Iranian Kiwifruit ban from India: Impact and Opportunities

Fresh Kiwifruit

India

Iran

Published Dec 21, 2021

The National Plant Protection Organization (NPPO) in India has suspended the imports of Iran’s fresh Kiwifruits with effect onDec 7, 2021. According to the Agriculture Ministry, the ban comes after the detection of pest-infected consignments of Kiwifruit of Iranian origin, despite repeated warnings from the NPPO since October when the presence of two pests started to appear. For Iran, losing their primary and continuously growing Indian kiwi market due to the ban could be crucial for the industry. While for other kiwi-producing countries, like Chile and New Zealand, it represents a unique opportunity to capture a larger share of the Indian market. Besides the Indian kiwifruit ban, Iran could face further bans on different products in different main markets due to missing phytosanitary standards.

Reason for the Iranian Kiwi Ban

According to the Union Agriculture Ministry, since October 2021, India has intercepted two quarantine pests from numerous Iranian kiwi consignments. The pest “Aspidiotus netil” was found in 22 shipments, while the pest “Pseudococcu Calceolaria”' was found in two kiwifruit shipments. In an official statement, the Agricultural Ministry stated that after previous phytosanitary certificates issued by the National Plant Protection Organization (NPPO), Iranian authorities were officially warned about the infected consignments. Along with the pest warnings, the NPPO has also advised its Iranian counterpart about the excess of fertilizer on fruits.

Indian authorities claimed that the recommended actions for the shipments to comply with the quality norms set by India date back to early 2019 when India intercepted a quarantine pest from 13 shipments and a non-quarantine pest in two other ones. However, despite the repeated warnings from the NPPO, the pest-infested shipments of Iranian kiwi fruit have increased over the past weeks, which means that the phytosanitary certificates were ignored. As a result, the Indian government has suspended the import of fresh kiwi fruits from India from Dec 7th, 2021.

Iranian Ban will bring Opportunities in the Indian Kiwi Market

The Indian kiwi import market has grown substantially over the last six years. In 2020, India imported 50K MT of kiwis worth USD 55.3M, a 16% increase from the previous year. In 2015, kiwi imports represented around 6.5K MT worth USD 12.9M, representing a 14% yearly rate for the past five years. As a result, the demand for kiwis in India has grown substantially. According to government data, in 2020, its domestic kiwi production was around 13K MT, which is only about 11% of the total country’s consumption. Thus, the ban for Iranian kiwi will generate a shortage of kiwis in the market, which will be supplemented by the other major kiwi suppliers to India- Chile, and New Zealand.

Iranian kiwis are the second supply source for the Indian market by value, and the leading supplier by volume with 20K MT imported in 2020. Chile is the leading supplier by value with 28.5% of the Indian imports share, followed by Iran with 20.9% and New Zealand with 19.2%. Chile has arrived strong into the Indian market displacing New Zealand as the primary kiwi provider since 2016. However, Iran has maintained its place as the second-largest supplier through those years and has also seen substantial growth in exports to India. In fact, India is the primary market for Iranian kiwi exports, with 52% of its total exports.

Source: Tridge, ITC Trade Map

Sibin Baby, Tridge’s Engagement Manager in India, has recently reported that prices of imported kiwi in the Indian market are to increase in the coming weeks. “After the import of Iranian kiwi has been suspended due to the presence of quarantine pests, the prices of other imported kiwi are expected to increase in the coming week, from 14th Dec 2021 to 21st Dec 2021. Chilean Kiwi was traded at USD 0.18 per piece on the 12th Dec 2021 in the Bangalore market, while on the 14th Dec 2021 it was sold at USD 0.29 per piece. For New Zealand Kiwi that usually starts trading at USD 0.34 per piece, the price is expected to increase by USD 0.1, he informed.

Given the importance of Iranian kiwis in the Indian market due to their lower price and the volume quantities that they represent, there will be an increase in the market share for New Zealand and Chilean kiwis. However, other countries such as Greece and Brazil might be able to increase their share in the Indian market. According to Mr. Baby, Greek and Brazilian kiwis have a high potential to capture a big part of the gap left by Iranian kiwis.

More Potential Iranian bans might leave New Opportunities

Various other countries have banned imports of Iranian fruits and vegetables due to fungi or high pesticide residues. India, Russia, Uzbekistan, the United Arab Emirates, Oman, Qatar, and others no longer accepted some certificates issued by Iran's agricultural organizations and demanded their own standards be met. If Iran does not take immediate action to raise quality and phytosanitary standards, it will face the loss of all its agricultural markets. If so, different markets that fulfill with fresh Iranian produce on a regular basis will face shortages in their markets, as in the case of kiwi.

Some of the Iranian products that face this threat are apples, which are currently assessed by the NPPO for a possible ban in India as it has already happened in Russia, allowing Turkish and Moroccan apples to grow in that market. Dates, figs, potatoes, watermelons, and tomatoes are some of the other Iranian fresh products that face possible bans in their main markets.

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