Top-end fruits priced out of market

For fresh fruit and vegetable marketing and distribution in Asia
Fruitnet.com Staff

BY FRUITNET.COM STAFF

Top-end fruits priced out of market

The high price of some imported fruits is barring their entry into Bangladesh this year, as the soaring cost of staples curbs the spending power of this extremely price-sensitive market

Top-end fruits priced out of market

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Stability has returned to Bangladesh’s produce sector following last year’s political riots, which paralysed the economy and prompted the President to declare a state of emergency. But now prices, and not protests, are preventing certain imported fruits from docking at Chittagong port.

Australian citrus and grapes, and US Washington apples are being pushed out of the market this year, as their higher prices and Bangladesh’s limited consumer purchasing power conspire to make them uncompetitive in this price-sensitive country.

No Washington apples arrived in Bangladesh this season, and last year (2006/07) just 1,840 bushels were exported – significantly down from the 23,277 bushels sent in 2005/06.

“Bangladesh is a price sensitive market and we are definitely seeing the effects of the higher FOB prices in Washington during the past two seasons,” says Washington Apple Commission (WAC) export marketing manager Rebecca Baerveldt. “Currently FOB prices are running almost 30 per cent higher than two seasons ago, when we shipped 23,277 bushels to that market.”

Australia stopped selling apples to Bangladesh five years ago (because they were too expensive), and this year faces a further drop in citrus and grape export volumes as shippers fail to match high-volume suppliers on price.

“The present situation for Australian export of fresh fruit (to Bangladesh) is not very positive,” says Minhaz Chowdhury, Country Manager, Australian Trade Commission. “This is due to the high price of (Australian) citrus and grapes compared to other sources, such as the US, South Africa, Egypt and China. We anticipate the volume to be down again this year compared to the regular import volume achieved two to three years ago.”

With annual per capita income around US$2,300 – compared to the global average of US$10,200 (according to Wikipedia), Bangladesh ranks as one of the world’s poorest countries. Its tropical climate, however, means it relies on imports for supplies of temperate fruits, such as apples, citrus and grapes.

The core market demands small-sized, lower-grade, cheap fruit. Only the top-income consumer bracket  – which constitutes less than 10 per cent of the population – can afford high-end imports. But in light of the rising cost of staple foods (rice prices are up 45 per cent on last year, say some pundits), this sector too is now curbing its spending.

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