is falling.
Kinley Gyem, an exporter based in Thimphu said that Debsi is one good place to take for an example.
“A lot of orchards were there before. It is now a small town,” she said.
What is today called E4 zone in South Thimphu was once apple orchards. “Most of the apple orchards are gone. The few remaining are not taken care like in the past,” said another exporter.
Exporter Kencho, said that it was better for orchard owners to construct a small hut and rent it out instead of relying on the cash crop. “An apple tree that bears good fruit one year would not yield the same next year,” he said. “These days, people often say that apple will not give you food anymore.”
In the early 2000s, a Semtokha landowner, Tshering, said she used to earn around Nu 150,000 (US$ 2,112) from her orchard. Last week, she auctioned her orchard for Nu 15, 000 (US$ 211). From about 200 trees, her orchard has only about 50 trees today.
“When we have to construct, the trees had to be cut,” said the landlord.
On the price, Kinley Gyem said the price this year was not good since the beginning of the export season. However, harvest is still better than the last year in some orchards, while harvests in some orchards have dropped.
Exporter Kencho blames those people involved in the apple business for the poor market value this year.
“Bhutanese are lured for high returns by traders in Phuentsholing,” he said. “Bhutanese buy at low prices in haste and take it to the border town. After the apple reaches there, the traders would manipulate and say the market has weakened due to apples from Shimla and Kashmir hitting the market.”
In the apple export business, exporters feel Bhutanese are always at the losing end. “We are giving them all the advantage. How will it benefit us?” Kencho said.
The Bangladesh market for Bhutanese apple is also dwindling, exporters say.
Nim Tshering, a regular exporter to Bangladesh said his parties in Bangladesh have said there is no market anymore for Bhutanese apples.
“While the prices are high, the quality is not good, it seems,” he said. Bangladesh parties have shown less interest in building Letter of Credits for this business, Nim Tshering said. The floor price for Bhutanese apples going to Bangladesh is US$ 600 this year.
Kinley Gyem also said that parties in Bangladesh informed her that there is no market. She stopped exporting to Bangladesh in 2017 and shifted her focus in the Indian market.
In 2018, Bhutan exported 1,860 metric tonnes (MT) of apples to Bangladesh. It was just 620.2MT in 2017. In 2016, about 1,164.20MT was exported to Bangladesh. About 1,415.88MT was exported in 2015.
According to figures with the Bhutan Exporters Association (BEA), which includes export to both Bangladesh and India, Bhutan exported 2,724MT of apples in 2016 worth US$ 1.2M. However, this is a decrease from 2,896.19MT worth US$ 1.3M in 2015, and 6,772.42MT worth 4.4M in 2014.
Market rate and quality
The best quality apple is fetching between Nu 600 (US$ 8.45) and Nu 750 (US$ 10.56) per box today in Phuentsholing, which is a slight improvement from Nu 500 (US$ 7) in the beginning of the season.
In 2018, price ranged from Nu 600 to Nu 1,000 (US$ 14) per box. A box of apple weighs about 18-20kg.
Average quality apples are fetching Nu 400 to Nu 500 per box, while the lowest category apples are fetching Nu 250 to Nu 300 per box.
In 2016, apples fetched about Nu 1,000 to Nu 1,200 per box, the highest in the last five years.
Meanwhile, traders in the border town said that Bhutanese apple always have stiff competition with the Indian apples that are properly graded before hitting the market.
A manager with the export house, Ugyen Shop in Phuentsholing said both production and quality has improved compared to last year.
“But the market value is not good this year,” he said.
The manager said that while grading of apples needed to be improved, packaging was better this year. “Farmers are bringing the apples packed in plastic crates, which is better than the wooden boxes,” he said, adding the buyers in India had lost interest in apples coming in wooden boxes.
Traders said farmers used to mix poor quality apples inside the wooden boxes to cheat. With the plastic trays, traders could not be cheated.
Ugyen Tshogkhang has exported about 150 truckloads of apple this year. Most of the apples are exported to Indian local markets in Silliguri, Assam, Cooch Bihar, and Bongaigaon.
Tagshing Chung Export owner said that Indian apples are still dominating the market and attributed this reason to falling prices for Bhutanese apple. Tagshing has exported 20,000 boxes until yesterday.