For those Indians in the business of honey exports, the past few years have actually been ‘extra sweet’. India’s exports of natural honey has grown in proportion to the increase in consumption across international markets, making this non-fancy food product a clear treat for exporters in India.

Anishaa Kumar | March 2017 Issue | The Dollar Business

Next time you are at a local supermarket, walk around and take a closer look at the aisle selling honey – from natural honey to the processed and value-added type, Indian markets are flooded with honey of various types and brands. And not just India. Even if you look around the aisle selling honey in an American supermarket, the choices available in terms of source and flavour and size and packaging truly boggles the mind. Honey is as ubiquitous in kitchens in the boroughs of Brooklyn as they are in the larder of a quaint Parisian patisserie. Considered nature’s original sweetener, honey has emerged as a popular alternative for those looking for a healthy switch from processed sugar. While ‘processed honey’ has its share of naysayers, it is the India-produced natural honey that continues to shine in the limelight and has seen a boost in both the domestic and international markets.

Sweeter Than Before

Indian honey is making a name for itself in international markets is borne by the fact that exports of natural honey from India increased from $31.64 million in FY2010 to $108.68 million in FY2016 – it’s a 243.48% jump! US has been the country that has imported a lion’s share of our honey over the last few years. Imports of natural honey by US from India, witnessed a whopping 355.99% growth during the same period – from $20.93 million in FY2010 to $95.44 million in FY2016. In FY2017 (Q1 and Q2 combined), the total honey exported from India to various countries stands at $42.68 million with US still appearing to have a majority share at $34.78 million. Apart from US, other main importers of honey from India include Saudi Arabia, UAE, Bangladesh and Morocco.

To US, with Love

That US is our largest importer should come as no surprise. According to American Honey Producers Association (AHPA), the annual honey consumption in American is around 227-272 million metric tonne (MMT), with per person consumption of about 0.5 kg per annum. US beekeepers, due to numerous natural factors, have been unable to keep up with the demand. Per the USDA, between CY2014 and CY2015, the US domestic production of honey (from producers with more than 5 colonies) dropped from 71 MMT to 62 MMT, i.e. by 12.67%. It is in this situation that the imports of natural honey from countries such as India, China and Argentina have been on the rise. And not to say, India has been the shining star in the galaxy of honey exporting countries to US. According to AHPA, US imports from India soared from 20,381 metric tonne (MT) in CY2014 to 36,123 MT in CY2015 (a 77% growth), while imports from Vietnam (which used to be a major source of natural honey for US some time back) declined from 47,107 MT in CY2014 to 37,071 MT in CY2015. Not only that, as per AHPA, the honey imported from India has seen an increase in both volume and price. The price of Indian honey increased from $1.32 per kg in CY2001 to $3.51 per kg in CY2015.

Jessica Schindler, Marketing Specialist at the Colorado-based National Honey Board, elaborating on the growing demand for quality honey in US, says “I cannot speak of the world honey industry; however, in America, honey consumption is high and on the rise. Consumers are finding more and more ways to use honey and they’re using honey as not only a sweetener but also for its functional benefits when cooking and baking.” Honey, she says, adds a unique flavour to a variety of recipes and more and more recipes are being created with honey as an active ingredient. Honey is also favoured as an emulsifier (acting as a binder, adding thickness for sauces, dips and sauces) as well as a humectant (to retain moisture in certain dishes and extend the shelf life of some baked goods).

India exported 38,177.08 metric tonne (MT) of natural honey to the world in FY2016, with United States, Saudi Arabia, United Arab Emirates, Morocco and Bangladesh being the biggest export destinations.

The scope and demand for honey have inspired a variety of players to enter the market – from big brands like Dabur, Himalaya and Patanjali to various small and upcoming honey-producing farms. While most of the big brands procure natural honey from beekeeping farms around the country which is further rebranded and sold across the world, many of the local honey producers are also taking a step in the direction of exports.

But not all producers look at the international market as more profitable! Chaya Nanjappa of Nectar Fresh Foods says that while exporting excess production is good for any honey producer, it’s the Indian market that offers better profits and has potential to grow further. While her company Nectar Fresh is exporting independently for the first time, they have previously exported through agents and via big brands which distributed the honey under their name and packaging. She attributes the success and confidence of these big brands [on her products] to be the reason behind Nectar Fresh’s decision to foray into overseas markets independently. The company is looking to export to neighbouring countries like Bangladesh and Sri Lanka because of the price value, which she says is more than most western destinations. Even European nations, which are major producers of natural honey, are important markets for India. The growing imports has been attributed to an increase in consumption in these markets.

HONEY LAUNDERING

But that is not to say that producers and exporters of natural honey have always had it easy. Over the last few years, the honey exported from India has come under intense scrutiny as rumours about contamination made the rounds, especially due to concerns that China-made honey had made its way into Indian honey consignments. There have also been accusations of producers releasing adulterated honey into the Indian market while the export quality is usually good due to strict tests and regulations. The adulteration, as per some manufacturers, was effecting their business as the sellers of adulterated honey were able to sell at at relatively lower price.
Nanjappa says that while it was a problem a couple of years ago, many brands survived and are known in the market for their ethics and standards. The government also has played a positive role in curbing the adulteration menace. Since the first reports of adulteration, the Indian government has stepped up and introduced various guidelines and stringent certifications for exporting honey. All exporters of honey are required to go through the Export Inspection Council of India (EIC) for the export of honey. Even EU, which had banned the product from India, laid down certain regulations on acceptable standards of chemical presence in imported honey.

