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Food Agrprocessing www.agronfoodprocessing.comVolume 13th
Tilapia
Vol 13 Issue 03 January 2018
the next potential earning buck for fisheries
100/-
Surpassing limits Indian Seafood Export
World
On Feb10th
Is FSSAI in a mess? Bumper Production, a Black Hole for
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CONTENTS 50 10 Tilapia, the next potential earning buck for fisheries
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Bumper production, a black hole for pulses economy?
Cakeology The Story of Cake, its acceptance and the market
28 Surpassing barriers, Indian seafood export set to touch new heights FSSAI responds to the CAG Report
36 Seafood industry is rising high on the successful run of its exports
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India is second largest producer of 56 horticultural crops and fruits ASSOCHAM: Govt. must give top priority to agriculture in budget LT Foods to expand geographical foot prints and invest $20 mn for 57 branding, expansion
44 Is the Food Safety and Standard Authority (FSSAI) in a mess?
Need to push agro processing to hike production: FM Dubai will soon enjoy UP veggies
EDITORIAL
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The views expressed in this issue are those of the contributors and are not necessarily those of the magazine. Though every care has been taken to ensure the accuracy and authenticity of the infomation,"Oil & Food Journal" is however not responsible for damages caused by misinterpretation of information expressed and implied within the pages of this issue. All disputes are to be referred to Mumbai Jurisdiction.
SSAI is part of India’s ministry of health and family welfare and is responsible for laying down scientific standards for food items and regulating their manufacturing, storage, distribution, sale, and import. However, the regulatory body has been in the news due to a volatile report brought out by Comptroller and Auditor General of India(CAG), which indicated that the Food Safety and Standards Authority of India (FSSAI) was guilty of various lapses in enforcing food safety across the country. It claimed that food articles that were declared unsafe by it still remained for sale in markets due to lack of adequate monitoring. Moreover, most of the laboratories across states did not have proper accreditation. So, the quality of their testing was put into question. There was a test check conducted on three Central and five State licensing authorities report and 3119 out of 5915 cases licenses were issued to the Food Business Operators due to incomplete documentation. CAG also reported that there was immense shortage of qualified manpower and functional food testing equipment in State laboratories and referral laboratories resulted in deficient testing of samples. Apart from the low grade laboratories fact, when the CAG did a test audit of 50 proprietary food products approved for sale to consumers between 2012 and 2014, it found that even the diluted regulations were not followed. In many cases, the authority did not send product for scientific assessment even after giving it the temporary no-objection certificate. And to say all these glitches were found even when the Central government is making an investment of Rs 480 crore to strengthen state food laboratories and referral laboratories. It is also investing in training of staff and handholding National Accreditation Board for Testing and Calibration Laboratories accreditation. Anyway this arbitrary clearance system did not stop even after the Bombay High Court banned it, which was later on validated by Supreme Court in 2015. In fact the food regulator continued to issue ‘blanket instructions’ to its licensing authorities to renew or continue all existing licences issued on the basis of the no-objection certificates it had already issued. FSSAI agrees that there are quite a number of lapses from their side and this is because the authority is still in nascent stage and evolving with time and management. The regulator has defended itself by saying that active steps have been taken to counter these issues. It has also requested the government to recruit 600 people in the central authority to help meet manpower shortage and discharge its function of framing standards as well as ensuring compliances. Once upon a time PepsiCo was the leader in the snack segment in India, it’s Lays chips and other products where on the topline loved by the people. However rising incidence of cardiovascular diseases, obesity and high blood sugar levels pushed consumers to look for snacks that do not have an adverse effect on their health. Long working hours and busy lifestyles compelled many consumers to go for snacks like Haldiram’s Roasted Almonds and Trail Mixes that are perceived as healthy and tasty and can be consumed on the go. Today Haldiram Foods International tops the race by surpassing PepsiCo in India. It is the leading manufacturer of savoury salty snacks with a 12 per cent share of retail value sales in 2017. The company offered the largest portfolio of traditional Indian snacks across all retail channels. Thus, strong distribution and a wide choice of popular products helped to maintain its leadership at the end of the review period. India’s vegetable oil import dipped by 10 per cent this year due to good crop harvest. Well apart from good harvest the other reason of this dip was increased import tax. India, the world's biggest edible oil buyer doubled the import tax on crude palm oil to 30 per cent, while the duty on refined palm oil was raised to 40 per cent from 25 per cent. This hike affected the edible oil import to a great extent. Of course the Govt. has taken this step to encourage self-production, but I wonder how successful this would be and what backup plans does the Govt. have. For your information, let me tell you that India primarily imports palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil. It also buys small volumes of sunflower oil from Ukraine and canola oil from Canada. Danone is exiting its dairy portfolio in India, seven years after it entered the category dominated by Amul and Mother Dairy, besides Nestle and Britannia. It honestly maintained that its dairy business revenues were going down and so the sector was closed and Danone now plans to concentrate on its already established food products in India. Well Baba Ramdev-led Patanjali Ayurved is in talks with several foreign venture funds for investment in its ongoing projects like food processing units and manufacturing units. I wonder how does it claim to be desi when it is looking for ventures in Videsh (foreign). Food processing industry in India is touching new heights. Hopefully 2018 brings more ventures, development, growth, market, business to this segment.
Agro & Food Processing January 2018
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FSNMI
Federation of Sweets & Namkeen Manufacturers of India
World
Feb 10, 2018, Hotel Eros, Nehru Place, New Delhi
W
Meetings Discussions Knowledge Entertainment Gala Night Exhibition
ith an aim of getting all the namkeen and mithai manufacturers on a single platform, Federation of Sweets and Namkeen Manufacturers of India (FSNMI) along with AIM Events is coming with World Mithai & Namkeen Convention 2018 at Hotel Eros, Nehru Palace, New Delhi on February 10th. This sector has witnessed tremendous growth in recent years as several players have switched from traditional methods to modern means of manufacture and trade. The consumption ratio is vast in India as everyone, right from a 5-year-old child to senior citizens is the consumer of namkeen & sweets. This sector cannot face a dip in the consumption pattern as Indians always crave for namkeen and delicious sweets. Earlier in September-October, the industry was in doldrums as the central government kept this sector in the GST slab of 12 per cent but later the Council cut this slab to 5 per cent on khakra and loose farsan. On this ground, the association stressed to keep packaged namkeen and sweets on 5 per cent. Delegation of FSNMI is in talk with Finance Minister Arun Jaitely on the issue. Talking to newsmen, Virendra Jain, President FSNMI said that every day we face new challenges in doing business and FSNMI has been able to deal with them for benefit of the trade and industry. New trends of packaging and processing with latest automation techniques have provided us a new boost to the sectors. Today a
manufacturer in Rajasthan can dream of supplying in MP or West Bengal. Similarly, due to increase in demand of quality & hygienic products from consumer has opened new avenues for raw material, ingredients suppliers and food safety system providers”, said Jain. He further said that management of supply chain, new trends in packaging, food safety, automation, taxation and GST, work efficiency, weights & measures, etc. are common talks among the business community of Mithai & Namkeen. There is need of a platform for our hundreds of industry members where they can come and share their thoughts and understand latest trends of the global market and this convention is giving an opportunity to all of us, said he. Namkeen as well as sweets are gaining eminence in modern times and their demand is also increasing considerably that cater to the taste of people. Among the namkeens the prominent items dal moth, bhujia etc. These are becoming most versatile as for their relish and palatability is concern. Nowdays these items are well known not in India but worldwide. As the ethnic food category is growing, cash rich companies make a beeline for share of salty snacks market. Around 1500 snack items are sold in India spanning various tastes, shapes and fillings. Some 300 types of savouries are sold here, and overall snack product market is estimated more than 1 lakh crores. This convention will also provide unprece-
Agro & Food Processing January 2018
1ST World
Mithai & Namkeen
Convention
on Feb.10 dented opportunities to the allied sectors of the industry to meet manufacturers face to face and rub their shoulders with industry stalwarts. Organiser and treasurer of FSNMI Firoz Naqvi said “World Mithai & Namkeen Convention 2018 will provide a platform to all the manufacturers from different parts of India to come together for benefits of their trade and industry. This will also provide a chance to entire allied industry to meet manufacturers and demonstrate their products and services. The seminar will also provide the industry to share their thoughts with the concerned government departments and policy makers.” Briefing media persons, Naqvi told that the companies involved in sweets & namkeen business and allied sectors are joining this endeavor, first-of-its-kind in India. They must support the seminar-cum-expo through participation, sponsorship and advertisement, he said.” This event shall prove significant for the industry as there will be discussions and presentations on several matters related to this segment. Topics like technological advancements in mithai & namkeen industry, choosing right ingredients for the products, global packaging trends, food safety and challenges in mithai & namkeen segment and other issues will be discussed at this meeting.
Emerging Culture
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Tilapia, earning
T
ilapia, the fish commonly known as aquatic chicken for its resemblance to chicken in taste, is the new buzzword in Indian seafood sector, which is looking to diversify from its over dependence on farmed shrimp. Genetically Improved Farmed Tilapia (GIFT) is one of the important candidate species for aquaculture in India. It has become a fish of choice because it is fast growing and an affordable source of animal protein. Tilapia is the third most important fish after carps and salmon in the world. India’s contribution for export to countries of Tilapia is insignificant and holds vast potential for export. This fish is most
suitable for culture in tropical zones as the temperatures are highly suitable for fast growth. It can tolerate temperatures of 82-860 F. This fish is a prolific breeder and sustained efforts by several research institutions led to the production of mono sex all male culture. Presently, Genetically Modified Farmed Tilapia (GIFT) is being successfully produced and farmed in our country. This species takes only 6 months to reach to 600-900 gms size from 50-80 gm size stocking. India now a marginal player in tilapia export is looking to meet the huge demand for the fish in domestic market and to capture a significant share of about $6 billion global export of the fish currently dominated by China, by promoting large scale
Agro & Food Processing January 2018
farming of the fish even in landlocked states. Tilapia Introduction to India The first tilapia introduced to India was the Mozambique tilapia in 1952 (Sugunan 1995). Currently, the Government of India has authorized importations of only O. niloticus and red hybrids. The major intent of these introductions was to develop a tilapia farming industry, although some were stocked for mosquito control, aquatic vegetation control and as a reservoir fishery. However, none of these early introductions led to significant production or commercial success. The Indian government recognizes tilapia farming to be a key sector in aquaculture, especially considering the success of other tilapia
Emerging Culture
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the next potential buck for fisheries
tries, and about 98 per cent of tilapia produced in these countries is grown outside their original habitats.
industries in tropical and subtropical regions around the world. Farmers looking at neighbouring nations were convinced that improved brood stock was the missing link and began to surreptitiously import new animals. Several of India’s neighbours are major producers of tilapia, so importation was relatively simple. China is the world’s biggest producer, with annual production of 1.8 million tonnes, and Bangladesh produced 300,000 tonnes of tilapia in 2016. Nepal and Myanmar are also significant producers. In 2009, the government realized that numerous undocumented shipments of tilapia were entering the country and that many farmers were beginning to work with the fish without any quarantine, biosecurity, organization or planning. The
Marine Product Export Development Authority (MPEDA) organized a conference to address this issue and invited an international panel of experts to discuss the situation and provide recommen dations about how tilapia aquaculture should be organized and regulated. Subsequently the government developed guidelines for importation, biosecurity, quarantine and licensing. This has allowed the tilapia industry to rapidly expand in an organized fashion. Production has now grown to 18,000 tonnes per year. Tilapia farming Tilapia farming which originated in the Middle East and Africa has now become the most profitable business in several countries. Tilapia has become the second most popular seafood after crab, due to which its farming is flourishing. It has entered the list of bestselling species like shrimp and salmon. The largest producer of tilapia is China. Indonesia, Thailand, Philippines and Taiwan also supply maximum tilapia in the global market. Tilapia is being farmed in about 85 coun-
Agro & Food Processing January 2018
The most common breed of tilapia farmed around the world is Nile Tilapia/Nile Perch, which accounts for roughly 75 per cent of farmed tilapia. Tilapia is tolerant of a variety of aquaculture environments; it can be farmed in brackish or salt water and also in pond or cage systems. Tilapia is seasonal. It can survive and breed only in warm water. The ideal water temperature for a tilapia farm is 8286 degree. Fish will start dying below 55 degrees, and you will see a drop in the growth rate. Hence, India is suitable for tilapia farming. Tilapia starts breeding three months before being big enough to eat. It has an extremely high breeding rate. An adult tilapia female fish can produce up to 100 fries per week. Many breeders manage the breeding by making use of hormones to breed male tilapia. Most farmers choose to keep only male tilapia in the grow-out stage. Male tilapia has proved more profitable as they grow bigger and are more time and energy-efficient. Female tilapia tends to waste energy and time due to breeding. Tilapia is the second most farmed fish in the world and, but the commercial farm-
Emerging Culture
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been imported in conjunction with World Fish. GIFT fish are currently in a nucleus breeding program consisting of eight private and state department hatcheries. These hatcheries will be the authorized distributors of sex reversed GIFT tilapia. The currently operating hatcheries use α-methyl-testosterone to sex reverse fry for all-male production. This procedure is widely accepted around the world for tilapia destined for human consumption.
ing of tilapia is limited in India. Even though this fish was introduced in India long back (in 1952) and there was a ban on tilapia in 1959 by the fisheries research committee of India, recently tilapia farming was approved with certain conditions in some States. Genetically improved tilapia (GIFT) farming was approved with some guidelines.
