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Institute for Financial Management and Research

Centre for Development Finance
Working Paper Series
July 2006
Pineapples
Cherry Jacob and Madhavi Soman
Something about authors comes here. The views expressed in this note are entirely personal and
should not be attributed to any of the Institutions with which they are associated. If necessary,
thanks can also come here. Interviews: Mr. Shashi Kumar, Managing Director, Nadukkara Agro
processing Private Company Limited, Muvattupuzha, Kerala; Mr.Baby John, President, Pineap-
ple Growers’ Association Muvattupuzha, Kerala; Mr. K. P. Kuriakose, Head, Pineapple Research
Station, Vazhakkulam Kerala; Horticulture Department, North Eastern States
Jacob & Soman : Pineapples
Contents
1 Product Overview 4
1.1 Species and Cultivars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Pineapple products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 Global Outlook 5
2.1 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Global Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2.1 Fresh Pineapple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2.2 Processed Pineapple (Juice and Canned) . . . . . . . . . . . . . . . . . 17
3 Pineapple - Indian Scenario 21
3.1 Production, Area, Yield, Growing Areas . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Markets-Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3 Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.5 Process and related equipments . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.6 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.7 Organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.7.1 Significant parties within the supply chain . . . . . . . . . . . . . . . . 39
3.7.2 Significant parties outside the supply chain . . . . . . . . . . . . . . . 40
3.8 Challenges in Pineapple Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.9 Intervention plan for pineapples by National Horticultural Mission . . . . . 44
4 Case Study 45
5 APPENDIX 52
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Executive Summary
Traditionally Pineapple enjoyed the status of an exotic fruit, so uncommon and coveted a
commodity that it came to be known as the Treat of Kings. Though there exists several
hundred varieties, the most widely grown are Smooth Cayenne, Queen and the recently
(in the past decade) introduced variety called MD2. Pineapple Production is concentrated
In Tropical Regions of the World. The main producers are Thailand, the Philippines,
Brazil, China, India, Costa Rica, Nigeria, Kenya, Mexico, and Indonesia. The seasonality
of the pineapple production is spread throughout the year for most of these producers.
Pineapple is one of the most internationalised fruit traded globally, it is second only to
bananas and citrus in this respect. The major pineapple products are canned slices,
chunks, crush, juice and fresh fruit. Estimates given by Pineapple world market shows
that nearly two pineapples in five are traded on the international market and sold fresh or
processed. Processed pineapple products, such as juices, largely dominate this market,
accounting for 80 percent of the trade). More than 6 million (44 percent) of the 14 million
tones grown are destined for export, which is significant in comparison to Mango and
Banana. The world market for pineapple and pineapple products had been valued at
2.8mn for the year 2004. There is also is a certain specialisation of origins or production
regions in types of product. Asia preferentially grows pineapple for processing and export
(canned and juice). Fresh pineapples are exported from West Africa, Central and South
America and the Caribbean. About 60 percent of the world’s fresh pineapple exports
come from Costa Rica, the Ivory Coast, and the Philippines. Costa Rica, Indonesia, the
Philippines, Thailand, and Kenya gear a significant proportion of their production towards
international markets. Costa Rica and Ivory Coats are the main exporters to both EU
and US markets Their combined exports of fresh canned, and juice pineapple products
comprise far more than half of world export supplies. More than 80% of the pineapple
imports in the world is into EU and US. Out of this 20% share is of the US. In Asia,
Japan is the leading importer with about 6% share of world imports. The processed
category is completely dominated by Asian countries, Thailand, Philippines and Indonesia
holding more than 50% of the total volume of exports and is the main suppliers to EU
and US. Trade prospects for developing countires are very promising as pineapple is
rated as underachiever implying huge potential to be tapped by improving the bottlenecks
in supply capacity and for dynamic export expansion. Varietal innovation has seen a
significant impact on pineapple trade with the advent of MD2 in 1996, resulting in strong
position for Costa Rica in the fresh pineapple export market. MD2 marketed by Fresh Del
Monte Produce (FDMP) Inc. under the Del Monte Gold
˚
UExtra Sweet Pineapple brand, has
taken up more than 50 percent of the worldwide market. MD2 today fetches a significant
price premium of 75 percent over the Smooth Cayenne price, its immediate competitor,
with a similar price structure and a gross margin that can be estimated at more than 30
percent of net sales. Pineapple is estimated to hold immense potential in International
trade especially for developing countries, which are the main producers of the crop.
In order to tap the potential of the international pineapple trade, the current paper
intends to site India’s position in pineapple production and trade globally. An analysis
at the aggregate level has been done in order to understand the pineapple production
chain in terms of the product, market, policy, infrastructure, organisation, equipment,
processes and information.
India is the fifth largest in pineapple production in the world with 8% of the world
production of about 1.3mn tonnes. Main varieties are Kew and Mauritius, the former one
is concentrated in the north eastern states and is mainly suited for processing while the
latter is mostly cultivated in Kerala and is suitable table variety. Pineapple production in
India is concentrated in the West Bengal, Kerala, North Eastern states and Karnataka.
These areas have very suitable climatic conditions for large-scale production of pineap-
ple. The current export market for India is primarily Middle East and exports to EU are
minimal. On an aggregate level, India is viewed to have a conducive environment for the
development of pineapple production and exports. In spite of the huge production base
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there exists several significant challenges/characteristics for developing an export supply
chain for pineapple targeting EU and US markets:
• There has been no major export initiatives to EU or US which are consumer driven
markets where quality and consumer preferences would be big challenge. Conse-
quently there has been no export reorientation in the sector. Production systems
need to be reoriented for exports, as the variety that is in demand in these markets
currently is MD2 where as the production in India is centered on Giant Kew and
Mauritius. Therefore variety development and export oriented production is essen-
tial.
• The existing APMC act whereby farmers can only sell through the APMC is leading
to lot of chain inefficiencies due to extensive intermediation. This act is also main
hindrance for the successful implementation of contract farming initiatives.
• Infrastructure provision for pineapple is another area, which needs attention specif-
ically in the post harvest and cold chain logistics. Pineapple is very sensitive to
temperature variation causing internal browning which is the most problematic oc-
currence.
• Quality assurance system such as EUREPGAP needs to be implemented at the farm
level and farmers need to be trained in documentation and the relevant practices in
production.
• Availability of credit is another factor as the cultivation of pineapple is quite capital
intensive.
• Targeting high premium and competitive markets such as EU and US markets
through Market development, brand building and promotion needs to be under-
taken in this markets
• High Cost of processing and outdated processing technology is detrimental in com-
peting in international markets Adopting advanced processing technologies leading
to high realisation and quality produce is absolutely important.
The subsequent case study of pineapple chain in Ghana contributes key insights on
an initiative, which lead to the acceleration of pineapple exports from Ghana to EU.
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1 Product Overview
The pineapple (Ananas Comosus) is one of the most popular tropical fruits. The origin of
the pineapple is the American continent, probably Brazil and Paraguay. The pineapple
is believed to have originated in southern Brazil and Paraguay and was spread by the
Indians to other parts of South and Central America. The Spanish and English explorers,
however, were responsible for the introduction of this once rare fruit to other parts of the
world. It has spread throughout tropical and subtropical regions as a commercial fruit
crop. For best fruit quality the plant has specific environmental requirements such as
mineral rich soil that is moist but well drained, low humidity, full sunlight, and temper-
atures that do not get below 0
o
C or above 32
o
C. This environment can be found in many
tropical countries.
1.1 Species and Cultivars
In international trade, the numerous pineapple cultivars are grouped in four main classes:
’Smooth Cayenne’, ’Red Spanish’, ’Abacaxi’ and ’Queen’, despite much variation in the
types within each class.
