Demand for mushroom to grow at 25% per annum

Mar 21 2005, 00:00 IST
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The mushroom market in India is on the verge of undergoing a sea change due to the advent of multi-cuisine eateries and a flood of multinationals setting their shops in IT and other industrial sectors.

The annual demand for mushrooms that was around 5,000 tons in 2001 in the country has doubled to 10,000 tonne in 2004 and the demand is expected to grow at a good pace of 25% every year for many years to come.

The myth that mushrooms are not vegetarian is gradually fading and the acceptance of it as part of food is increasing.

Mushrooms, which were shunned by most of the Indian vegetarians, are becoming a favourite of the new generation. Mushrooms are gaining popularity due to inclination of the spending population to increasingly move towards Chinese, Italian and other western cuisines, which use mushrooms lavishly.

US is the largest producer and the largest consumer of mushrooms. Avondale, a town in the state of Pennsylvania USA, still boasts the board outside the office of American Mushroom Institute “ The Mushroom Capital of the world”.

The total consumption of mushrooms in the US is around 8,00,000 tons out of which almost half is imported. The major exporters to US are China, Netherlands and India.

China and India have the strategic advantage of low cost labour and agro waste.

The mushroom industry in India is largely an export-oriented one as the domestic demand for mushrooms is very small. A major part of the produce is exported.

Over 35 players ventured into the business in early 90’s, when there was a huge demand for mushrooms in overseas markets. Large scale dumping by the Chinese (who are the lowest cost manufacturers of mushrooms in the world) led to a crash in global mushroom prices in the mid 90’s.

The American Mushroom Industry filed anti-dumping (AD) proceedings against the companies in China, India and Chile in 1998 and most of the Chinese companies were slapped with AD duties from 156% to 224% and Indian companies too were slapped with stiff AD duties.

Under the last determination for the year 2003-04, Agro Dutch was imposed 26% AD duty, while Himalya International escaped with (de minimis) i.e. zero AD duty for continuous two years.

Most of the Indian players found it unprofitable to export at the low prices and anti-dumping duties.

As a result, a large number of these mushroom-manufacturing units, which had sprung up on expectations

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