Culture Systems Tilapia farming is clustered in Andhra Pradesh and Kerala states. The most common production systems are ponds, with lesser amounts grown in cages, raceways and tanks. For cage culture, state departments of fisheries have leasing and licensing procedures allowing cage culture in public waters.
The Nile Tilapia was introduced to India during late 1970s. In 2005, river Yamuna harboured only negligible quantity of Nile Tilapia, but in two years’ time, its proportion increased to about 3.5 per cent of total fish species in the river.
At this point, monoculture of tilapia is relatively rare. Tilapia has been incorporated into polyculture with shrimp, providing an additional cash crop and reduces the incidence and severity of viral and bacterial diseases in shrimp.
Presently in Ganga river system, proportion of tilapia is about 7 per cent of the total fish species. For tilapia farming in India, the optimum temperature for best growth is 15 degrees Celsius to 35 degree Celsius. However, tilapia can survive in 10 degrees Celsius to 40 degree Celsius.
In pond culture, farmers have introduced tilapia as an additional polyculture species into traditional carp ponds. Polyculture with carps has been reported in Andhra Pradesh, Gujarat and Tamil Nadu states. Shrimp and carp polyculture provides 3-5 per cent of national tilapia production.
The biggest challenge in tilapia farming is different aged and sized tilapia fish in the same pond due to their unconditioned propagation. As male tilapia grows faster compared to female tilapia, one should consider raising male tilapia by separating females which is known as “mono sex tilapia fish farming”.
Tilapia is also used in aquaponics systems, but these contribute less than 1 per cent of national production.
As the male tilapia is well-adopted to supplementary feeding and due to its rapid growth, there is a huge profit in commercial tilapia farming. This fish has a very high demand in local as well as international markets. Providing nutritious food in commercial tilapia production is very important for quick growth and higher body weight of the fish.
Most farmed tilapia are Nile tilapia Oreochromis niloticus, although there are some O. mossambicus and red tilapia hybrids cultured, especially in areas using higher salinity water for polyculture. Virtually all tilapia produced in India is sold in domestic markets as whole fish on ice. MPEDA has a licensing program for importation of brood stock to public and private hatcheries. Genetically Improved Farmed Tilapia (GIFT) has
Agro & Food Processing January 2018
Because the hormone is used at a low concentration for the first 21 days of feeding, there are no measurable residuals in the fish at harvest. Most tilapia hatcheries are privately owned stand-alone operations that sell to a network of grow out farmers. Tilapia business Tilapia, the fish commonly known as aquatic chicken for its resemblance to chicken in taste, is the new buzzword in the Indian seafood sector, which is looking to diversify from its over dependence on farmed shrimp. A vast population, especially the young generation in rural India can be deployed in the fishing industries. India now a marginal player in tilapia export is looking to meet the huge demand for the fish in the domestic market and to capture a significant share of about $6 billion global export of the fish currently dominated by China, by promoting large scale farming of the fish even in landlocked states. Over the years, exports of Indian seafood have been on the increase with many Indian brands in the preferred list of Europe, America and other highly developed nations. The poverty- stricken and protein-deficient population in the country can find an income source and maintain healthy life as well from fish farming. The nutrition value of fish and other marine prod-
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Emerging Culture
14 ucts has been measured and proven to be one of the highest, as compared to any other commonly available food products.
that’s mild in flavour, which makes it appealing to people who don’t like “fishy” fish. It’s relatively low in calories (130 per 3.5-ounce serving, cooked) and rich in protein (26 grams). But if you’re looking for a lot of hearthealthy omega-3 fats, tilapia is not a good choice.
The present market demand globally and in India is for processed seafood. Once the source has been taken care of, processing and value addition can be carried out in MSME units. Ideally, India needs to mainly focus and specialise on some high-value species, climatically most adoptable for farming on the Indian soil and available in our EEZ, such as different varieties of Tuna and for farming, besides shrimp, the country can introduce large scale tilapia farming in a planned manner. Experts believe tilapia fetches around Rs 120 to 150 per kg for the farmer at a cost of production of just Rs 60 per kg. A farmer can make a profit of Rs 60,000 from a three-tonne capacity tank with 60000 fingerlings in a cycle lasting 45 days. Since they can run seven cycles annually the profit can touch Rs 4.8 lakh. As the demand for fish is increasing, diversification of species in aquaculture by including more species for increasing production levels has become necessary. Introduction of tilapia in our culture systems is advantageous because it represents lower level in food chain and, thus, its culture will be economical and eco-friendly. Mono sex culture of tilapia is advantageous because of faster growth and larger and more uniform size of males.
duction of Exotic Aquatic Species into Indian waters. Non-requirement of feed, resistance to disease and 70 per cent survival rate of the fingerlings keep cost of production down. And unlike other several other species that are bred, tilapia can be grown in tanks, ponds or cages, which add to its advantages. MPEDA is expecting to raise the production of tilapia output in the country by increasing the seed supply of genetically improved farmed tilapia (GIFT) to the farmers. It recently launched a self-sufficiency project at its hatchery and training complex in Kochi to help farmers export their produce. Currently, farmed shrimp, particularly vannamei species, accounts for nearly 70 per cent of the value of Rs 33000 crore seafood exports from India. The nutrition angles Tilapia is a white-fleshed freshwater fish
Only four fish farmer groups, Aresen Bio Tech, AP, Vijayawada; Ananda Aqua Exports, Bhimavaram, AP; Indepesca, Mumbai; CP Aqua (India), Chennai; and Rajiv Gandhi Centre for Aquaculture (RGCA), the R&D arm of the Marine Products Export Development Authority (MPEDA), are already permitted by the Government of India for the seed production and farming of tilapia (mono sex and mono culture of Nile/GIFT/golden tilapia) in accordance with the guidelines for the hatchery operation and farming of tilapia, developed by the Sub-Committee under the National Committee on Intro-
Agro & Food Processing January 2018
It has very little fat—2 to 3 grams per serving, of which less than 0.2 grams is omega-3s (in contrast, both wild and farmed salmon have more than 1.5 grams of omega-3s per serving). Farmed tilapia is particularly low in omega-3s because its diet is predominantly corn- and soymeal-based, in contrast to the omega-3-rich algae and other aquatic plants that wild tilapia feed on. Govt. Initiatives Tilapia was first introduced to India in 1952 and there were several subsequent introductions of various species and strains. However, few if any of these attempts led to much commercial production of fish. In 2009, MPEDA developed a formalized plan to regulate the importation of new stocks and to regulate the heretofore unofficial and unorganized production and trade of tilapia. The newly imposed regulatory framework and its attendant introductions of improved strains, quarantines, biosecurity and market development have finally shown results and led to significant commercialization.
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Emerging Culture
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introductions of various species and strains. However, few if any of these attempts led to much commercial production of fish. In 2009, MPEDA developed a formalized plan to regulate the importation of new stocks and to regulate the heretofore unofficial and unorganized production and trade of tilapia. The newly imposed regulatory framework and its attendant introductions of improved strains, quarantines, biosecurity and market development have finally shown results and led to significant commercialization.
The survey conducted in early 2017 provided information supporting a tilapia production estimate of 18,000 t in 2016. Prospects are positive and in 2020 production should be close to 22,000 Suggestions for further improvement of tilapia production in India include further distribution of improved stocks, better formulated and floating feeds, deployment aquaculture production 19 xof 15 advanced cm
Continued avoidance of misuse of antibiotics and other drugs should be encouraged.
India is geographically poised to be the world leader in the fisheries sector, Being the biggest peninsula in the world, with its vast coastline of 7,517 km and EEZ (Exclusive Economic Zone) of 200 nautical miles, network of lakes, rivers and numerous other inland water bodies, it can easily surpass any other nation in fish production.
Conclusions Tilapia was first introduced to India in 1952 and there were several subsequent
A vast population, especially the young generation, in rural India can be deployed in the fishing industries.
systems and continued quarantine and tighter biosecurity standards.
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BUMPER CRASH
18
Bumper production, a black hole for pulses economy? Pulses production in India, the world’s largest producer and importer, touched an all-time high of 22.95 million tonnes in the 2016-17 crop year (July-June). Moreover, the country imported about 5 million tonnes pulses last fiscal, leading to huge availability in the domestic market and a price crash.
A
bumper crop should ordinarily mean good news but a record harvest of pulses in India last year has led to a problem of plenty. The domestic demand for pulses is around 24 MT. The unexpected increase in the production of pulses last year tied the government in knots. Its decision to import 6.6 MT of pulses to help consumers who suffered unprecedented increase in prices, backfired when domestic stock of pulses subsequently arrived in mandis.
Last year, India’s production was 23 million tonnes (MT), the highest ever, 40 per cent more than the previous year. This was owing to good rains, higher minimum support price (MSP) and higher acreage. High production should have meant lower imports. No such luck. Last year’s imports were at an all-time high of 6.6 MT, that too at zero import duty. This caused prices to crash, in some places to half of the MSP. Farmers faced ruin. In barely 18 months, the price of tur dal has gone down from Rs200 to Rs30 a kilo. In its desperation, the government initiated an unprecedented procurement of pulses, and bought 1.6 MT to support prices. That didn’t help because of the surplus besides, the government was running out of storage and fiscal space. Due to the misfortune of pulses prices this year, we can be sure that its acreage will fall drastically, and we may have a shortage and high prices next year.
The government is now struggling to clear its stock of imported pulses, and has allowed exports of pulses anticipating a bumper production this year. India is the world’s largest producer, consumer and importer of pulses. That may sound contradictory, but isn’t, because domestic production is unable to meet the large and growing domestic demand.