The predominant cultivar in production is ’Smooth Cayenne’, which with its attractive,
flavorful, seedless fruit, and importantly, the lack of spines on leaves. These characteris-
tics, along with large fruit size and high yield ensured that it was the most desirable form
of the plant for worldwide dissemination. Furthermore, the ease of vegetative propagation
and lack of seed production contributed to preserving its genetic constitution. This is by
far the most important variety in the world trade.
’Queen’ and its derivatives are grown in South Africa and Australia for fresh market.
Its small fruits have a higher sugar/acid ratio and ship better than ’Smooth Cayenne’.
’Spanish’ contains ’Red Spanish’, probably the second most important cultivar of pineap-
ple, and the major fresh market cultivar of the Caribbean. It is more disease resistant
and ships better than ’Smooth Cayenne’, and is smaller, rounder, redder, and has fewer
eyes. The ’Abacaxi’ are of local interest only in tropical America.
’MD2’ is a hybrid developed by the Hawaiian Pineapple Research Institute. It gives a
medium to large (1.3-2.5 kg) cylindrical, square-shouldered fruit, with large flat eyes, and
an intense orange-yellow colour. The clear yellow pulp is sweet, compact, and fibrous.
It is high in sugar (15-17
o
Brix) and ascorbic acid but lower in total acid than ’Smooth
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Cayenne’. ’MD2’ is resistant to internal browning, but susceptible to fruitlet core rot, and
more sensitive to Phytophthora than ’Smooth Cayenne’. This variety is perceived as "a
variety that changed the pineapple world". It is also an illustration of the importance of
product differentiation in the market for horticultural goods. Since its introduction in
1996, the MD2 pineapple cultivar, developed and marketed by Fresh Del Monte Produce
(FDMP) Inc. under the Del Monte Gold
˚
UExtra Sweet Pineapple brand, has taken up more
than 50 percent of the worldwide market (United States, Europe, and Asia) for branded
fresh pineapple. MD2 today fetches a significant price premium of 75 percent over the
Smooth Cayenne price, with a similar price structure and a gross margin that can be
estimated at more than 30 percent of net sales.
1.2 Pineapple products
The major pineapple products are canned slices, chunks, crush, juice and fresh fruit as
given in the following Fig 1. Approximately 70% of the pineapple is consumed as fresh
fruit in the country of origin itself and canning is minor industry, which has reduced to
60% by 2000 (Rohrbach. K. G. et al. 2003).
2 Global Outlook
2.1 Production
Pineapple Production is concentrated In Tropical Regions of the World. Because pineap-
ples grow and yield best in areas with warm and relatively uniform climate year round,
current production remains restricted to the tropical regions of the world7. Interesting
enough, prior to 1950 Hawaii produced 70% of the world’s pineapples.
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Presently, the total global production in the world is 15 million metric tonnes produced
by approximately 80 countries around the world. Many of these producing countries have
little presence in the world market as most of their production is intended for domestic
consumption. Nearly three-quarters of world supplies are produced in Thailand, the
Philippines, Brazil, China, India, Costa Rica, Nigeria, Kenya, Mexico, and Indonesia (fig.
3). The seasonality of the pineapple production is spread throughout the year for most of
these producers.
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2.2 Global Trade
Eaten mainly in the production zones after sale on local or regional markets, pineap-
ple has the special feature of being a strongly internationalised fruit Pineapple has a very
important position in the economies of many countries and on all fronts (canned fruits,
juice and fresh fruits). Another feature of the market (Loeillet, 2003) is a certain spe-
cialisation of origins or production regions in types of product. Asia preferentially grows
pineapple for processing and export (canned and juice). Fresh pineapples are exported
from West Africa, Central and South America and the Caribbean.
The estimates given by Pineapple world market in show that nearly two pineapples
in five are traded on the international market and sold fresh or processed. This is a
major feature of the sector, which has strengthened continuously in recent years after
stagnation or decrease in the mid-1990s. Processed pineapple products, such as juices,
largely dominate this market, accounting for 80 percent of the trade (Danielou and Ravry,
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2005). More than 6 million (44 percent) of the 14 million tonnes grown are destined for
export. This is significant compared to other widely traded produce such as Mango and
Banana.
Among the top 10 producers, Costa Rica, Indonesia, the Philippines, Thailand, and
Kenya gear a significant proportion of their production towards international markets.
Their combined exports of fresh canned, and juice pineapple products comprise far more
than half of world export supplies. World trade (imports) in pineapple consists of three
main products: fresh fruits (1.7mn Tons), juice (0.7mn Tons) and canned.(1.1mn Tons)
Trade prospects for Developing countries (DCs)
Pineapple in both fresh and juice form is assigned an underachiever in the classifi-
cation done by ITC (International trade Centre, UNCTAD/WTO) as indicated in the table
below. Underachievers are product, which is expected to have potential which has not
been fully utilized. Underachievers include products presenting particular challenges for
trade promotion efforts. While international demand has been growing at above-average
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rates, exports from DCs have either declined or have grown less dynamically than world
trade. As a result, DCs have been losing international market share. In general, the
bottleneck is not international demand but the supply side of the market. This is espe-
cially true when looking at the picture of an individual country rather than a group of
countries, like the DCs. For these products, it is essential to identify the bottlenecks for
increasing supply capacities and for more dynamic export expansion.
2.2.1 Fresh Pineapple
About 60 percent of the world’s fresh pineapple exports come from Costa Rica, the Ivory
Coast, and the Philippines. While considered a smaller producer than other leading
African pineapple-producing countries such as Nigeria and Kenya, the majority of pro-
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duction in the Ivory Coast is exported, mostly to European Union nations. The United
States is a net importer of pineapples, but even so, it is the world’s fifth largest exporter
of fresh pineapples, accounting for about 4 percent of world fresh volume.
More than 80% of the pineapple imports in the world is into EU and US. Out of this
20% share is of the US. 77% of the US imports are from Costa Rica. Costa Rica dominates
the pineapple exports to most of EU countries as well except for France where Ivory Coast
is the main supplier. Ivory Coast supplies more than 50% of Russian market followed by
Cost Rica with about 20% of supply. In case of exports, excluding the major re-exporters
such as Belgium and Netherlands, the exporters are Costa Rica, Ivory Cost, Philippines,
United States, Honduras, Ecuador, and Thailand. The share of top ten producers in
exports are negligible with the exception of Costa Rica which has a share of 20% followed
by Philippines (9%), Thailand and Mexico with 1% each. Other noteworthy aspect is that
Ivory Coast with just about 1% share in production occupies 14% share in exports and
Honduras and US with 1% production each export 3% and 5% of world export share.
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Global Pineapple Trade balance changed by Varietal Improvement
Introduction of MD2 variety (refer section 1.2) in 1996 has resulted a surge in the
fresh pineapple export from Costa Rica to EU and North American markets. Since its
introduction in 1996, the MD2 pineapple cultivar, developed and marketed by Fresh Del
Monte Produce (FDMP) Inc. under the Del Monte Gold-Extra Sweet Pineapple brand, has
taken up more than 50 percent of the worldwide market (United States, Europe, and Asia)
for branded fresh pineapple MD2. Through intense promotion and efficient distribution
network, MD2 today fetches a significant price premium of 75 percent over the Smooth
Cayenne price, with a similar price structure and a gross margin that can be estimated
at more than 30 percent of net sales (Danielou and Ravry, 2005). The development of
the pineapple variety had led to change in the international exporters of pineapple where
Costa Rica emerged as largest exporter surpassing Ivory Coast over a 15-year period.