So, now one requires an approval certificate to export honey from India. To get this certificate, exporters are required to get tests conducted via one of the 24 approved laboratories which include both EIC run facilities and private domestic and international agencies such as Intertek (from Germany). Then, as per protocol, they are required to get a final approval from the EIC. The council is permitted to frequently conduct checks at these facilities to ascertain that the laboratories are adhering to their guidelines. “Despite these measures, there have been instances where the India-made honey has been stopped from entering EU,” explains Gaurav Bhojwani, an executive at Apex International, a honey exporter from Jaipur. Nevertheless, exporters have been able to overcome these hurdles and make a mark for themselves in the overseas markets.

Matching steps

The growth in exports have been ably supported by the growth in productivity by bee farmers. In Union Budget 2016, Finance Minister Arun Jaitley had highlighted that the total domestic yield of honey has increased from an “average of 18-20 per kg per box of bees in FY2014 to an average of 25 kg in FY2016.” The total honey production also saw a rise from 76,150 MT in FY2015 to 86,500 MT in FY2016, with exports on the rise. Dr. B.L Saraswat, Executive Director, National Bee Board says, “This year, we expect annual production to be at least 90,000 MT. Technology is the main tool for beekeepers. Earlier, people were not aware about the technology of beekeeping. National Bee Board has promoted scientific beekeeping. That is very useful for both the beekeeper and the farmer. For farmers, it is in terms of pollination support. For beekeepers, we have helped them with technology that has improved quality honey production.” Certainly, growth in the domestic production has been phenomenal and by the end of FY2018, the Board is expecting the production to grow to at least 95,000 MT. “When we started the National Bee Board, around 8 to 9 years ago, the annual production was hardly 50,000 MT,” adds Saraswat.

Tough COMPETITION

Honey adulteration has been a major challenge for natural honey producers as sellers of such products offer their outputs at much lower prices.

But it is not India alone that has been eyeing the growing international market. There are many countries jostling for a piece of the lucrative honey market. Manpreet Singh Bhasin, Managing Director of Mumbai-based Pioneer Food and Agro Industries, says, “The market has been good. But for the last two years, we have been facing competition from countries like Argentina and Ukraine.” When enquired further, Bhasin explains that low price in the international market is one of the main challenges. He adds, “Currency devaluation in countries like Argentina and Ukraine worked against us.” While Ministry of Commerce, GoI, data does not display any impact on India’s total honey export figures, exporters like Bhasin have been hit by the change in the global business climate. “We used to export around 1,300-1,400 MT annually, but over the last two years, exports have come down,” adds Bhasin. In CY2015, China was the world leader in honey exports (valued at $288.67 million) followed by New Zealand, Argentina, Mexico, Germany and India. Vietnam , Spain and Ukraine follow close on the heels of India.

Inadequate SUPPORT?

So, what can the government do to keep Indian honey exporters ahead in the race? Currently, honey exporters get a 5% incentive under Merchandise Exports from India Scheme (MEIS), which according to many exporters is just not enough. As per Bhasin, while there is no export duty and the government provides duty drawbacks, a lot more needs to be done when it comes to assisting honey exporters. “The incentive that we get from the government is not enough when you compare it to the countries that we are competing with,” he adds. And owing to a fall in profits, due to competition from other countries, some bee farmers are either shying away from the trade or are just focussing on the domestic market. What India also needs do to outpace the competition, according to Nanjappa, is access to good quality labs for certain essential tests. The absence of which, she says, adds to the cost of production and the time to market.

A Sweeter Future

Honey, once considered a luxury item, has now found a market worldwide. Schindler says, “Consumers look at natural honey as an all-natural sweetener and are willing to pay a premium for good quality. They are beginning to understand the hard work that goes into getting honey from the farm to the fork. Consumers are now also more aware of the health benefits that honey offers.” Hence, demand for the product, especially in developed markets, is bound to grow in the foreseeable future. And that makes one thing clear, at least from the Indian exporters perspective, that the demand for honey is far from reaching its peak.

Of course, there are certain concerns – the global economic climate remains dull and the trend of consuming local farm made food is on the rise in our traditional export markets. “Challenges of slowdown in certain markets will hit us. Changing global consumer dynamics also might lead to increase in demand, but it’s too early to see a visible shift,” says Amit Anand, Joint Managing Director, Apis India, a large honey exporter. Exporters though are mostly optimistic about the future, despite anticipated threats of changes in import policies in US under the new administration. For, the 10-12% profits they make while exporting is a reason enough for them to continue sticking to this sweet business. What’s more? The exotic and value-added varieties of honey fetch even better margins across international markets. Well, we can already smell that sweet scent of success! Can you?!