Agro & Food Processing January 2018
Demand for pulses During the pulses price crises a year ago, it was estimated that Indian consumption demand for pulses is upwards of 250 lakh tons, and there was a huge shortfall in domestic supply with production staying in the range of 160 to 170 lakh tons. So, the reasoning went, prices were demonstrating a sharp spike. Assuming that India started the 20162017 crop season for pulses with a bare minimum of 5 lakh tons of carry-in stock, the production of 224 lakh tons and the normal annual import of 50 lakh tons, should keep the total supply at around 280 lakh tons. Experts believe that consumption increases to 260 lakh tons as low prices bring more consumers, there should be no stock of pulses left with private sector, by the end of the year. Only the government agencies shall be holding little over 20 lakh tons, as buffer stock. But this scenario is hard to digest, as current market prices do not match, with farmers being paid lower than MSP for tur and only a little over MSP for chana. Besides this, government agencies have been finding it hard to offload the stock even during the peak demand months of April-May for tur. In other words, the estimates of 250-260 lakh tons of consumption are humongous, and may actually include the stock held by private
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BUMPER CRASH
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primary producers. In India import duties on pulses were abolished during the high price regime to enable cheaper imports and contain inflation. However, they remained at the zero level even after it became clear that the country was returning to a high production phase. The 10 per cent import duty on tur, which came late in March 2017, should have actually come back in October or November 2016, when Indian farmers started harvesting the crop. This would have prevented any cheaper imports further causing distress sales. sector that has not been disclosed. The government needs to make efforts to ascertain stock held by the private sector at regular intervals, so that it is not counted towards consumption demand and can thus prevent any sharp spike in prices, citing demand as a reason. Country imported 5.67 million tons pulses in FY 17 A record high crop output, along with record imports, has created mayhem in pulses market, with farmers unable to sell pulses even at minimum support price announced by the government. In FY17, the total import of pulses increased 19.9 per cent to 5.67 million tonnes, which, along with 22.14 million tonnes of crop, has improved the availability for the year by around 27.8 million tonnes, against the average normal consumption of 24 million tonnes. At the end of March, the government had imposed a 10 per cent import duty on tur. However, it did not much help farmers, as by that time 4.47 million tonnes of imported tur/arhar had arrived in India. But the importers in the Pulses and Grains Association (IPGA) want the government to relax stock limit for pulses and allow exports.
in lower prices in the domestic market.” Of the total imports, over half of the import was of Yellow Peas (Matar) at 2.93 million tonnes, up 58 per cent from previous year. The import of Chana stood at 880,000 tonnes. The problem in tur, which is in the eye of a storm, was nearly 40 per cent of the total annual import (447,000 tonnes) only in the December quarter. Tur/Arhar imports fell in the March 2017 quarter by 24 per cent following a good crop. India’s total tur crop in 2016-17 is estimated at 4.23 million tonnes, and hence the total imported tur is only a little over 10 per cent. Incidentally, even government agencies that were given the target to procure 2 million tonnes of pulses in 2016-17, including kharif and rabi, have completed kharif procurement and the biggest agency has now suspended buying at MSP. Import duty on pulses World over, import duties are used to protect the domestic producers of any country. In case of agricultural commodities, they are used to protect farmers who are
Data compiled by IPGA from clearing/ forwarding agents show that the highest increase in import took place in last two quarters, when two-thirds of total pulses were imported. FY16 was an unusual year for pulses, as domestic crop was much lower, at 16.35 million tonnes, due to drought. An importer of pulses said: “Import contracts are finalised much more in advance, so imported commodity arrived when domestic crop arrivals also started resulting
Agro & Food Processing January 2018
Also, it is not clear whether the duty applies to lentils, which are near substitutes for tur, especially the yellow variety. These are being readied to be dumped into India at reduced prices. The import duty on chana, which should have come into effect in January 2017, when prices started crashing, is yet to see the light of the day. Inspite heavy production government continues import Domestic absorption in recent years (2012-13 to 2015-16) has hovered between 21 million metric tonnes (MMT) and 23 MMT, while domestic production has ranged from 16.4 MMT to 19.3 MMT. But last year (FY 2016-17) was an anomaly that has confounded many a keen observer of this sector. In 2016-17, India witnessed its highest ever domestic production of pulses — a staggering 22.95 MMT. The record production can plausibly be attributed to a normal monsoon in 2016 after two consecutive drought years, high market prices of pulses prevailing at the time of the kharif sowing and steep hikes in the Minimum Support Prices
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per quintal. Moong prices crashed to Rs 3,000 per quintal in Pali and Rs 3,400 per quintal in Tonk in Rajasthan — MSP for moong being Rs 5,225 per quintal. Urad prices plunged to Rs 3,690 per quintal in Harda and Rs 4,000 per quintal in Raisen in MP against an MSP of Rs 5,000 per quintal. In such a climate, the MSP announced by the government for moong, Rs 5,575 per quintal, for the kharif marketing season, 2017-18, shows that the policymakers are totally divorced from the plight of peasants or are simply anti-farmer.
(MSP) — up to 9.2 per cent for kharif and 16.2 per cent for rabi pulses. These favourable conditions significantly drove up kharif acreage to almost 36 per cent above normal. The production of kharif pulses increased by nearly 70 per cent in 2016-2017 over that of the previous year and the total production of pulses increased by about 40 per cent. Normally, in a year of such bumper production, imports would be expected to fall significantly, and one would assume India to have become self-sufficient in pulses — a goal that had its origin in the Technology Mission on Pulses, nearly 27 years ago. However, the reality was very different. India imported a record 6.6 MMT of pulses, valued at nearly $4.3 billion (see Figure 1) at zero import duty. As a result, domestic supply of pulses in 2016-17 shot up to 29.6 MMT, way above the typical supply of 22-23 MMT. No wonder this excess in domestic supplies caused wholesale prices to crash, despite a bold and first-of-its-kind effort by the government to procure around 1.6 MMT of pulses.
This price does not even cover the projected cost of production, Rs 5,700 per quintal. If there is no change in the government’s methods, we may either witness a decline in production of kharif pulses or another price crash this year. That may spur another round of farm loan waivers. The historic roller coaster of pulse prices are most likely to continue. Will India keep its commitment with Mozambique? Following a record crop of 23 million tonnes in 2016-17 and a surge in imports at 6.6 million tonnes—the import of
In February, tur prices were Rs 3,914 per quintal in Maharashtra and Rs 3,256 per quintal in Hubli in Karnataka, much below the MSP of Rs 5,050
Agro & Food Processing January 2018
125,000 tonnes of pigeon peas from Mozambique in 2017-18 seems a commitment New Delhi cannot keep. The pact signed with Mozambique to buy arhar grown there was the centrepiece of Prime Minister Narendra Modi’s visit to the East African country in last July. It followed consecutive years of drought in India with production dipping to 16 million tonnes in 2015-16, the lowest in six years. A directorate general of foreign trade notification says the restriction on imports does not apply to the Indian government’s import commitments “under any bilateral/regional agreement/MoU.” News reports from Mozambique says India has imposed quotas on pigeon pea imports, listing it under the “restricted” category of imports from the “free” with a stricture saying that only 200,000 tonnes of pigeon peas can be imported in any one fiscal year. India has so far imported 30,000 tonnes out of its committed 125,000 tonnes for 2017-18, a report in the Club of Mozambique news website said. According to the text of MoU, available on the website of India’s consumer affairs ministry, India has committed to buy 125,000 tonnes of pigeon peas in 2017-18. Two Indian government officials confirmed that officials from Mozambique were in New Delhi to discuss the subject of exports of pulses under the terms of the MoU. Africa is important for India for several reasons. It forms the western boundary of the Indian Ocean through though which a major chunk of India’s energy supplies as well as trade passes. “With GDP growth in Africa going up, it is a market for goods and services from India,” said Lalit Mansingh, former foreign secretary. “With India looking for a larger say in international issues especially at the UN, Africa is important as India looks for support at the UN Security Council,” Mansingh said. Government Lifts Curbs on Export After protest of farmers and opposition protest in Lok Sabha, the government
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modity markets have remained stunted. This time, the volatility in prices was on account of several factors. One is that when it comes to pulses, there is no real global market. The biggest consumers of pulses are Indians. When India’s pulses production goes up, international prices crash. When India begins importing, international prices climb. India is the market. And other countries grow pulses with an eye on demand and production in India.
removed export curbs on all varieties of pulses to ensure farmers get remunerative prices. “The Cabinet Committee on Economic Affairs (CCEA) has given its approval for removal of prohibition on export of all types of pulses to ensure that farmers have greater choice in marketing their produce and in getting better remuneration for their produce,” an official statement said. The decision comes two months after the government lifted ban on export of tur, urad and moong dal, although shipments of these varieties were allowed only through permission from agriculture export promotion body APEDA. Exports of organic pulses and kabuli chana is permitted in a limited quantity. IT and Law Minister Ravi Shankar Prasad said, “Opening of exports of all types of pulses will help the farmers dispose of their products at remunerative prices and encourage them to expand the area of sowing”.The CCEA empowered the committee headed by food secretary to review the export and import policy on pulses and consider measures such as quantitative restrictions, prior registration and changes in import duties depending on domestic production and demand, local and international prices and global trade volumes, he said.
statements on the issue of pulses in the Lok Sabha since the beginning of 2017. There is a rage among farmers because prices have crashed. Prices crashed because of domestic oversupply, that would have been a bit more bearable. Agricultural products in India are always subject to huge market price volatility. One reason is the enormous speculative appetite of traders who act as middlemen between the producer and the market. The second is the absence of any real commodity market. Each time the commodity market shows signs of maturing, the government comes in with a ban on trading agricultural products. It is not as if the government does not have other weapons in its arsenal. It can always impose stiff margins to put the brakes on excessive trading. This is what SEBI allows the BSE and the NSE to do with stock markets. Or it can even resort to imports. Or it can dip into strategic reserves. However, it appears that the government’s favourite weapon is a ban on trading in that commodity. Hence com-
Recently, the government had imposed quantitative restrictions on some of the pulses to check cheaper imports. For the year 2017-18, the government has fixed a target of 22.90 million tonnes of pulses production. Misdirect focus by the policy makers The issue of pulses is high on every politician’s mind. There have been at least five
Agro & Food Processing January 2018
So, when India’s pulses production goes up, prices in India crash. And anticipating a slowdown in off take, global markets too witness a crash in prices, because it knows that demand from Indian markets was bound to decline substantially. And this is where the farmers are justified in becoming livid. Everyone knew that acreage under pulses cultivation had soared given the firm trend of upward prices movement. This was evident to India’s planners in mid-2016. All the planners were aware of the bountiful monsoon season last year. Given both increased acreage and good rains, it was obvious – even eight months ago – that India’s pulses production would soar. Yet India kept importing pulses. The farmers have a right to know why? The farmers are also sore that the government has continued to pamper wheat and rice growers with a procurement policy. They have begun asking why a procurement policy has not been extended to pulses. A big relief for farmers was the government decision last fortnight to impose a 20 per cent duty on pulses imports. The
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BUMPER CRASH
26 other good news for consumers was that prices of pulses had begun to cool off. They would not have to cry themselves hoarse over pulses becoming more expensive.
tic pulses, else the MSP is irrelevant. A peculiar situation arises in the case of yellow peas, which constituted the largest share (3.2 MMT) of total pulses imported in 2016-17. Its landed price was around Rs 2,550 per quintal, while the MSP for chickpea was Rs 3,500 per quintal.
Yet, farmers howled with fury when the central government informed state governments that it would not resort to mop up of pulses through procurement measures. It seemed as if policymakers have been anxious to make the right moves without rocking the proverbial agricultural boat in North India. Thus, rice and wheat continue to be favoured with a procurement policy. Pulses have been ruled out for such a treatment.
While the two are not the same, yellow pea is widely used as an adulterant in the preparation of besan.
North India is important. That is where the country has the maximum number of elected seats. That is where India has its wheat basin. And rice too – especially basmati which is a major export earner and political funds grabber. Not surprisingly, many of India’s policies are directed towards wheat and rice, even it is to the detriment of economy and to the very moral fibre
This should have called for a 3040 per cent import duty on yellow pea. Without such a duty, the imports of the yellow pea hit the Indian farmers adversely.
of those who are in charge of agricultural produce procurement. Solution for the problem The landed price of imported pulses should not be below the MSP of domes-
Second, if the government really favours free trade, as duty-free imports suggest, why have exports of pulses been banned for over 10 years? For our farmers to have a level-playing field, exports of all pulses must be opened up without any quantity or minimum export price (MEP) restrictions. Export restrictions betray an-
Agro & Food Processing January 2018
BUMPER CRASH
27 fertility since they provide nitrogen through fixation. Indeed, a pulses plant is called a mini fertilizer factory. Pulses were part of the six technology missions created in the 1980s (they were added to the oilseeds mission), to greatly enhance their production, use of technology and processing.
ti-farmer policies. Third, pulses should be de-listed from the Agricultural Produce Market Committee (APMC) Act so that farmers can sell freely to whosoever they like, enabling a better realisation for the agriculturalists and a compression of the pulses value-chain. Fourth, the relevance of the Essential Commodities Act (ECA), especially the provision that imposes stocking limits, must be critically evaluated and the act should be amended drastically. Unless private players are reassured that no ad-hoc stocking limits will be imposed, there will be no investments in building storage and efficient value-chains. Prices, consequently, will crash during harvest time, hitting farmers adversely. Fifth, it is crucial to give the farmer right incentives — at least some reasonable margin above the cost of production. The MSP for moong for the kharif marketing season 2017-18 fails farmers on this count. Finally, futures trading should also be allowed for all types of pulses so that planting and selling decisions of farmers are based on a futuristic rather than a backward-looking price information. With these policy changes, and a reasonable buffer stock in place, the government can surely manage the pulses sector better. Conclusion Pulses are an important source of protein in India. Almost one-
fifth of total acreage is used to grow them. They are also an important source of soil
But despite the mission-mode approach, India is still not self-sufficient in pulses production. And farmers continue to be at the mercy of nature, markets, pests and government policies.