Côte d’Ivoire alone had a 30 percent market share in 1996 and 1997, while Costa Rica
accounted for less than 7 percent (Loeillet, 2003). This is due to the reason that there has
been the replacement of the variety, available on a market hitherto dominated by Smooth
Cayenne, by MD2 following investment by the multinational Del Monte in the production
sector in Costa Rica.
European Union Market
EU Imports
Pineapple is categorized in the tropical and subtropical fruits in the EU market. Though
initially perceived as an exotic fruit, fruits such as pineapple due to quick and success-
ful introduction into the EU market is no longer considered exotic fruit. Imports of fresh
pineapple in the European market quadrupled between 1980 and 2002, from 90,000 tons
to 370,000 tons. The exports of fresh pineapple are divided between Latin American and
Sub-Saharan African exporters. Pineapples are an interesting market segment in France,
as it forms a relatively large import amounts, compared to other EU member countries
approximately about 105 million Euros in a period of 2001-2003. So also, compared to
the other EU member states, pineapples are a relatively sizeable import product in Italy
and Belgium where imports of pineapples increased considerably, reaching 86 and 151
million Euros respectively. In the case of UK, though pineapples represent only a small
share of total fruit imports, imports had increased considerably in terms of both value
and volume between 2001 and 2003. The total pineapple imports by EU member coun-
tries increased almost 40 percent in value and 20 percent in volume, amounting to 625
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million Euros / 666 thousand tonnes in 2003. In the same year, Belgium was the leading
EU importer of pineapples, accounting for 24 percent of the total imported value, followed
by France (17%), Italy (14%), Germany (10%) and Spain (9%). The total share of pineapple
imports from developing countries to EU is 64%.
The leading suppliers to the EU are France and Belgium within EU and Costa Rica
and Ivory Coast from the extra EU.
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North American Market (USA)
The US pineapple production is centered in Hawaii and has been on a decreasing trend
as indicated in the figure.
In the face of declining domestic production, imports have played a growing role in
meeting U.S. demand for pineapples. U.S. pineapple imports (all products) as a share of
domestic pineapple consumption rose from 38 percent during the 1970s to 82 percent
since the mid-1990s. Pineapple imports constitutes 7% value of US fruit imports by share
(Lucier et al, ERS, 2006).
In the early 1980s, Mexico was the major supplier of U.S. fresh pineapple imports.
However, since the 1983 Caribbean Basin Initiative established duty-free status, imports
from Central America have increased. Throughout the 1990s and in more recent years,
imports from Mexico have been dwarfed by imports from Costa Rica and Honduras. Costa
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Rican shipments of fresh pineapples to the U.S. market increased 473 percent during
the period 1993-2002, reaching 765.1 million pounds. With rapid production growth,
particularly of the now popular sweet variety, Costa Rica has strengthened its role in the
U.S. fresh pineapple market, supplying about 85 percent of total fresh import volume
during 2003, up from 57 percent in 1993 which has dipped to 77% in 2004.
This is mainly due to the investments made by Del Monte, a company that historically
received subsidies from the Costa Rican government for the production and export of
pineapples. Ecuador and Guatemala increased their market-share six-fold during a pe-
riod from 1998-2004 while Mexico and Honduras saw their market shares halved. While
Guatemala’s growth has been erratic, Ecuador has shown a steady growth path and is
now the second most import exporter to the US market behind Costa Rica major portion
of the remaining share of fresh imports is sourced from Honduras, Ecuador, and Mexico.
Declining production, particularly in the last 5 years, has reduced the competitive posi-
tion of Honduras in the U.S. fresh pineapple market. Its share of total fresh imports fell
by more than half to 5 percent in the 5-year period 1998-2002, not far from the shares
held by Ecuador and Mexico. Seasonality of imports of these countries is given in the Fig
12.
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Asian Pineapple import market
The biggest pineapple import market in Asia is Japan and Korea, which constitutes
together 8% of the world imports. Import market share of other major importing countries
are given in the Table 9 below.
2.2.2 Processed Pineapple (Juice and Canned)
Pineapple processing is closely linked to Asia. Thailand and the Philippines also dominate
world pineapple juice exports, accounting for more than half of total volume. The volume
of juice exports has steadily increased to 739,889 mt in 2000 from 183,380 mt in 1988
(Source, FAO). Among exporters of juice (both concentrate and single strength) Thailand
and Philippines share a significant percentage share of the world trade i.e., 21 and 19
respectively and Indonesia has a 5% share. The combined share of 22% by Netherlands
and Germany are value added re-exports. In the case of pineapple juice concentrate
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market share Indonesia and Philippines are the main exporters with a combined market
share of about 50%. Indonesia alone had a market share of 30% in 2004 from a 4%
market share in 1993, where as Thailand and Philippines dominates the single strength
juice category each sharing a 26% market share in 2004. Nearly 80 percent of world
canned pineapple exports come from Thailand, the Philippines, and Indonesia. Thailand
holds the largest share in the world canned pineapple exports with a 42% share followed
by Philippines (18%), Indonesia (12%) and China (6%) and Kenya (5%).
The main suppliers of processed pineapple to EU are Thailand, Philippines and In-
donesia excluding the re-exporting countries such as Netherlands and Germany.
In US Canned and juice imports each account for approximately 40 percent of total
import volume. The remaining 20 percent represent imports of fresh pineapples. While
both canned and juice imports represent a larger share of domestic consumption, the gain
in share of fresh imports has been stronger in recent years. The Philippines, Thailand,
and Indonesia continue to be the major suppliers of both juice and canned pineapple to
the U.S. market. These countries contributed 92 percent of juice imports and 89 percent
of canned imports in 2002. The Philippines alone accounted for 42 percent of canned
pineapple imports and 51 percent of pineapple juice imports in 2002. Although still far
behind in terms of volume shipped to the United States relative to the top three suppliers,
the quantity of canned pineapples imported from China and the Republic of South Africa
has grown significantly in the last 5 years. China’s share of U.S. canned imports has
risen from less than 1 percent early into the 1990s to around 4 percent over the last 5
years. Similarly, the Republic of South Africa’s share rose from less than 1 percent to 3
percent.
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3 Pineapple - Indian Scenario
Product
India is the world’s 5th largest producer with 8% of world production of 1.3 mn tones.
Pineapple in India is the fifth in production volumes above the grapes. The varieties
popular in India are Kew, Queen, and Mauritius. Kew produces large fruits and is mostly
used for canning. The other two have smaller fruits that are considered to be of superior
quality. Kew is a late fruiting variety. Queen is early, while Mauritius is intermediate.
High yields in India could also be due to the large scale production of Kew variety.
Pineapple is a perennial fruit crop and the returns continue, usually, for a period
of 3 years in case of variety ’Mauritius’ and 4 years in case of variety ’Kew’. With the
application of Ethephon and fertilizers the first yield is obtained with in 8-12 months
(Beegam and Padmini, 2004).
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3.1 Production, Area, Yield, Growing Areas
The major pineapple producing states in India are, West Bengal and Kerala Karnataka
and other than the North Eastern States such as, Assam, Meghalaya, Manipur, and
Arunachal Pradesh (CMIE, 2005). The main varieties grown in West Bengal and North
Eastern States are Giant Kew and Queen. During 2003-04, India produced 1.31 million
tonnes of pineapple from about 90000 ha. The state-wise area production and productiv-
ity during 2003-04 are presented below. Bihar has a very less area under production but
the productivity is relatively high at 29.4Tons/ha.