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Surpassing barriers, Indian seafood export set to touch new heights The highest export sales recorded in July (USD 791.22 million) and the lowest export sales recorded in the month of February (USD 175.94 million). However, in terms of quarter wise analysis, India did least shrimp exports in the first quarter of 2017 and it was highest in the third quarter of year 2017.
I
ndian seafood export is all set to cross $ 6 billion in the current year, backed by rising demand for shrimp in wake of dwindling supplies from other Asian countries The US leads the way for buyers during the Christmas and New Year season. “It is the peak season and there is increased demand. The prices are good too,’’ said Shivam Gupta, director of West Coast Fine Foods India. India is currently the top supplier of shrimps in the world, overtaking Ecuador, according to Globefish, the
information and analysis wing on fisheries and aquaculture of the Food and Agriculture Organization (FAO) of the United Nations. The report said Indian farmed shrimp production had reached 5 lakh tonnes last year, with vannamei shrimp, the most preferred variety, touching 4.06 lakh tonnes. Frozen shrimp maintained its position as the top item of export, accounting for 38.28 per cent in quantity and 64.50 per cent of the total earnings in dollar terms. Shrimp exports increased by 16.21 per
Agro & Food Processing January 2018
cent in terms of quantity and 20.33 per cent in dollar terms. Frozen Fish was the second largest export item, accounting for a share of 26.15 per cent in quantity and 11.64 per cent in dollar earnings, registering a growth of 26.92 per cent in terms of value. India exported $5.78 billion (Rs 37,871 crore) worth of marine products in 2016-17 with the US accounting for 30 per cent share marginally ahead of southeast Asia. “There is a rising demand for shrimps of small and medium sizes. Unlike Europe, buyers in the US go for bulk purchases. It is possible to ship 100-200
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Ghufran Naqvi
containers,’’ said Tara Ranjan Patnaik, VP of Seafood Exporters Association of India. Among the Asian countries, China and Vietnam are the major buyers. “Earlier, Vietnam used to re-export a lot of Indian consignments to the US. Though they still import, we now compete with them for selling shrimps to US buyers by offering better quality material,’’ said Patnaik. Thailand, which used to be the largest producer of farmed shrimp, is recovering from a viral attack on its farms a few years ago. Globefish said the country is expecting 5 per cent growth from its last year’s output of 2.5 lakh tonnes. But farms in Malaysia and Indonesia are still plagued by diseases. Indian production of
vannamei shrimp is predicted to go over 5 lakh tonnes in the current fiscal. With the increase in vannamei shrimp output in the past few years, seafood companies are scaling up their production facilities. Indian Shrimp Export Statistics of 2017 (Q1-Q3) According to shrimp export data of India 2017, the highest export sales recorded in July (USD 791.22 million) and the lowest export sales recorded in the month of February (USD 175.94 million). However, in terms of quarter wise analysis, India did least shrimp exports in the first quarter of 2017 and it was highest in the third quarter of year 2017. If we go through total quantity wise analysis of shrimp exports, 423814714 ki-
lograms have exported by India during Q1-Q3 2017. In terms of quantity, the highest shrimp exports recorded in September (71147855 kilograms) and July (69070154 kilograms) respectively. Go to the following table and check the month wise analysis of shrimp export from India. Here, we go through different Categories of Indian Shrimp that is exported. India majorly exports headless shell on (HLSO) shrimp to foreign countries. It recorded USD 1604.70 million with the quantity of 196991291 kilograms during Q1-Q3 2017 and represents 45 per cent of the total’s output. The other categories of shrimp that India exports are PDTO (peeled and deveined tail on), peeled & deveined, peeled & deveined tail off,
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peeled undeveined, head on shell on and BTTY-TO (butterfly tail on). Top Destination Countries of Indian Shrimp Indian shrimp is exporting to 80 different countries across the world. Indian seafood exports found its largest market the United States followed by Vietnam, Japan, United Kingdom and United Arab Emirates. India shrimp exports to USA stood at USD 1614.75 million with the total quantity of 166269926 kilograms during the period of Jan-Sept 2017. India has supplied 45 per cent of the shrimp shipments to United States only. As per shrimp export data, India shrimp exports to Vietnam recorded USD 836.43 million with the quantity of 120445423 kilograms. Top Indian States of Shrimp Exports Andhra Pradesh is the largest Indian shrimp exporter state and recorded USD 1285.33 million between January and
September 2017. Approximately 36 per cent of the Indian shrimp has exported from Andhra Pradesh only. Tamil Nadu is second largest in the list of shrimp exporting states of India. A total of 74096200 kilograms of Indian shrimp with the value of USD 688.60 million is exported from Tamil Nadu during the same period.
lined at ~$3 billion. Since 2010, shrimp production in Asia has been severely affected by diseases, floods, labour issues, and tightening environmental norms. Production in Vietnam has declined 40 per cent from peak levels because of shortage of fresh water, salinity intrusion and illegal shrimp farming.
India Departs Maximum Shrimp Shipments from Vizag Sea In 2017, India is exporting shrimp to its destination countries from 23 Indian ports. Vizag Sea is the biggest Indian port of shrimp exports. India has exported 31.13 per cent of the shrimp with the value of USD 1099.93 million from this port only during Q1-Q3 2017. Vizag Sea is followed by Krishnapatnam Port Sea, Kolkata Sea, Cochin Sea and JNPT (Nhava Sheva Sea) which recorded share value of 17.53 per cent, 15.72 per cent, 8.34 per cent and 7.53 respectively.
Thailand, which was once the top exporter, is now ranked 5th after a 65 per cent plunge in production from peak levels. And in 2016, China’s shrimp production nosedived 60 per cent even as its consumption more than doubled, rendering it a marginal exporter. In addition, these countries also faced significant quality challenges. On the other hand, Indian exporters have in the past few years emphasised on lower-density shrimp farms to control diseases, while maintaining quality across the value chain.
Indian shrimp exports anticipate to touch $7 billion by 2022 Experts believe that shrimp exports from India to nearly double to $7 billion by 2022, driven by strong demand, high quality, improved product mix, and an increase in aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal - even as its Asian rivals battle structural issues and rising domestic consumption. In fiscal 2016, India became the biggest exporter of shrimps, pipping Vietnam by just $100 million. A year on, the country has decisively pulled ahead, racking up $3.8 billion exports even as Vietnam flat-
Agro & Food Processing January 2018
What also helped was the use of resilient specific pathogen free (SPF) brood-stock imported from the United States. Consequently, between fiscal 2012 and 2017, India’s shrimp production doubled, and helped it grab the opportunity created by lower supplies from Asia. Rating company CRISIL rates 75 shrimp exporters, whose revenues grew at a compound annual growth rate of 9per cent between fiscals 2015 and 2017 to over $2.2 billion, and contributed to 60 per cent of India’s shrimp exports. China is struggling with both structural issues and surging domestic demand. Consequently, India’s primacy in shrimp exports is unlikely to be seriously chal-
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32 lenged over the medium term. Additionally, larger Indian exporters are expanding infrastructure to cater to increasing demand for value-added products from big global retail chains and restaurants. Therefore, we foresee value-added exports also rising from the current 15per cent levels significantly. Strong volume growth and higher proportion of value added products will bolster the operating profitability of shrimp exporters. Additionally, healthy accretions and the absence of major debt-funded capital expenditure will reduce leverage and further strengthen their credit profiles. Going forward, how the rupee moves and protectionist tendencies and increasing stringency towards quality, among importer nations would be the key monitorable. Indian shrimp dominating in U.S market Indian shrimp have been dominating the U.S. market in the last few years as supplies from Thailand and other countries in Southeast Asia have dropped, mainly due to disease, Seafood Exporters Association of India (SEAI) Vice President Kenny Thomas said. In fact, India recently took over as the top exporter of shrimp into the United States, with 30 per cent market share, as Thailand’s market share dropped to 29 per cent. Thomas estimated shrimp accounts for 70 percent of India’s exports – a total that has been increasing as shrimp farmers expand production of vannamei for export as well as domestic markets. That figure will continue to increase, Thomas said, despite the European Union’s move to inspect a larger percentage of Indian shipments. Currently, the E.U. checks 50 per cent of the con-
signments for quality norms, though it has threatened to inspect all shipments if India does not take further measures to reduce the number of shipments found to have unacceptable levels of antibiotics. The European Commission is currently conducting a review of the Indian inspection process and is considering a total ban on Indian seafood product imports, which could be announced and implemented in the next few months. The U.S. Food and Drug Administration will be closely watching the E.U. review and may consider its own review, depending on the outcome, the officials reported. Nevertheless, driven by steady demand, many Indian states have promoted shrimp
Agro & Food Processing January 2018
farming and increased production. Many new shrimp farms have popped up across the country, especially in the coastal areas, while the output at existing farms has also risen, the Society of Aquaculture Professionals S Muthukaruppan said. SEAI echoed Muthukaruppan’s findings, stating that Andhra Pradesh, West Bengal, and Gujarat have added more farms in 2017. If this production trend continues, Indian shrimp output will be approximately 500,000 tons during 2017-18, as compared to the 450,000-ton output recorded during 2016-17 fiscal year, Muthukaruppan said. India’s Seafood Export in previous fis-
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cals India exported 11,34,948 MT of seafood worth an all-time high of US$ 5.78 billion (Rs 37, 870.90 crore) in 201617 as against 9,45,892 tons and 4.69 billion dollars a year earlier, with USA and South-East Asia continuing to be the major importers while the demand from the European Union (EU) grew substantially during the period. Shrimp maintained its position as the top item of export, accounting for 38.28 per cent in quantity and 64.50 per cent of the total earnings in dollar terms. Shrimp exports increased by 16.21 per cent in terms of quantity and 20.33 per cent in dollar terms. Fish was the second largest export item, accounting for a share of 26.15 per cent in quantity and 11.64 per cent in dollar earnings, registering a growth of 26.92 per cent in terms of value. USA imported 1,88,617 MT of Indian seafood, accounting for 29.98 per cent in terms of dollar. Export to that country registered a growth of 22.72 per cent, 33 per
33 East Asia increased by 47.41 per cent in quantity, 52.84 per cent in rupee value and 49.90 per cent in dollar earnings. The overall export of shrimp during 2016-17 was pegged at 4, 34,484 MT worth USD 3,726.36 million. USA was the largest import market for shrimp (1, 65,827 MT), followed by the EU (77,178 MT), South East Asia (1, 05,763 MT), Japan (31,284 MT), Middle East (19,554 MT), China (7818 MT) and other countries (27,063 MT).
cent a n d 29.82 per cent in terms of quantity, value in rupee and US dollars, respectively. South East Asia remained the second largest destination of India’s marine products, with a share of 29.91 per cent in dollar terms, followed by the EU (17.98 per cent), Japan (6.83 per cent), the Middle East (4.78 per cent), China (3.50 per cent) and other countries (7.03 per cent). Overall, exports to South
Agro & Food Processing January 2018
The export of Vannamei shrimp, a major seafood delicacy, improved from 2, 56,699 MT to 3,29,766 MT in 2016-17, registering a growth of 28.46 per cent in quantity. In value terms, 49.55 per cent of total Vannamei shrimp was exported to USA followed by 23.28 per cent to South East Asian countries, 13.17 per cent to the EU, 4.53 per cent to Japan, 3.02 per cent to the Middle East and 1.35 per cent to China. Japan was the major market for Black Tiger shrimp with a share of 43.84 per cent in terms of value, followed by USA
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cent in terms of quantity, rupee value and dollar terms, respectively. Indian ports handled a total marine cargo of 11,34,948 tons worth Rs 37,870.90 crore (5,777.61 million dollars) in 2016-17 as compared to 9,45,892 tons worth Rs 30,420.83 crore (4,687.94 million dollars) in 201516. Vizag, Kochi, Kolkata, Pipavav and Jawaharlal Nehru Port (JNP) were major ports that handled the marine cargo during 2016-17. Exports improved from Vizag, Kochi, Kolkata, Pipavav, JNP, Krishnapatanam and Tuticorin as compared to 2015-16.
(23.44) and South-East Asia (11.33). Indian shrimp continued to be the principal export item to USA with a share of 94.77 per cent in dollar value while Vannamei shrimp to that country showed an increase of 25.60 per cent in quantity and 31.75 per cent in dollar terms. Vietnam, with a share of 76.57 per cent in value (US dollar), was the major South East Asian market for Indian marine products, followed by Thailand (12.93 per cent), Taiwan (3.88 per cent), Malaysia (2.60 per cent), Singapore (2.21 per cent), South Korea (1.50 per cent) and other countries (0.30 per cent). Vietnam alone imported 3, 18,171 MT of Indian seafood, the quantity being much more
than that of any other individual markets like US, Japan or China. The EU continued to be the third largest destination for Indian marine products with a share of 16.73 per cent in quantity. Shrimp was the major item of exports, accounting for 40.66 per cent in quantity and 55.15 per cent in dollar earnings out of the total exports to EU. Exports of Vannamei shrimp to EU improved by 9.76 per cent in quantity and 11.40 per cent in dollar value. Japan, the fourth largest destination for Indian seafood, accounted for 6.83 per cent in earnings and 6.08 per cent in quantity terms. Shrimp continued to be the major item of exports to Japan with a share of 45.31 per cent in quantity and 77.29 per cent in value out of the total exports to that country. Besides shrimp and fish, India’s other major seafood product was squid, which recorded a growth of 21.50 per cent, 59.44 per cent and 57 per cent in terms of quantity, rupee value and dollar earnings, respectively. Export of cuttlefish showed a decline in quantity terms, but increased in the rupee value and dollar terms by 18.85 per cent and 16.95 per cent, respectively. Dried items registered a growth of 40.98 per cent, 20.14 per cent & 79.05 per
Agro & Food Processing January 2018
Vizag port exported 1,59,973 tons of marine cargo worth Rs 9,294.31 crore (1,401.94 million US dollars) in 2016-17 as compared to 1,28,718 tons worth Rs 7,161 crore (1,105.76 million dollars) in 2015-16. Vizag port was followed by Kochi (1,55,989 tons, Rs 4,447.05 crore), Kolkata (1,04668 tons, Rs 4,451.67 crore), Pipavav (2,32,391 tons, Rs 4,217.45 crore), JNP (1,49,914 tons, Rs 4,084.96 crore), Krishnapatnam (62,049 tons, Rs 3,701.63 crore), Tuticorin (42,026 tons, Rs 2,220.52 crore), and Chennai (37,305 tons, 1,693.87 crore). Conclusion During FY17, the Indian seafood export registered an all-time-high volume with a y-o-y growth of around 20 per cent. The Industry recovered in FY17 after witnessing a setback in FY16 wherein exports declined by about 10% in volume terms. Major factors contributing to the strong growth in FY17 include increased production of Vannamei shrimp, diversification of aquaculture species, sustained measures to ensure quality and increase in infrastructure facilities for production of value added products. High dependence on the US market continues to remain a concern with the profitability of the shrimp processors dependent upon policy changes undertaken by the importing country. Thus, geographical diversification of exports would remain important for the industry players, going forward. Overall, the industry is poised to grow favourably given the liberalized FDI policy, favourable growth environment and increasing export demand.
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Agro & Food Processing January 2018
COVER STORY
36
T
he seafood industry in India has become one of the leading suppliers of quality seafood to all major markets of the world. Aquaculture sector in India witnessed boom with increased production of P. monodon and L. vannamei. The Indian government through MPEDA has provided various subsidies in form of financial assistance to purchase refrigerated trucks, seafood units’ upgradation, purchase antibiotic testing kit, set up cold stores etc. Exporters receive assistance for hygiene and sanitation, research and development, acquisition of machinery, promotion of exports. India has increased the quality of storages, road and transportation and availability of public cold stores, shipment connectivity. India has broken all the previous records and continues to ladder the CGAR year on year. Seafood exports in India stands second with 51,735 MT valued at Rs 9,066.06 crore (US$1.42 billion) in the first quarter of the current fiscal. The Demand-Supply Scenario of Seafood Industry in India It is expected that seafood industry will grow by 15 per cent this fiscal because of shortage in the global marine products market. In 2016-17, India exported $5.78 billion (Rs 37,871 crore) worth of marine products. There has been an increased interest in farming of shrimps, particularly Vannamei variety that enjoys great demand in the market now. The exports from India are likely to exceed $6 billion in current fiscal because of high demand for Indian shrimps in the global market. Director of John Bean Technologies India Pvt Ltd, Uday Sant said seafood industry is growing very rapidly as this is mainly due to competitive advantage compared to other Asia suppliers. Shrimp was the major item of exports, accounting for 40.66 per cent in quantity and 55.15 per cent in dollar earnings out of the total exports to European Union (EU). The EU is third largest destination for Indian marine products with a share of 16.73 per cent in quantity. Vannamei shrimp export to EU improved by 9.76 per cent in quantity and 11.40 per cent in dollar value. Japan accounts for 6.83
Seafood industry is rising high on the successful run Seafood exports have led to rise in number of shrimp farms in several states while existing farms’ output has increased in the past two years. Andhra Pradesh, West Bengal and Gujarat added more farms in the year 2017. Odisha registered an increase of about 17 per cent in the sea food export during the year 2016-17. While the total sea food export during 2015-16 was 35,630 MT and increased to 41,828 MT in the following year thereby recording an increase of 17 per cent in terms of quantity. per cent in earnings and 6.08 per cent in quantity terms. Shrimp is a major item of exports to Japan with share of 45.31 per cent in quantity and 77.29 per cent in value out of the total exports to that country. Managing Director of Ram’s Assorted Cold Storage Limited, Aditya Dash said global demand is increasing especially due to increase in demand from China, as their economy grows.
Agro & Food Processing January 2018
“Apart from that, due to health benefits and cholesterol no longer being a bad word, shrimp consumption is further getting a boost. With lower global prices, consumption of shrimp has increased since it is perceived as a premium product which is now available at commodity rates.” Besides shrimp, India’s other major seafood product was squid that recorded a growth of 21.50, 59.44 and 57 per cent in terms of quantity, rupee value and dollar earnings, respectively. Dried items registered a growth of 40.98, 20.14 & 79.05 per cent in terms of quantity, rupee value and dollar terms, respectively. Indian ports handled a total marine cargo of 11, 34,948 tons worth Rs 37,870.90 crore (5,777.61 million dollars) in 201617 as compared to 9, 45,892 tons worth Rs 30,420.83 crore (4,687.94 million dollars) in 2015-16. Vizag, Kochi, Kolkata, Pipavav and Jawaharlal Nehru Port (JNP) were major ports that handled the marine cargo during 2016-17. Exports
COVER STORY
37 Central Marine Fisheries Research Institute (CMFRI) This institute has emerged as a leading tropical marine fisheries research institute in the world. CMFRI makes continuous research towards estimation of marine fisheries landings and effort, taxonomy of marine organisms. The institute received Rs 9 crore from the Central government to give boost to the production of two marine fish species — cobia and pompano. CMFRI Director A. Gopalakrishnan said the new project will solve the scarcity issue of quality seeds of cobia and pompano – the most suitable species for sea cage farming in Indian waters. “Since the present marine capture fisheries are unable to meet growing seafood demand, we have to focus on increasing the marine fish production through mariculture activities.
of its exports improved from Vizag, Kochi, Kolkata, Pipavav, JNP, Krishnapatanam and Tuticorin as compared to 2015-16. Vizag port exported 1, 59,973 tons of marine cargo worth Rs 9,294.31 crore (1,401.94 million US dollars) in 2016-17 as compared to 1, 28,718 tons worth Rs 7,161 crore (1,105.76 million dollars) in 2015-16. Anwar Hashim, Managing Director of Abad Fisheries Pvt. Ltd said there is excellent demand in the industry, but the only thing is that price situation & market conditions. We sell whatever we produce and there is no hoarding of any items. Certain products we receive in bulk quantity during their season are retained to be used for off-period. Finished products require a lot of handiwork, which is normally frozen and kept as raw material and in the meantime, it is taken out for processing.
However, scarcity of quality seeds is a major hindrance to mariculture industry in the country. The proposed brood banks and regional hatchery facilities will cater to the requirements of quality seeds of cobia and pompano in all the maritime states.”
Government support and initiatives Sant feels there is need to increase raw material and power availability for the industry. This sector has to create more trained manpower to use the equipment and machinery efficiently.
CMFRI has collaborated with SAFARI (Societal Applications in Fisheries and Aquaculture using Remote Sensing Imagery), an international project developed by the United Nations Oceans and Society: Blue Planet’ initiative, under the umbrella of the Group on Earth Observation (GEO).
Dash said there are plenty of initiatives at the state and central levels for the seafood industry. Several projects are initiated by the government to promote and encourage this seafood industry. Agencies in association with the government have charted out many plans to boost the export of seafood products.
This collaboration will focus on the study of areas of fishing grounds and critical habitats to better understand how ocean occurrence such as changes in sea-surface temperature affect fish populations, changes in the ocean ecosystem due to climate change and how those may affect fish abundance and behavior.
Hashim stated that there are promotional bodies like MPEDA that provide us with assistance through subsidy, trade fairs.
CMFRI Senior Scientist Grinson George said “India has vast coastlines, we are unable to predict the fish abundance and there is a delay in assessing the areas of abundance and its dissemination to fishermen. India’s wild-catch fisheries operations could benefit from predictive modeling so they can better plan their
Even MoFPI gives subsidies to set up new factories or their upgradation, purchase of new equipment, etc. A change has been observed recently as the seafood products gained entry into domestic markets which were earlier kept only for exports.