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Varieties
The most popular commercial pineapple variety in India is Giant Kew (variant of
Smooth cayenne) and Mauritius (a variant of Queen). Other important verities are Queen,
Kew, Mauritius, Charlotte, Rothschild, Jaldhup, Desi, Lakhat, etc. Qualitatively, Queen
is the outstanding table variety.
Comparative advantage of Kerala pineapple
Kerala has exclusive advantage in producing Mauritius variety, which is highly suit-
able for export market. The pineapple growers to a large extent are now adopting the
modern cultivation practices like high-density planting, hormone application for unifor-
mity in flowering and other management practices. The pineapple fruits are consumed
as fresh fruit or made into products like jam, squash, candy etc., for value addition. The
variety proposed for cultivation is Mauritius since huge internal market as well as export
potential is available. Its advantages include longer shelf life, sweetness and can be con-
sumed as fresh fruits. Sea shipment protocol for export of pineapple has been developed.
Supply chain for pineapple from Kerala is identified to be the most competitive for the
domestic market due to the varietal advantage as there is price difference in the range of
1-2 Rs/Kg between Mauritius and Kew in the favour of Mauritius. Consumer preference
for Mauritius is huge due to the fact it is most suitable for edible purpose and Giant Kew
and Queen are best suitable for processing.
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Potential of North Eastern States in Pineapple production
The North Eastern Region of India comprising of the states of Assam, Arunachal
Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura offers immense
potential for pineapple production and processing, especially in view of the support mea-
sures formulated by the Indian government in promoting the horticultural development
in these states. The total production in all these states would amount to 30-35% of
the total Indian production. The suitable pineapple growing areas with tropical climatic
conditions in the North Eastern States are given below (Dubey et al, 2002).
3.2 Markets-Exports
India’s main export markets for pineapples is middle east. The export data and the
destinations for the export markets are listed in the table below and the Spain is the
only European country to which India is exporting Fresh Pineapples and in the processed
category apart from the middle east countries, India is exporting to UK, Norway and
Netherlands (which is mainly a re-export destination).
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3.3 Policy
AEZ policy
A significant thrust is given to international trade in agriculture with a farm-to-port
approach as reflected in the Agri Export Zones Scheme in the proposed Agri-Export Policy.
The design is to transform select rural regions as regional rural motors of export economy
by promoting export of agro products and agro-based processed products. Agri Export
Zones would be identified which will provide enhanced international market access to
Indian farmers. On invitation and in consultation with the State Governments, this will
catalyse development of necessary infrastructure, flow of credit and other facilities for
promoting agro exports. These AEZ’s are so designed that the entire value chain starting
from the farm up to the final retailing unit can be strengthened. Provision for good quality
inputs like modern seeds for exportable and processable varieties of fruits and vegetables;
pre and post harvest technologies for farmers. Storage and warehousing facilities, storage
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and warehousing facilities, good transportation and communication networks, sources of
finance, export friendly infrastructure like ports, inland container depots and quality
assurance laboratories all converge within an AEZ to boost exports (IDF Report, 2005).
Food Parks
The Ministry of Food processing has released a total assistance of Rs.105.22 crore to
implement the Food Parks Scheme. It has so far approved 50 food parks for assistance
across the country. The Centre also plans Rs.100 crore subsidy for mega food processing
parks.
Transport assistance
Government of India is providing grant of Transport assistance for Horticulture and
Processed Food Products by Air and Sea is available for export of fresh and processed
fruits, vegetables, floriculture, poultry, dairy products and products of wheat and rice.
This is implemented through APEDA (APEDA, 2006). The specific transport assistance
provided to the northeastern states, which would be relevant to pineapple trade from
these regions, is specified in a section below Contract farming policy.
The Government of India have provided in the Model Act amending the APMC Act.
It redefines the role of present Agricultural Produce Market Committee to promote al-
ternative marketing system, contract farming, direct marketing and farmers/consumers
markets. This would lead to the introduction of the contract farming system in the States.
The main features of the contract farming are that farmers grow selected crops under a
buy-back agreement with an agency engaged in trading or processing of such produces.
The contractual agreement with the farmers provides access to production services and
credit as well as knowledge of new technology. Contract farming has been allowed in
all three phases - market-specification, resource providing, and production management.
The Contract Farming Sponsor only needs to register himself with the Market Committee
concerned, or a prescribed officer. In addition, the agricultural produce covered under
the Contract Farming agreement is allowed for selling outside the market yard and in
such a case, no market fees would be imposed on it. Disputes arising out of contract
farming agreement are referred to the prescribed authority, who would resolve the dis-
pute within thirty days after giving the parties a reasonable opportunity of being heard.
Disputes relating to and arising out of contract farming agreement are not to be called in
question in any court of law, if not specifically mentioned earlier. The decision made by
the authority in enforceable as it is equivalent to the decree of the civil court. In addition,
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Jacob & Soman : Pineapples
provisions for dispute resolution between private market or consumer market and market
committee is also outlined in the model law.
FDI Policy in horticulture
India has one of the most transparent and liberal Foreign Direct Investment (FDI)
regimes between emerging and developing economies. Though FDI is restricted to basic
agriculture and plantations, 100% equity is also allowed in non-crop agro-allied sec-
tors (agro-processing) and crop agriculture under controlled conditions (green houses).
Therefore, FDI is allowed in Tea Plantations, Floriculture, Horticulture, development of
seeds, Animal Husbandry, pisciculture and Cultivation of Vegetables, Mushrooms etc.
under controlled conditions and allowed in services related to agro and allied sectors.
The Government approved 105 proposals between January 2002 and May 2005 from for-
eign industrialists to set up food processing industries in India involving Rs.643.47 crore.
The Government has promoted a 100% FDI in the food processing sector excluding food
retailing, plantations and alcoholic beverages.
Cold Storage Act
Cold Storage Act30 (IDF Report, 2005), which necessitated the license requirement
from the state or central government, has been repealed. This act enacted in 1980 had
an adverse impact on growth of cold storages as the rentals where not raised in the
government control and the business becoming unviable and unprofitable. Cold storage
are of crucial importance for the horticultural production due to the perishability factor
and as the cold storages also help break the seasonality in the availability of fruits and
vegetables there by balancing demand and supply. The repeal of this act avoided the
licensing procedure and would make it an attractive investment.
NHM
National horticultural mission31 has been launched as Central Sector Scheme to pro-
mote holistic growth of the horticulture sector through an area based regionally differ-
entiated strategy. The mission is to double the horticulture production by 2010-11. The
scheme will be fully funded by the Government and different components proposed for
implementation financially supported on the scales laid down.
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Funding/Financial schemes
NHM has financial assistance under the following heads:
• Research
• Plantation Infrastructure and Management
• Post harvest Management
• Mission Management
NHB has several financial subsidy mainly back-ended capital investment subsidy
schemes for the development of Horticulture:
1. Development of commercial Horticulture through Production and Post-Harvest Man-
agement
2. Capital Investment Subsidy for Construction / Modernization Expansion of Cold
Storage and Storage’s for Horticulture Produce
3. Technology Development and Transfer for Promotion of Horticulture
4. Market Information Services for Horticulture Crops
5. Horticulture Promotion Services (including terms of reference for Techno-economic
Feasibility Study)
APEDA
APEDA provides financial assistance for the export promotion and trade development
of fruits and vegetables. The Schemes are available for
1. Schemes for Market Development
2. Scheme for Infrastructure Development
3. Schemes for Quality Development
4. Schemes for Research and Development
5. Scheme for Transport Assistance (domestic and Export)
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Jacob & Soman : Pineapples
In addition to the central government schemes described above, the state agricultural
departments have schemes for the promotion of horticulture. For instance, the Maha-
rashtra State Agricultural Marketing Board provides subsidy scheme for cold storage
construction in Maharashtra State.