Agro & Food Processing January 2018
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38
MPEDA is hopeful that seafood exports will exceed 6 Billion mark this fiscal Q) What is the demand- supply scenario of the seafood industry today? The supply situation in seafood export sector varies Dr. A Jayathilak with the season, as Chairman, MPEDA raw material for export as well as domestic consumption is sourced from wild and coastal aquaculture. With increased fishing pressure to cater to ever growing demand of seafood in various global markets, the sea catches are quite stagnating. The present catch trends give little scope for a complete reliance on the sea catch for exportable varieties. Things are better placed in coastal aquaculture, as farmed shrimp output is growing in a steady and healthy way to suffice the demand of various markets. The current has seen an increased output of shrimp from major producers which have stabilized the prices across the major markets. However, in countries like Australia, shrimps were dearer in the year end sales due to the restrictions imposed on imports of raw frozen shrimp products from various countries. As far as India is concerned, we currently use just 14 per cent of the potential area for coastal aquaculture, besides the coastal water bodies such as lakes and bays suitable for coastal mariculture. We are hopeful that with an appropriate water leasing policy for coastal waters, India can make great strides in the aquaculture production of various species of fin fishes and shell fishes. Q) What are the initiatives to promote/ encourage the seafood industry? MPEDA supports the industry by assisting in infrastructure development for value addition. We are also setting up a series of quality control as well as aquaculture laboratories to assist the sector to improve the quality of products raised and exported. We also promote different seafood products from the country in major international seafood expositions aboard. In addition, we undertake research and development activities to expand the diversity of species available for exports, pilot scale demonstration programmes, capacity building exercises among the
farmers, fishermen and technologists to equip their skills, quality management and popularize new and advanced technologies. Our next plan is to encourage the farmers and fishermen to get their harvest certified so as to get a better place in the retail segment abroad. Q) In terms of technological machinery, investment and R&D for this segment, where does India stand? The investments as well as R&D for technological advances in export processing are still on a lower end in India. Our units are mostly family-based entrepreneurship employing 300-400 workers on an average. The capacity and labour requirement of our units are tuned to the peak harvest season. However, certain countries in South East Asia that focuses on value addition engage 3000 odd workers per unit, besides investing heavily on process automation and high end value addition machinery. MPEDA is of the opinion that similar large scale units are required for the sector to focus more on production of value added marine products meant for retail markets abroad. This will equip the units to undertake year round processing and value adding tasks, even with imported raw material. Q.) On international grounds, certain seafood products consignments are rejected due to their stringent norms. What must be done to ensure smooth entry of Indian seafood products there? India has faced few rejections due to presence of antibiotic residues in the European Union market. We also had some on account of the presence of Vibrio cholerae in the South African market. However, the Government of India has taken various steps to address these issues. A delegation was sent to South Africa to understand the situation and undertake the remedial measures to avoid recurrence of rejections there. The quality plan is yielding results now. Very recently, we also had an audit from the Food Veterinary Office of EU, which had inspected official control over the various states in the seafood value chain. We are hopeful that the recommendation by the FVO Mission will be in our favor. At the field level, MPEDA has taken ap-
Agro & Food Processing January 2018
propriate measures to strengthen quality of the seafood produce, be it from capture or culture in tandem with the Export Inspection Council of India and State Fisheries Department. Pre Harvest Testing of farmed shrimps are being done by ELISA Labs set up by MPEDA, which ensures that the tainted farms are kept away from supplying shrimps to the export value chain. In addition, MPEDA also draws and analyses samples as per the National Residue Control Plan, which helps in monitoring levels of various residues in different marine products samples collected from farms, hatcheries, feed mills, processing units, fishing harbours etc. With collective measures by the stakeholders, we can continue to supply quality seafood products to different markets, and in compliance to their import regulations. Q.) India’s seafood exports up by 21 per cent in 2017. Please comment. With the increased output from farms and healthy sea catch, India continues to supply its different seafood products to various markets especially USA, South East Asia and Japan. There has been a growing demand for shrimps from various markets, especially the USA, and stability in the prices offered has helped the exporters as well as consumers to sustain the demand throughout. With this trend, we are hopeful that the exports will move ahead of US$ 6 Billion mark this year. Q.) What are the drawbacks/challenges that the seafood industry faces? What are the likely solutions for it? Indian seafood industry faces challenges in the form of Tariff as well as Non Tariff Barriers, besides competition from various developing nations, especially those from South East Asia. In addition, consistency in the supply of raw material from the capture fisheries is another major issue that is faced by exporters, for which a solution is to increase the dependence on culture fisheries. We are taking up these issues appropriately at various levels and also give impetus to value addition so that we will be able to judiciously utilize the installed processed capacity throughout the year rather than restricting its maximum usage to peak supply months. It is also advocated to source the seafood from other countries that have surplus supply, to add value and re-export. These management measures coupled with aggressive marketing strategies will provide better dividends for our marine products sector in the coming years.
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Development Board (NFDB) In 2006, National Fisheries Development Board (NFDB) was established as an autonomous organization under the managerial control of the Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture and Farmers Welfare, Government of India. This organization came into force to enhance fish production and productivity in the country and to coordinate fishery development in an integrated and holistic manner.
harvesting, and from better use of India’s satellite infrastructure to help fishermen locate bigger catches.” Director of CMFRI said private-public partnership was the need of the hour to boost mariculture. “There is a need to follow successful mariculture models implemented by South-East Asian countries where mariculture has grown significantly. The Chinese model of developing seafood-based products from plant-origin materials such as seaweeds and micro algae can complement the country’s requirements on growing demand for seafood, Apart from the traditional monotonous single species-oriented culture systems, India should go for multiple species in mariculture.” CMFRI is in the process to prepare guidelines for formulating National Mariculture Policy to enhance the sea cage fish farming ventures in the country. MPEDA The Marine Products Export Promotion Council established by the Government of India in September 1961 was converged in to Marine Products Export Development Authority (MPEDA) on 24th August 1972. MPEDA is given the charge to promote the marine products industry with special reference to exports from the country. This organisation takes all actions required to develop and augment the resources for encouraging the exports of all varieties of fishery products known commercially as shrimp, prawn, lobster, crab, fish, shell-fish, other aquatic animals or plants or part thereof and any other products.
MPEDA carries out inspection of marine products, its raw material, fixing standards, specifications, and training as well as take, all necessary steps for marketing the seafood overseas. This is the nodal agency for holistic development of seafood industry in India to realize its full export potential. Based on MPEDA recommendations, Government of India notified new standards for fishing vessels, storage premises, processing plants and conveyances. MPEDA’s main focus is on market promotion, capture fisheries, culture fisheries, processing infrastructure & value addition, quality control, research and development. Chairman of Marine Products Export Development Authority, A Jayathilak said that campaigns/awareness programmes at the producer level have been intensified to encourage producers to follow better management practices. The Andhra Pradesh government has initiated efforts to curtail the use of banned substances at the producer level by constituting district and State-level committees. The Centre has urged other coastal States to take similar action. As part of its efforts to ensure traceability of marketed products at the root level, MPEDA has initiated action for enrolment of all shrimp farms by the year-end. National
Agro & Food Processing January 2018
Fisheries
A wide range of fishery development activities are undertaken like intensive aquaculture in ponds and tanks, culture based capture fisheries in reservoirs, coastal aquaculture, mariculture, establishment of infrastructure, fishing harbours and fish landing centres, solar drying of fish, domestic marketing, deep sea fishing and tuna processing, ornamental fisheries, trout culture, artificial reefs technology upgradation and capacity building of fishermen and fish farmers are being supported through the State Governments. Another initiative by the government, Blue Revolution is put into action to achieve financial success of fishermen. The government has several schemes and projects to increase both fish production and fish productivity from aquaculture and fisheries resources The scheme has the following components: i) National Fisheries Development Board (NFDB) and its activities ii) Development of inland fisheries and aquaculture iii) Development of marine fisheries, infrastructure and post-harvest operations iv) Strengthening of database & geographical information system of fisheries sector v) Institutional arrangement for fisheries sector vi) Monitoring, control and surveillance (MCS) and other need-based interventions vii) National scheme on welfare of fishermen European Union stringent quality norms
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42 with Indian shrimps In 2016-17, the European Union accounted for 18 per cent of 5.78 billion seafood exports from India. Off late there have been increasing rejections of Indian shrimps because use of antibiotics like Nitrofurans and metabolites, AOZ, and chloramphenicol found in them. Indian seafood exports have reportedly come under inspection in the European Union (EU). Greatly worried due to rejected Indian shrimps consignments, Agriculture Ministry held discussions with regulatory bodies like FSSAI to frame stringent legal action, including penalty against violators. The Department of Animal Husbandry, Dairying and Fisheries (DADF) under the Agriculture Ministry is in charge for animal disease monitoring and control under the relevant regulations. Therefore, regulatory bodies - Central Drugs Standard Control Organisation (DGSCO) and the Food Safety Standards Authority of India (FSSAI) under the Healthy Ministry are in consultation to plan out a regulatory mechanism so that effective enforcement is in place including penal action against violators. Representatives of coastal states, National Fisheries Development Board (NFDB), Export Inspection Council (EIC), Marine Products Export Development Authority (MPEDA), Central Institute of Brackishwater Aquaculture (CIBA) and other stakeholders attended the meet to discuss further course of action. Also recent ban of Indian seafood products by Kuwait and Thailand is another cause of concern for seafood exporters in India. Kuwait imposed a ban on imports of fresh, chilled, frozen and processed shrimps from India and Texas due to some suspected cases of diseases.
Thailand accounts for about 13 per cent of 1.70 billion dollar exports made to South East Asia that has share of about 30 per cent of 5.7 billion dollar India seafood exports market. Thailand seems like potential market for Indian shrimp products but as of now it has temporarily terminated import of shrimps from India creating chaos for Indian seafood exporters. The recent ban is a setback for the seafood industry as European Union, the third largest market of Indian exporters pointed out quality issues with the products thereby compelling India to send an audit team to inspect the facilities. Shipments are frequently being tested for antibiotic residue, especially for internationally banned antibiotics such as Nitrofuran, and contaminated shipments are rejected and shipped back at significant costs. A truck of rejected seafood costs the exporter around Rs.10 lakh. Collectively, these rejected shipments could drastically impact the industry with business going to competitor countries that offer assurances for safety and quality of their products. The EU was seriously worried over usage of antibiotics in Indian shrimps – an issue that has emerged continuously in their findings. They were dissatisfied with continued non-compliance and lack of progress made by the Indian authorities. The EU is a major market for Indian shrimps with nearly 19 per cent of total exports directed to this market. Aquaculture shrimps form about 60 per cent of shrimp exports. So such move would badly affect exports and have negative outcome on the seafood industry. Last year the US, largest importer of Indian marine products had
stepped up testing measures for consignments shipped from India, creating panic among exporters. Indian seafood exporters expressed sigh of relief on the favorable outlook of a two-member European Union (EU) inspection team that visited their facilities recently. The EU team was satisfied with the marine product export procedure followed in the country and ruled out imposition of any fresh restriction in this regard. “It seems export procedures are properly in place (in India) and no new restrictions are expected from the EU, unless there is a sudden change for example, an increase in Rapid Alerts at the EU border,” said the visiting official. Sant added that there would always be processors who might miss SOPs to ensure stringent Quality Check requirements of buyers/ more educated processors and continuous training by the nodal agencies like MPEDA and buyer might be the best way to tackle this. Dash suggested that Export Inspection Council should increase their budget and staff strength by 10 times and even state fisheries department and MPEDA must do the same. MD of Abad Fisheries said that there are certain rejections in Europe like out of 4000 consignments, 5 are rejected. India needs to be careful as the industry is still using the banned substance as per the regulations. Seafood exports touch new heights in 2017 Indian shrimps enjoy good acceptance in US as they dominate the US market since supply from Thailand and other South East Asian countries dropped due to widespread diseases in their farms in the last few years. In terms of value, the export increased by 23 per cent with a total turnover of around Rs 2205 crore. Similarly, total fish production during 2016-17 also increased by 18 per cent crossing the mark of 6.14 lakh MT. India seafood exports shall cross the $6-billion mark this fiscal and it would be attributed for better
Agro & Food Processing January 2018
COVER STORY
performance to good Vannamei crop and robust demand. The frozen shrimp had enabled seafood exports to touch 11.34 lakh tonnes worth $5.70 billion in FY17 and 65-70 per cent of the export basket comprised Vannamei shrimps. Director of John Bean Technologies India expressed content that seafood exports increased by 21 per cent in 2017. “It is great news for Indian seafood market and thanks to efforts of the seafood processors in swiftly capturing opportunities presented with better competitive situation and growing demand. The bigger and larger investment in sophisticated plants and machinery over the recent past would go a long way in supporting this continued growth.”
per cent), the Middle East (3.47 per cent), China (3.06 per cent) and other countries (5.79 per cent). The increase in production of L. Vannamei, diversification of aquaculture species, sustained measures to ensure quality, and increase in infrastructure facilities for production of value added products are the factors largely responsible for growth in exports of Indian seafood. stated that seafood exports will continue to grow, and the production of L. Vannamei will increase. “Availability of labour at competitive rates will also ensure that our shrimp exports will continue to increase, since cost of labour in Thailand and other Southeast Asian countries are no longer competitive.”