Special focus on North Eastern States for Horticulture
Active promotion on developing horticulture in the North Eastern States is a favorable
factor for the promotion of pineapple cultivation in these states. Various government
departments have formulated specific policies to this effect. Following are found to be the
most relevant.
• Technology Mission for Development of Horticulture in North Eastern Region includ-
ing Sikkim which has an outlay of 6600 mn Rs (143 mn US$) which is to ensure
adequate, appropriate, timely and concurrent attention to all the links in the pro-
duction, post harvest and consumption chain
• For the development of the North-Eastern region, NABARD (National Agricultural
and Rural Development) has been making special efforts through refinance on liberal
terms and other supportive measures for strengthening the rural credit delivery
system
• Department of Commerce (Annual Report, 2004) has allocated 10% of the total out-
lay amounting to 36 crores under the schemes Assistance to States for Development
of Export Infrastructure and other activities (ASIDE) scheme. An Export Develop-
ment Fund (EDF) has also been set up with the objective of using the resources
for the development of exports from the region and has made APEDA as the nodal
agency for executing the scheme.
3.4 Infrastructure
India has one of the largest Road Networks in the world aggregating to more than 3.5
million km. National Highways Development Project (NHDP), the largest infrastructure
development project undertaken in Independent India, envisages development of 14000
km of world class 4/6 lane Highways connecting all corners of the country. Railway
network is one among the largest in the world covering over 1 lakh track kilometers.
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Cold Storage Infrastructure
Commodity wise distribution of cold storage facility available in the country is as given
below:
Considering the total cold storage capacity available and the increased production due
to increase in productivity etc., there is still a wide gap between production and cold stor-
age capacity. This results in severe losses to farmers due to inadequate storage capacity.
The requirement of cold storage with respect to perishables (fruits and vegetables) had
been quantified in NHM plans.
Process Infrastructure
Agri Export Zones
In view of the international demand for processed pineapple products and also on ac-
count of the concentration of pineapple growing in the district of Siliguri and Jalpaiguri of
West Bengal, a proposal was mooted for setting up such a zone. This project entails devel-
opment of the produce through research and extension by a dedicated team of personnel,
setting up of processing plants by private entrepreneurs and concerted market efforts.
As per the proposed projections, the total investment of Rs. 35.59 crores is envisaged,
out of which Rs 31.44 crores will come from the private entrepreneurs for setting up of
processing plants. The remaining amount will come from various Government Agencies
like Ministry of Food Processing Industry, National Horticulture Board, Ministry of Agri-
culture and APEDA. This investment is anticipated to lead to projected exports of around
Rs. 127 crores in the next 5 years. The target areas identified for these are Jalpaiguri,
Darjeeling, Coochbehar, Uttar Dinajpur.
Tripura, with its inherent strength in pineapple growing especially with regard to or-
ganic cultivation of this crop and the price competitiveness of pineapple products in the
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Jacob & Soman : Pineapples
international, an Agri Export Zone for organic pineapple is also being setup. The Zone
will cover districts of Kumarghat, Melaghar and Matabari. This project involves a total
investment of around Rs. 16 crores, out of which Rs. 8.11 crores will flow from the
Central Government agencies, Rs. 1.16 crores from State Government agencies and the
remaining by the private sector. Exports are expected to reach a level of Rs. 10 cores per
annum within the next 4 years.
Every state in the Northeast has a fruit-processing factory mainly the canning type.
The processing is simple using the time tested ’Hot and Fill’ method and packing is in
cans. The products are slices, titbits and fruit cocktails. Since these plants use the ele-
mentary technology, they produce products of different qualities and volumes produced
are so small (Asopa, 2003).
NERAMAC
A state of the art pineapple juice concentrate plant was set up in 1988 by the Gov-
ernment of India at Nalkata, Tripura. Costing Rs.3.62 crore with a capacity 48MT/day,
it was supposed to be a state of the art fruit juice processing plant with aroma recovery
and aseptic packaging facility. NERAMAC does not have a canning unit and its aseptic
filling machine was de facto never commissioned. In absence of a running aseptic line,
NERAMAC is producing concentrate and supplying that by reefer vans at -18
o
Celsius to
Dabur Nepal for their REAL brand of tetra pack for retail marketing. This facility is cur-
rently being severely underutilized due to insurgency and inconsistent supply problems
(Ibid).
NAPCL
Under the Kerala Horticulture Development Programme, a modern fruit processing
factory for the commercial processing of pineapple, mango and other fruits has been
established in the heart of Kerala’s Pineapple growing area Nadukkara, Avoly panchayat
near Muvattupuzha (Asopa, 2003). The Company, Nadukkara Agro Processing Company
(NAPCL), that operates the plant was established as a public limited company with target
farmers holding 70 per cent share and the Government of Kerala 30 per cent share.
The plant has a state of the art technology and the latest equipment because of the
support from the EU during the initial period. The factory has aseptic packaging as well
as canning units. NAPCL has its own brand of pineapple juice called "JIVE" and can
process 60 Tons of pineapple per day. Capacity utilization is much more efficient as
facility also processes mangoes during off-season of pineapple. NAPCL also provides for
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contract processing to other processors in the private sector.
Post Harvest infrastructure
The post harvest infrastructure at field level has been given a major impetus during
past years. APEDA has further accelerated the interaction with exporters, State Gov-
ernment and State organisations and developmental organisations to strengthen the ca-
pacity for processing, storage and transportation of fresh fruits under controlled atmo-
spheric/modified atmospheric conditions. It is expected that 1,50,000 MTs capacity will
be added in the coming years.
Infrastructure at all exit airports i.e. Delhi, Mumbai, Calcutta, Chennai, Bangalore,
Hyderabad, Thiruvananthapuram is being set up. The infrastructure is likely to be in
place in 1-2 years. Similarly, infrastructure at sea ports particularly, J.N.P.T. and Mum-
bai which are the major exit points has already been set up and is being further strength-
ened.
Research Infrastructure
Indian Institute of Horticultural Research is established to undertake basic and ap-
plied research for developing strategies to enhance productivity and utilization of tropical
horticultural crops, and act as a repository of scientific information relevant to horticul-
ture. The institute also is a center of training for up-gradation of scientific manpower in
modern technologies in horticultural production. Research in pineapple is conducted at
the state level under two pineapple research station in Kerala and one in West Bengal
• Pineapple Research Station, Vazhakulam, Muvattupuzha
• Pineapple Research Station, Vellanikkara, Thrissur
• Pineapple research station at MohitNagar. West Bengal
3.5 Process and related equipments
Production
Detailed production guidelines are available from numerous sources such as APEDA,
NHB, NRC, etc.
Pineapple is harvested in the winter season as well as during July-August. Pineapple
is a non-climacteric fruit, which implies that ripening is slow and fruit and the harvesting
has to done taking into account that after the separation from the mother plant the
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Jacob & Soman : Pineapples
ripening would decrease substantially unlike climacteric fruits. This is due to the absence
of starch and there exists no possibility in the improvement of quality after harvest.
Post harvest
Grading Standards
After harvesting, the fruits are graded according to size, shape, maturity, and freedom
from diseases and blemishes. The cut surface is treated with a suitable fungicide to
control fungal decay.
Packaging
For export purpose the pineapples are packed into fibreboard or wood containers. The
fruits are placed vertically or horizontally in containers. The interspace between the fruits
should be filled with straw and firm lining all around the container. For long-distance
transportation, fruits are held at 7
o
C for 10-20 days.