USA and Southeast Asia have maintained their position as major importers of India’s seafood, followed by the EU and Japan, while the demand from China seen a healthy rise during the period. Frozen shrimp continued to be top export item of marine products basket, accounting for a share of 50.66 per cent in quantity and 74.90 per cent of the total earnings in dollar terms. Shrimp exports increased by 20.87 per cent in terms of quantity and 21.64 per cent in dollar terms. Frozen squid was the second largest export item, accounting for 7.82 per cent in quantity and 5.81 per cent in dollar earnings, registering a growth of 40.25 per cent in terms of dollar value. Besides frozen shrimp and frozen squid, India’s other major seafood product was frozen fish recorded a growth of 24.96, 17.55 and 21.75 per cent in terms of quantity, rupee value and dollar earnings, respectively.
The overall export of shrimp during 201617 was pegged at 4, 34,484 MT worth USD 3,726.36 million. USA was the largest import market for shrimp in Metric Tonnes (1, 65,827), followed by the EU (77,178), Southeast Asia (1, 05,763), Japan (31,284), Middle East (19,554), China (7818). Japan was the major market for Black Tiger shrimp with a share of 43.84 per cent in terms of value, followed by USA (23.44) and South-East Asia (11.33). Indian shrimp continued to be the principal export item to USA with a share of 94.77 per cent in dollar value while Vannamei shrimp to that country showed an increase of 25.60 per cent in quantity and 31.75 per cent in dollar terms. Southeast Asian region is a huge market for Indian marine products, followed by Thailand (12.93 per cent), Taiwan (3.88 per cent), Malaysia (2.60 per cent), Singapore (2.21 per cent)
Chairman of MPEDA, A. Jayathilak said “healthy harvests of shrimp, drastic reduction in rejection rate by the EU countries, sustained measures to ensure quality and improved infrastructure facilities for production of value added products were chiefly responsible for India’s surge in seafood exports. What is satisfying is that growth in exports was achieved in the face of continued uncertainties in the global seafood trade.”
Few challenges Due to stringent quality standards set by international trade, the establishment cost of a processing plant has increased considerably over the years. The major threat to marine ecosystem remains illegal, unreported, and unregulated (IUU) fishing. Price uncertainties in importing countries lead to additional cost of storage and material getting delayed in shipment. Another issue is labour, which is becoming increasingly expensive, at times unavailable as the rising wage cost reflects improvement in income opportunities.
USA imported 54,344 million tonnes Indian seafood worth $499.28 million, accounts for a share of 35.05 per cent in dollar terms. Southeast Asia continued to be the second largest destination of India’s marine products, with a share of 31.26 per cent in dollar terms, followed by the EU (14.70 per cent), Japan (6.68
Quality and hygiene also need to be looked as the fishermen must be provided clean ice. Many port ice-factories are very unhygienic. Absence of quality control at primary production centres often
Agro & Food Processing January 2018
43 results in poor quality of the products. Dash said there is a need to address the issues affecting the industry. Problems like processing overcapacity, likely ban due to antibiotic usage should gain the right solutions before it affects the momentum of the seafood segment. There is need for more R&D required to tackle shrimp diseases. But a decision recently taken by European Union may pose as an eclipse for the Indian seafood exporters. Now EU has made mandatory for 50 per cent of each consignment to be tested, against the earlier 10 per cent claiming contamination antibiotics like Nitrofurans and metabolites, AOZ, and chloramphenicol in them. Industry is working with the government to find a solution. Ironically, all consignments are exported after being tested in government labs and getting a clearance certificate. So, the government has to take equal responsibility along with other stakeholders, if any consignment is detained with any forbidden substance. The government needs to upgrade the testing infrastructure in its labs. Hashim further elaborated that India has a long way to in terms of investment, technological machinery because our country does not do that much value addition to the products in comparison to Thailand, Vietnam or China. The cold chain infrastructure is a major drawback that needs to be worked upon. The transport and supply chain system has to undergo several changes. But the country has to abide the international obligations if they have to market their product in the global markets and compete with international standards. Therefore adhering to specified norms is a major step towards addressing both fisheries management and marine biodiversity conservation in an integrated manner in the country. On a concluding note, Sant feels there should be more focus on innovative farming practices to ensure adequate growth in the supply of the raw material with better in infrastructure like power and roads. This would make it help more competitive – though processors are looking more at automation today, a rained pool of manpower to support the profitable growth would be desired.
SAFE HANDS ?
44
E
stablished in 2011 under the Food Safety and Standard Act, 2006, the FSSAI is part of India’s ministry of health and family welfare. It is responsible for laying down scientific standards for food items and regulating their manufacturing, storage, distribution, sale, and import. However, the regulatory body has been in the news for lack of competent labs to conduct food tests. For instance, in 2015, FSSAI was engaged in a very public battle with Swiss multi-national, Nestle, after it alleged that samples of Maggi noodles contained higher-than-permissible content of MSG and lead. The crisis put FSSAI in the spotlight and even led industry watchers to question the regulatory body’s functioning. This episode led to the health ministry calling for a complete revamp of the regulatory body.
Later that year, the FSSAI’s then head Yudhvir Singh Malik was replaced with the current chief Pawan Agarwal. Since then, Agarwal has been making the right noises, urging the industry as well as policymakers to draft new rules, step up initiatives to revamp its laboratories, and train more food technicians. But going by the CAG’s report, FSSAI still has a lot of work to do; The Food Safety and Standards Authority of India (FSSAI) is accountable for approving that the food we buy and eat is safe for us, but going by the news that is circulating around the food Industry about its catastrophe regarding food safe-
The Food Safety Standards Authority of India (FSSAI) has been slammed by the Comptroller and Auditor General (CAG) of India for the lack of robust food-quality standards and ill-equipped laboratories, among other things and the country’s top food regulator has acknowledged some of the auditor’s findings, but not without defence. Agro and Food processing here provides detailed view and counterview of the issue
Agro & Food Processing January 2018
ty, has the regulator failed consumers and public. According to CAG’s observations, the Food Safety and Standards Authority of India (FSSAI) are guilty of various lapses in enforcing food safety across the country. It claimed that food articles that were declared unsafe by it remained up for sale in markets due to lack of adequate monitoring. Moreover, most of the laboratories across states do not have proper accreditation. So, the quality of their testing cannot be ensured. The CAG found that 65 out of the 75 State Food Labs did not have the National Accreditation Board for Testing and Calibration Laboratories accreditation according to the report. FSSAI and the State authorities had been sending samples to these labs despite this major glitch in documents. According to the auditor, FSSAI has failed to ensure that the customs authorities are following up with the
SAFE HANDS ?
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Food Safety and Standard Authority (FSSAI)
Is the
in a mess?
‘Non-Conformance Reports’ which are issued by the regulators. Further the regulator had failed to make sure that unsafe food is not entering India. The CAG also reported that glitch in FSSAI work included systemic inefficiencies, delays and deficiencies in the framing of various regulations and standards, amendments to regulations in violation of the Act and specific direction of Supreme Court. This came up in the audit which was conducted by CAG on food safety in 10 chosen states. There was a test check conducted on three Central and five State licensing authorities stated that the report and 3119 out of 5915 cases licenses were issued to the Food Business Operators due to incomplete documentation. CAG also reported that there was immense shortage of qualified manpower and functional food testing equipment in State laboratories and referral laboratories resulted in deficient testing of samples. The report further said that the FSSAI and State authorities did not document policies and procedures on risk-based inspections. Plus it added that the FSSAI did not have any sort of database on food businesses.
staff and handholding National Accreditation Board for Testing and Calibration Laboratories accreditation.
certificates in time. Sometimes when it did cancel the certificate, it allowed the sales licence for the product to stand.
Apart from the low grade laboratories fact, when the CAG did a test audit of 50 proprietary food products approved for sale to consumers between 2012 and 2014, it found that even the diluted regulations were not followed. In many cases, the authority did not send the product for scientific assessment even after giving it the temporary no-objection certificate.
The actual guideline of FSSAI requires food firms to provide scientific evidence that their product is safe. Only after the authority’s scientists were satisfied was the product to be allowed in the market.
A note written by the authority’s chief executive in May 2015 shows, it had issued such certificates to over a thousand products but sent only 200 of them for testing. In the case of at least four products, the authority continued to allow sale for up to 47 months after the scientists rejected them as unsafe. For some products, the authority did not cancel the no-objection
And to say all these loops are found even when the Central government is making an investment of Rs 480 crore to strengthen state food laboratories and referral laboratories. It is also investing in training of
Agro & Food Processing January 2018
Starting from 2012, the authority has diluted its regulations, bypassed established protocols and ignored warning from its scientists to allow the sale of more than 800 processed foods with new formulations without assessing their safety. Some of these are still in the market. The authority enabled this by diluting the 2011 guidelines to give temporary oneyear no objection certificates to products even before its scientists had examined them.
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46
company did not provide scientific evidence of the tablet’s safety, the scientific panel cancelled the no objection certificate in August 2014. Yet, the company continued to carry the licence to sell the tablet till December 2017. It still promotes Spirulina tablets on its website, though it could not be ascertained if this is the same product that has been banned. The authority does not require companies to disclose such details on their websites.
The dilution goes against the provisions of the Food Safety and Standards Act, 2006, mandating that only scientific panels can decide if a food product or food type is safe to consume. The bureaucrats heading the authority can issue licences for food business operators to sell a product only after the scientists have approved it as safe. CAG highlighted the case of a company called Chemical International that had received a no-objection certificate to sell a mushroom-based nutraceutical in August 2012. A month later, the authority’s scientists asked for the product to be banned as the company had not submitted clinical data about its claimed health benefits. But the authority did not cancel the licence for the product.
manufacture and sell a harmful product. Despite the authority’s action, Pushpam Foods continues to promote the drink on its website. The food safety authority has evidently failed to check whether the product has been withdrawn from the market. As the Comptroller and Auditor General of India (CAG) pointed out in a recent report, had the authority followed its own guidelines framed in 2011, products such as Restless Ginseng would not have been put in the market in the first place. Another interesting lapse by FSSAI came into light was when, in August 2013, the safety authority gave a company called Surya Herbal a licence to sell Sunova Spirulina tablet. But since t h e
Another astonishing case was in December 2013, when FSSAI allowed permission to a company called Pushpam Foods and Beverages to sell an energy drink called Restless Ginseng. Within a year, its scientists gave senior officials the information that Restless Ginseng’s main ingredients: caffeine and ginseng, made a dangerous combination that could increase heart rate and blood pressure. And this information was well-recognised in the rest of the world: Unfortunately, the authority took seven good months to respond. It was only in June 2015 that it withdrew the no-objection certificate given to the company to sell the product. For a year and a half, the company was able to
Agro & Food Processing January 2018
Restless Ginseng is probably not the only potentially harmful energy drink that the authority has allowed. The CAG said it was likely other companies besides Pushpam continue to sell drinks with the same dangerous concoction of ginseng and caffeine. The authority has also granted the approvals arbitrarily. In January 2013, it allowed the Indian biotech company Biocon to market its nutraceutical tablet S-Adenosyl Methionine but denied permission to Sun Pharmaceutical Industries to sell the same product in August that year. Although Biocon’s product approval was withdrawn about a year later, the company continues to hold the licence to sell the nutraceutical till May 2020. This arbitrary clearance system was struck down when challenged before Bombay High Court and its decision was validated by the Supreme Court in 2015. With clearance regime banned by the courts, sale of proprietary food products should have stopped until a new system was put in place. But, the CAG found, a month after the judgment of the Bombay High Court, the food safety authority issued ‘blanket instructions’ to its licensing authorities to renew or continue all existing licences issued on the basis of the no-objection certificates it had already issued. Consequently, FSSAI permitted the indefinite manufacture, distribution, sale or import of possibly unsafe foods, the CAG said. The regulator did not take any action after the final orders of the Supreme Court to withdraw these blanket instructions. Despite this, the food authority, and Union health and family
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SAFE HANDS ?