Storage
Under cooling after harvest, especially fruits with lower sugar content results in chill-
ing injury. The symptoms of chilling injuries as a result would show up after a long
time after harvest. Prematurely harvested fruits therefore, should not be cooled below
a temperature of12
o
C. Such injury can be avoided by deactivating the fruit enzymes re-
sponsible for browning reaction immediately after the harvest by the way of 24 hour warm
storage at a temperature of 37
o
C47 (Protrade, 1994). When fruits are transported for long
distances or to be stored for several days, refrigerated transport is required to slow down
ripening process. In tropical areas, partially ripe, healthy and unbruised pineapple could
be stored for almost 20 days when refrigerated at 10-13
o
C with Relative Humidity 85-
90%. Fruits harvested in early stage of ripening and to be transported may not stored
below 12
o
C and in the case of ripe fruit temperature can be lowered to 7oC for several
days. The temperature in the cold storage facility should not be allowed to vary by more
than 1
o
C. Controlled atmosphere storage (3-5% O2 and 5-8% CO2) delays senescence
and reduces respiration.
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Transport, Cool Chain process and equipments
Complete transport guide for pineapple could be referred
www.tis-gdv.de/tis_e/ware/obst/ananas/ananas.htm#transport
Cool chain is essential during the transport of export quality commodity all the way
from the farm to the customer. This helps in maintaining the temperature inside the box
at the same low level as in the cold storage.
The various stages of the cool chain are:
• Cold storage the farm.
• Refrigerated truck from farm to the airport
• Cold storage the airport.
• Building up of the pallet in a cold storage at the airport.
• Loading the aircrafts directly from the cold storage in a short time.
• Cargo aircraft maintains cold storage temperature in hold.
• Off loading direct into a cold storage in the receiving country.
• Refrigerated truck to the customers.
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Quality Assurance - EurepGap certification
The European Retail Produce Working Group comprising major retail chains and agri-
cultural producers has established a set of standards for good agricultural practice that
applies to horticultural produce called EurepGAP European Retail Good Agricultural
Practices. These standards take the form of a set of requirements for proper management
of all pre and post harvest activities to ensure food safety without degrading the envi-
ronment. In order to ensure proper implementation of these standards and demonstrate
compliance, the organization has established a third party product certification mecha-
nism based on ISO 65 accreditation system. EurepGAP certification has become manda-
tory and therefore is a key quality assurance tool required by grape farmers. EurepGAP
implementation is challenge among the farmers, which stipulates a highly controlled and
documented farm management operation. The EurepGAP recognized certification bodies
in India are listed on EurepGAP website - www.eurep.org
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Jacob & Soman : Pineapples
Legislation
This has specific importance to the EU markets. The significant among these are (CBI
Report, 2005)
• EU General food law
• EU Marketing standards EC 2200/96 for fruits and vegetables
• Certificate of Conformity
• Maximum Residue levels
• Phytosanitary regulations and Plant protection (EC 2002/89)
Price realisation
Supply chain structure of the fresh produce varies substantially in the case of domes-
tic and exports trade. Disinter mediation is the key in increasing profit margins in these
chain structures. Therefore it is presumed that the difference in the cost of cultivation
and the final price (wholesale domestic and export price) is ideally the maximum potential
margin. As in the normal case various links (producers, processors, trader and exporters)
in the chain share these profit margins and there has been a dearth of data on details of
investment and other costs at each of these levels. Therefore we have adopted a supply
chain approach to estimate the unit cost (cost/kg) at each levels of chain and thereby the
margins derived. Different scenarios can be generated from the same based on the levels
of action planned such as the margin that could be tapped if operating from production
to primary processing and to export or to only operate in procurement and processing.
For the export trade the basic assumption is that there is acceptability of product in
the European market conforming to desired quality parameters.
Price realisation is provided in the profitability matrix below.
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Jacob & Soman : Pineapples
Pineapples start bearing in 8-12 months. Farmer sources confirm that the average is
10 months and it can be harvested for 3 years after planting, after which replanting has
to be done. Cost of cultivation is 1.64 Lakhs/ha and the maintenance cost/yr is 50000
Processed Pineapple (Juice concentrate and Juice)
The project cost for processed pineapple unit is given below
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Jacob & Soman : Pineapples
3.6 Information
www.apeda.com
www.intracen.com
www.nhb.com
www.faostat.org
www.nhm.nic.in
www.ficciagroindia.com
www.ers.usda.gov
Organisation
APEDA National Horticultural Board
38
Jacob & Soman : Pineapples
3.7 Organisation
Pineapple supply chain has been confined to domestic markets and unlike grapes there
is no established export supply chain for fresh pineapple, which is being marketed in
the mainstream retail markets in Europe. Main export markets as indicated earlier is
Middle East and very minimal quantities has been exported to Spain. Among the main
growing areas in India, the pineapple supply chain in Kerala is organised to a larger
extent compared to other areas. Therefore, this used as a reference structure of a typical
pineapple supply chain. The main parties in the supply chain are described below:
3.7.1 Significant parties within the supply chain
• Farmers
In an expert opinion, the categorisation of the farmers here is not applicable in
the case of pineapple farming in Kerala as 80% of the cropped area is leased land.
Therefore irrespective of own holding size of the farmers are engaged in the leased
farming of acreage varying from 100-1000 acres.
• Pineapple Growers association
Pineapple growers association is an entity formed to organize the pineapple produc-
tion and trade. Negotiations with traders and support in arranging the finance and
inputs to farmers are primary tasks with these groups.
Domestic market supply to main markets such as Mumbai take place through two
channels.
• Aggregators/Traders
Aggregators are usually large or medium farmers who collect the produce from
farmer for a fixed price based on domestic wholesale market prices and then sent
to the intermediary in wholesale market who sells it to the wholesaler. This trade is
of high risk as there have been huge default cases by the commission agents who
procure on credit from the aggregators. This is the usual trade structure during
stable market situation.
• Commission agents
Commission agents procure the produce for a fixed percentage of the prospective
sale price. This transaction is particularly high in occurrence largely in the cases of
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Jacob & Soman : Pineapples
an excess supply or glut.
• NAPCL (Exporter/Processor)
NAPCL (described in 3.4) procures pineapple from the farmers in the region for fixed
price based on a contract. The company faces problems of non-committal farmers
who reneges contracts in the absence of a legalized contract farming policy of to
the contract resulting in irregular supply. Moreover, the pineapple variety grown
in the region is of table variety "Mauritius" and is costlier than the Kew variety in
the Northeastern states. Procurement price of NAPCL varies between 3-5 Rs/Kg.
NAPCL had also exported 3 containers of pineapple to the Middle East in Dec 2005
in project collaboration with APEDA and Cirad, France.
3.7.2 Significant parties outside the supply chain
As mentioned above, there has been no information/data on an organised export market
for fresh pineapple. Much of the other exports are inferred to be targeting ethnic markets
in the respective export destination such as Middle East. There exists no significant
support from any of the State Marketing/Agricultural department in promoting the export
40
Jacob & Soman : Pineapples
trade for pineapples in India. APEDA is the singularly responsible body for exports of
fresh produce in India APEDA has established Agri Export Zones dedicated for promoting
pineapple exports in the coming years. The list of pineapple exporters registered with
APEDA is appended.
3.8 Challenges in Pineapple Chain
• Suitable variety Development for Export:
There has been no major export initiative in Pineapple from India except few players
whose list is appended herewith. Export orientation in producing the right varieties,
which is in demand in targeted markets, is a main challenge. The current market
demand in EU is completely shifted to MD2 variety, which has completely won over
its main competitor "Smooth Cayenne". The current Indian production is centred
around Giant Kew and Mauritius variety, which are not the variety that is in demand
in EU markets. According to the industry sources, it is imperative that the Indian
pineapple production has to be reoriented to the export market demand. Therefore,
considering the MD2 variety success, the pineapple production in India needs such
product development methods and active promotion for brand development in the
long run. However, the exporters are also of the view that introduction of MD2
variety in production would certainly improve the opportunities in the immediate
accessing of the EU markets which needs to supplement by efficient supply chain
logistics and quality assurance.
• EurepGAP certification
EUREPGAP certification has become mandatory since June 2005. Adherence to the
same is critical to the access of EU market that is the main target market for India.
There has to be serious efforts in conscientisation and training in documentation
and certification process of EurepGAP. Therefore, enabling and capacity building
of the various stakeholders especially farmers with smallholdings to follow a highly
controlled document management operation. The list of pesticides and fungicides
and their allowed limits are to be constantly updated. High costs of certification fees
are another issue, as EurepGAP certification per farmer would cost 35000 INR per
farmer. Subsidies to farmers are to be provided on this front.
• Lack of Adequate farmer finance
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Jacob & Soman : Pineapples
The non-availability of adequate finance at reasonable cost was another serious
problem faced by the pineapple cultivators. Pineapple cultivation is quite capital
intensive especially if the land needed was taken on lease. Poor cultivators had
problems to get formal bank loans since they could not provide collaterals. Cost of
cultivation is provided in the appendix.
• Targeting new markets
The current export markets for fresh pineapple from India is mainly Middle East
and Spain is the only country in Europe to which India had been exporting minor
quantities. Market development activities have to be undertaken in order to capture
the European markets. Quality requirements and the longer throughput make this
a challenging task. Sanitary and phytosanitary measures have to be complied for
European Union markets. Quality certifications such as EurepGAP, Organic and
Fair trade would be of value addition to gain entry into these markets. Supply
chain management is another crucial factor to maintain physical and organoleptic
properties of the pineapple.
• Logistics and post harvest treatment
Much similar to the most of the fresh produce chain, maintaining shelf life and
quality of the fruit is a major challenge in pineapple supply chain. Internal browning
of the pineapple is the most problematic occurrence, which happens due to under
cooling. Temperatures below 7
o
C is also detrimental to the quality of the fruit as
this results in chilling injuries, which is not externally visible but causes damages
inside and develop even long time after harvest. Appropriate post harvest treatment
and maintenance of cool chain is essential.
• Policy framework for contract farming
Contract farming as the mode of organizational linkage would facilitate more pri-
vate sector participation in the fresh produce segment as had been testified in the
case of grapes. The main production areas in India such as Northeastern states,
West Bengal and Kerala is highly suitable for quality pineapple production. Due
to the absence of a legal system to ensure the proper functioning of the contract
farming, the parties viz, famers and the buyers are skeptical about contract farming
arrangement. This factor negatively affects the export development.
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Jacob & Soman : Pineapples
• Infrastructure provision
The provision of infrastructure in areas such as research in production practices,
facilities for post harvest and processing is crucial to accelerate the growth of hor-
ticulture. As testified by various stakeholders another major challenge is improving
transport and logistics including rail, road, sea and airfreight to make it cost effec-
tive for exports. This is particularly true in case of all the northeastern states which
are a landlocked area and improving road network would generate substantial rev-
enue from horticulture development.
• High Cost of processing and outdated processing technology
India is a high cost producer of relatively poor quality concentrate, which fetches the
lowest prices, which is crucial challenge in competing in the international pineapple
trade resulting in low realisation. The raw material and processing costs are high
comparing the international norms. India continues to use canning technology that
involves addition of preservatives. In contrast, Thailand, Malaysia and Europe that
dominate world trade in pineapple use aseptic packaging and frozen technologies
where the nutritional and other quality parameters are much superior.
Comparative Price Realization of pineapple juice concentrate in the world market from
various export sources
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Jacob & Soman : Pineapples
India Rs. 50/kg
Thailand Rs. 55/kg
Philippines Rs. 58/kg
Malaysia Rs. 60/kg
Europe Rs. 65/kg
3.9 Intervention plan for pineapples by National Horticultural Mis-
sion
Among the states covered by NHM excluding the northeastern states, Pineapple crop has
been selected for intervention in the states of West Bengal, Kerala and Karnataka and
Bihar. The details on the area expansion for the year 2006 are as follows:
The proposed area of expansion is complemented by other assistance for the horti-
culture sector in the areas such as post harvest infrastructure and setting up of market
yards. The details of the NHM plan is available on www.nhm.nic.in
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Jacob & Soman : Pineapples
4 Case Study
Introduction
The case study presented here is an extract of the relevant portions of article "Innova-
tion through international supply chain development" by the following authors:
Dr. Jacques H.Trienekens
Wageningen University
Management Studies Group
Hollandseweg 1
6706 KN Wageningen
The Netherlands
Sabine Willems, MSc
Rural Development Sociology Group
Wageningen University
Hollandseweg 1
6706 KN Wageningen
The Netherlands
James M.Hagen, PhD
Department of Applied Economics and Management
Cornell University
347 Warren Hall
Ithaca, NY 14853-7801
USA
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Jacob & Soman : Pineapples
GHANA - PINEAPPLE SUPPLY CHAIN
Pineapple exports from Ghana increased from 15.319 tons in 1994 to 46.391 tons
in 2002 with a temporal decrease in 1998-1999, due to drought. Table 1 shows export
figures for 2001 and 2002.
Export of fresh pineapples from Ghana from 2000-2004
The value of Ghanaian pineapple export was US$13,316,459 in 2001 and US$ 15,519,989
in 2002. Almost 50% of the total export volume was exported by four large companies:
Jei River Farm, Farmapine, Koranco Farms, Prudent Farms. To compare, the total ex-
port value of all agricultural products from Ghana in 2002 was 85,730,637 US$, which
shows the importance of pineapple for Ghana (GEPC, 2003). A further (major) increase is
expected for 2003.
Growth driven by private sector entrepreneurs
The sector’s growth has been driven principally by innovative entrepreneurs in the
private sector. The industry is getting more mature with the emergence of a larger number
of regular exporters. In 2000, the top five exporters accounted for 72 percent of sea-freight
exports; this figure has come down to 49 percent in 2004. The five top exporters are Jei
River, Farmapine, Milani, Prudent and George fields. Substantial investments have also
been made by smaller players, with the prospect of rapidly increasing their production.
The Ghanaian pineapple companies operate under different business models, ranging
from medium-sized local companies to cooperatives to joint ventures and international
agribusiness corporations. They also operate at different stages of the value chain; some
are producers, others are processors and exporters and players who also integrate all
these activities into their operations.
The farming system in Ghana can be classified into three groups
• Private owned export farms
These farms are integrated production and export companies. Some of these com-
panies, especially the larger ones (> 500 ha), focus on pineapple, others produce a
46
Jacob & Soman : Pineapples
mixed product package with products such as mango, papaya, pineapple and veg-
etables. In general, the larger plantations have a vertical integrated business from
farm to port. They have direct contact with their customers in Europe, have their
own trucks and own shaded pack houses.
• Organized smallholders
Farmapine Ghana Limited (FGL) is a company set up in 1999 under an Agricul-
tural Diversification Program jointly sponsored by the government of Ghana and the
International Development Association (IDA) for the promotion of the export of agri-
cultural products. The company was formed purposely to cater for the technical,
marketing and financial needs of the members of a conglomerate of five pineapple
growing Co-operatives but has extended its technical assistance to selected non co-
operative farmers who are considered industrious. The World Bank had supported
the project in 1999 by a loan to the 5 cooperatives to buy shares. The co-operatives
hold 80% of the shares of the company and the remaining 20% are held by two
former exporting companies whose business were taken over by FGL.
• Non-organized smallholders
These farmers produce normally for the local market, and for larger farmers. Ghana
has hundreds of small pineapple farmers cultivating between 1 to 10 acres of land.
They have limited access to mechanical equipment and rely on market availability.
They buy their own inputs and sell to any willing buyer. However, if they supply on
a more regular basis to a larger farmer, who are called out-growers. Out-growers are
often supplied with seeds and in return sell their crop to the exporter. Sometimes
they also receive other inputs or cash in advance but in general there is no written
contract.
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Key success factors in Ghana’s pineapple industry
Market positioning
Europe, two categories of pineapple dominated the market: air-freighted, expensive,
"extra sweet" pineapples and sea-freighted, cheap, less savoury pineapples. Ghana’s ini-
tial market strategy in Europe was to sell to the northern low-end discount market for
pineapple and at the same time offer a competitive price. The breakdown of its cost struc-
ture (see below) demonstrates that Ghana was able to compete by developing efficiencies
in virtually all categories except transportation
˚
Uin this case sea-freight cost. Côte d’Ivoire
and Costa Rica, because of factors related to distance and "bulk of shipment", were able
to outcompete Ghana only in this category. However, this advantage was not enough to
secure a lower price. Côte d’Ivoire, because of significantly lower margins, marketing, and
packaging costs than Costa Rica, was able to offer a price of 0.75 Euros per kilogram.
Ghana, for its part, was able to beat that price by seeking lower margins, reducing mar-
keting cost, developing more efficient inland logistics, and lowering the price paid at the
farm gate (Danielou and Ravry, 2005).
Airfreight cost advantage
This cost advantage was dependent on three factors: availability of northbound freight
capacity, variety of destinations, and efficient ground-handling services and the first two
being the outcome of liberalized policy environment adopted by. Ghana. These played a
crucial role in expansion of the pineapple industry (ibid).
Policy, Organisational Development and Infrastructure
48
Jacob & Soman : Pineapples
The development of Ghana’s export industry had been driven by private sectors groups.
Cohesive producer/exporter groups, active professional organizations such as exporters
and horticulture association with liberilsed policy environment supported by Public and
private development agencies such as USAID, GTZ and CIRAD had paved the way for
increase in pineapple trade (ibid).
Fig 17 below shows the general structure of the pineapple chain in Ghana.
Innovation in the Ghanaian pineapple supply chain
Fig 18 below depicts innovation in the Ghanaian pineapple chain.
49
Jacob & Soman : Pineapples
MD2 (a new pineapple variety popular in Western markets) and Eurep-Gap seem to be
the driving forces for change. Developments are dominated by a limited number of large
producers that are responsible for most of the, still limited, investments in this sector.
Large farmers will in the near future all be certified. An interesting side effect of Eurep-
Gap implementation is reported by some large-scale producers. Because of Eurep-Gap,
managers have a better overview of the cultivation activities in the field, since these are
registered according to Eurep-Gap rules. In this regard the new quality systems may
support streamlining of the chain. Some of these developments will spread out to out
growers; indeed while out growers deliver an important part of Ghanaian pineapple pro-
duction through large producers to the export market, they also will have to comply with
chain demands. For the time being there is a large number of small producers though,
making part of a very non-transparent supply chain. Furthermore, infrastructures are
weakly developed: the transportation infrastructure is weak, a cold chain is non-existent
and transportation overseas is irregular and expensive.
50
Jacob & Soman : Pineapples
Governance structure and spill-over effects in the Ghanaian pineapple chain
In the emerging Ghanaian pineapple chain market demands and opportunities lead to
a fragmented Ghanaian pineapple production system. Although many exporters search
for long-term relationships with retailers to ensure demand, this is still constrained by
weak market opportunities, a very weak infrastructure and opportunistic behavior of
chain participants. Because of the weak position of Ghanaian pineapple on the world
market, development of niche market production such as fair trade or organic produc-
tion could be an opportunity for Ghanaian producers. On the other hand, the weak
collaboration between exporters and the weak national and international infrastructure
limits further developments in this regard. Dependency relationships between large pro-
ducer/exporters and small-holders (regarding market access, input supplies and credits)
lead to chains where smallholders are forced to find market access through large produc-
ers in an imbalanced buyer-supplier relationship. The existence of a large cooperative
with many smallholder members like Farmapine is promising, however.
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Jacob & Soman : Pineapples
5 APPENDIX
LIST OF THE SUPPLIER/EXPORTERS OF ORANGES AND PINEAPPLE
1. Seven Hills Noga Santar Utpadak Sahakari Sanstha,
At. Po: Morshi, Tal: Morshi, Dist: Amravati Orange
Contact Person: Mr. Arun Kumar Pethe (9326222205)
Mr. Bhau mankar (9423427448)
2. Mr. Shashi Kumar K
M/s. Nadukkara Agro Processing Co. Ltd
Nadukkara, P.O. Avoly
Muvattupuzha 686 766 Kerala Pine Apple
Tel: 0485 2261547, 2261451, Fax: 0485 2261551
E.mail: pinefac@sanchatnet.in
3. Maharashtra state Agricultural Marketing Board,
Plot No: R7, Market yard, Gultekadi, Citrus/Orange
Pune 411 037. Phone: 020 24261190, Fax 020 24272095
Contact Person: Sunil Borade, Advisor (Export)
Email: export@msamb.com
4. Bombay Exports
33/35, Matru Vatsalya, 2nd Fofal Wadi,
Grund Floor, Bhuleshwar, Mumbai 400002, Pine Apple & citrus
Tel: 91 22 22406075, 22408642, Fax: 91 22 22404260.
E-Mail: bombayexp@vsnl.com
Contact Persons : Mr. Anand Shejawal
Mr. Kiran Deshmukh: kiran@bombayexports.net
Mrs. Swati Buchia: swati@bombayexports.net
5. Shri. Shafi Baig
M/s. Chand Fruit Co. Pvt. Ltd
P.O.Box 57, Lakshmi Market Pineapple & citrus
Miraj 461 410, Distt Sangli, Tel : 0233 2222199, Fax: 0233 2223279
E.mail: san_chandfruit@sancharnet.in
6. Vakratund Exports & Imports,
Sr. No.634/9a/3 Classic Apt, Bibwewadi,
Pune, Maharashtra, 411037
Phone: 0091 20 24231326, Fax: 0091 20 24231326 Pineapple & citrus
Contact person: Mr. Kaustubh Karanje
Email: vakratundexports@sancharnet.in
Web: http://vakratundexports.tripod.com
7. KGN Exports (India)
Bldg. 42, Block 3 4, Near Sion Station,
Sion, Mumbai 400 022 Pineapple & citrus
Contact Person Zafar Pirzada
Cell: 09820462200, Telefax 022 24034971
Email: kgnexports@gmail.com
8. Mr. Mohd. Hanif
M/s. Raien Trading Company
G 311,312, APMC Fruit Market
Sector 19A, Vashi Turbhe
New Bombay 400 705 Pineapple & citrus
Tel : 27841930, Fax: 27844341
E.mail: raientradingcorporation@rediffmail.com
9. Mr. Rajkumar Sachdev
M/s. Chella Ram Kishan Chand Brothers
F 67,APMC Fruit Market, New Bombay 400 705
Tel: 2780 1780 Pineapple & citrus
Fax: 27668494, E.mail: ckexports@vsnl.net
Mobile: 9321027958
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Jacob & Soman : Pineapples
Cost of Cultivation
53
Jacob & Soman : Pineapples
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