48
safety expert. Another proposed mechanism is for food companies to voluntarily participate in the Responsible Food Company Index that will measure and monitor the workings of food businesses beyond statutory compliance. Successful implementation of these processes will ensure an efficient market-based mechanism of self-assessment in food safety.
welfare ministry which oversees it, have been dismissive of the CAG’s report. The main thrust of their defence is that it’s old news ¬and a new set of regulations has been put in place starting 2016. Counterview Well it is important to point out that food safety is an important issue to sustain a nation’s growth in the long run. Unsafe food affects the overall competitiveness of a nation and to be specific the food industry. Food safety and hygiene are such burgeoning issues in a country like India, where not only the food sector but food trade gets affected in a negative way. Western countries with their strong safety policies usually ban Indian food just on the basis of safety resulting in heavy losses for exporters and agro processing industry. Moreover, most of the burden is borne by the population at the bottom of the pyramid as they are usually more price- than quality-sensitive. Therefore, a strong food regulator becomes an absolute necessity for a nation’s sustained and balanced development. Keeping these factors in mind, FSSAI was established in 2006 under the Food Safety and Standards Act.
However, can we blame the authority for all blemishes; many believe that the CAG audit has taken a rather stringent view on the matter. Even though it has been a decade since enactment of the food law as the report points out, implementation has always been a challenge for FSSAI due to lack of resources. After the legislation was passed, resources from the earlier regime were reshaped to fit in with the new policy. Moreover, there were legacy issues. Each state has its own unique system of food regulation which failed to evolve with the new policy. Insufficient manpower and funding impeded the process further. FSSAI is definitely taking active steps countering these issues. It is a big thing to micro manages safety standards on a national scale in a country like India, while the food regulator is aiming to enforce a system of self-regulation. Actually FSSAI has finalised third-party auditors of food businesses and mandated the units to have at least one trained food
It was an important step which combined all the food safety legislation spread across different ministries under one head and marked a paradigm shift in food policy from a narrow focus on adulteration to a more holistic approach on the provision of safe and wholesome food. This implied a shift from mere testing of the final food product for adulteration to implementing mechanisms that prevent the communication of pathogens across the supply chain. The latter approach ensured safety from “farm to plate”.
Agro & Food Processing January 2018
As far as food laboratories are concerned, FSSAI is bringing them under the Indian Food Laboratory Network (InFolNet), a digitally centralised management system that will connect all food labs across India. All the tests and results will be available on the platform for greater transparency and reduction in information asymmetry between consumers and food businesses. It is also in the process of setting up more NABL (National Accreditation Board for Testing and Calibration Laboratories) — accredited food labs across states beyond the two that it owns and operates. Lastly but not the least, FSSAI is about to roll out a “one-nation, one-food-safety law” regime so that every state-level authority follows a common standard of practice for implementation, compliance and enforcement of food safety regulations. It is standardizing the procedures around inspections done at the state level. Food safety experts will now have to follow a set of centrally-prescribed standards. This will eliminate any discrepancies across states and streamline the process of surveillance, sampling and inspection. The states need to play their part in complementing the efforts of FSSAI to ensure
SAFE HANDS ?
49 testing labs.FSSAI CEO Pawan Agarwal has requested the government to recruit 600 people in the central authority to help meet manpower shortage and discharge its function of framing standards as well as ensuring compliances.
food safety. A central body cannot ensure implementation across the country unless states take it upon themselves to drive the required changes at the micro level. It will also be in their best interests to follow up on FSSAI regulations. Ensuring provision of safe and wholesome food for citizens should be looked upon as an investment into increasing the
productivity of the workforce that will later reap economic dividends for the state itself.
Finally FSSAI appreciates the inputs from CAG to improve performance of food safety and the CAG report should, however, be seen in the context of the huge and complex task at hand FSSAI is new an evolving organisation and it faces severe constraints of manpower and resources and is committed to raise the bar for food safety and hygiene in the country so that citizens can trust food they get in the marketplace.
Thus defending itself quite well, Food safety regulator FSSAI has assured citizens that they can trust food they get and is committed to raise the bar of food safety and hygiene for which it is investing Rs 480 crore to modernise state food
Specifically, this is how the FSSAI has countered some of the CAG’s key observations • Food testing and state of labs: In its report, the CAG was critical of the FSSAI for the poor state of its testing facilities, citing a lack of relevant equipment. The FSSAI has been working to “ensure that its state food laboratories and referral laboratories are fully equipped and functional,” it said in its release. In 2016, the regulatory body was granted Rs480 crore by the central government to strengthen these facilities, it added. Several labs are also in the process of being accredited by the National Accreditation Board for Testing and Calibration Laboratories (NABL), another point noted by the CAG. • Standards for regulating food items: The CAG report stated that the FSSAI had failed to set standards for regulating certain food products, allowing the sale of items unfit for consumption. Replying to the CAG’s claims, the food regulator said, “The recent years have witnessed rapid progress in developing new regulations and food standards. FSSAI has notified nearly 9,000 provisions for use of around 400 food additives in various food categories.” These, it said, included regulations on imports, health supplements and nutraceuticals, and approval for non-specified food and food ingredients. • Compliance with food regulations: The CAG noted that the FSSAI had failed to constantly monitor and inspect food operators across states. In response, the regulator emphasised that “several state food authorities have conducted surveys of food business activities under their jurisdiction and some states have not been able to do so due to acute shortage of manpower. • Appointing well-trained staff: Allaying the CAG’s staff-shortage concerns, the regulator said it had “finalised the recruitment regulations and asked for a creation of about 600 new posts to strengthen the FSSAI set-up across the country.” The FSSAI is training and building the capacity of lab staff and adding to its small pool of food analysts through a series of examinations. Agro & Food Processing January 2018
CAKE TIME
50
Cake
The Story acceptance
O
n December 25, 1955, newspapers inquisitively reported that Dr Rajendra Prasad, the first President of India, would cut a special, 40-pound Christmas cake that day and slices of the cake and sweets will be distributed among the staff and their children. This was a relatively rare mention, at that time, of a cake in a formal context. It was epic incidents like this that actually popularized cakes in India. Politicians realised that cakes, which could be easily shaped and coloured as desired, could be used to make symbolic statements or carry actual messages in ways that Indian sweets never could. Sharad Pawar was one of the first to do this, with his 61st birthday in 2001 being celebrated with a 61-ft-long cake that weighed 610 kilos. The cake had decorative toppings displaying scenes of from the rural hinterlands where women were shown carrying water-pots, a farmer ferrying a bullock cart, lush fields and a sugar factory”, this was made keeping in mind his rural image. Cutting it allowed for even more camera opportunities and, like prashad, it gave something for all his followers to eat. In 2008, when Mayawati was Chief Minister of Uttar Pradesh, her 52nd birthday was celebrated with a white chocolate cake having the message “Behenji ke 52 janmdivas par hardik badhaiyan.” Her followers and top bureaucrats queued up for pieces. And even Lalu Prasad Yadav had train-shaped cakes during his stint as railway minister. Only just, after the BJP’s victory in Gu-
jarat, a leader in Delhi produced a cake decorated with mushroom images to mock the allegation made in the campaign that PM Narendra Modi ate expensive imported mushrooms. But the PM’s most impressive cake moment came last year when a Surat baker made a sevenfoot-tall, 3,750-kilo cake to celebrate his 66th birthday, setting a Guinness World Record. In 2003, the Eggless Evolution started, as BJP politician Uma Bharti caused a controversy by offering a cake at a Hanuman temple, which led to allegations of desecration because the cake might have used eggs. Bharti insisted that the cake was eggless, and the incident was a reminder of the one image problem cakes still faced. The PM’s birthday cake was, of course, eggless and the creation of such recipes has powered Indian cakes. The revolution of eggless cake may also have American roots. In Span, a magazine produced by the US embassy in India, an American married to an Indian, once wrote about making cakes for her strictly vegetarian in-laws. From an American friend, she found a recipe dating back to World War II when eggs were scarce and alternatives were devised using baking
Agro & Food Processing January 2018
powder and sour milk. Indian versions started by using dahi, then diversified into ingenious solutions using khoya, flaxseeds, guar gum and other stabilizers. Such recipes have helped drive the cake-making market. Many customers in India are Brahmins who are vegetarian, but are interested in baking. Eggless cakes often compensate for the lack of lightness in texture by piling on toppings, and this has increased interest in elaborate decorations. Market size of cake industry Rising consumption, shifting preferences and the emergence of small producers are among the changes transforming organised cake industry. Competition is intensifying in the Rs 2,000-crore organised cake market. Sensing the potential, biscuit majors like Britannia and ITC are focusing more on the segment. The cake market is seeing an exponential growth and lots of small players are entering the fray. The fresh cream cake market has become highly fragmented with several local bakers holding sway in a particular region. Dry cakes with a longer shelf
CAKE TIME
51
ology
of Cake, its and the market has become a regular eating habit among Indians, though cake baking is not, as is evident in the low oven ownership in urban households. Yet we can sink our teeth into a chocolate or vanilla cake. The Indian consumer is spoilt for choice with a wide range packages cakes available in Indian market for desserts and sweets. The Indian cake market is estimated to be a whopping Rs. 300 crore one. life, however, are finding steady demand across India. The unorganised cake market in the country is estimated to be as big as the organised one. Although cashew and cocoa have become dearer, the prices of key ingredients such as flour and sugar have not increased. As a result, retail prices have remained steady. Cake sellers are now selling the product in smaller packets of 300 and 200 gm. Earlier, there was only 1 kg and 500 gm. Manufacturers are more worried about the shortage of workers and mounting labour costs. Consumer preferences have changed with greater demand for value added fresh cream cakes. For instance, many want chocolate cakes with caramel, vanilla, fruits or fresh cream instead of the plain variety. Cake consumption is on the upswing in Indian market with high per-capita consumption is moving more towards premium varieties. Fresh cream cakes have virtually replaced plum cakes with icing. But plain plum cakes filled with dry fruits are still in demand. Dry cakes like plum cakes are preferred for corporate gifting but individuals prefer fresh cream cakes
now. The market for packaged and processed food is steadily growing, especially among urban consumers. However, the overall cake market performance in the recent times has been most influenced by changing consumer trends regarding health and wellness, demand for gourmet products and increased competition in the baked goods genre. Consumers today are more health-aware and diet-driven than previous generations and, as a result, are demanding healthier choices even in their indulgences. The popularity of low-carb diets caused purveyors of cakes to meet the demand by launching numerous “low-carb� versions in the packaged cake category. As diet focus turned towards better general health, Trans fat-free and whole grains variety of packaged cake emerged to cater to the demands. However, there is a need for diet-specific cakes and pies, such as sugar-free or low-fat, which can help consumers who are dieting or have diet restrictions (like diabetes) to satisfy a sweet tooth. If you thought pedas and burfis are our favorites hold your breath, cake eating
Agro & Food Processing January 2018
The market is just right for new range of packaged cake products which must carry the same stamp of quality, integrity and expertise that local bakers have been providing over the ages but in a more modern and convenient format. Home cake baking enters the market Cakes and bakery products are one of the fastest growing food segments — it is growing at a rate of 20-25 per cent annually. Industry players put the size of the market at Rs 850 crore in the organised HoReCa (hotels/ restaurants /catering) segment. The rise of in-store bakeries is another major driver of this market. Health issues in line with the growing concern for obesity and related diseases and regulatory constraints pertaining to product labelling pose a threat to this market. The increase in home baking further reduces the demand for packaged cakes. The increase in online sales and demand for product innovation would further help in market growth in the future. Cake pops - a type of snack is gaining popularity and is available in grocery stores. The idea of customizable cakes is a key factor contributing to the growth of this market.
CAKE TIME
52 Indian consumers, especially millennials are very comfortable with international cuisines and flavours and patronize established brands as much as new bakeries and home bakers. Many home bakers are using flexibility of the business model to monetize their hobby. Kazem Samandari, who moved to Delhi from Paris seven years ago, invested Rs 30 crore in L’Opera, a premium French patisserie and boulangerie chain that has 15 outlets in Delhi NCR. Expansion plans over the next five years include more outlets in NCR and other metros. L’Opera has grown at 15-20 per cent annually and is likely to scale Rs 18 crore sales turnover this fiscal. The market for high-end cakes is certainly growing in Delhi NCR and other metro cities. Indian customers are developing a taste for high-quality French products. Michelle Pike Kalsi, an American expat in Delhi turned bakery entrepreneur with her venture Georgia Dakota, because she and her friends were looking for healthy bakery options. Most cakes in Delhi are full of sugar, refined flours and preservatives. There was a need for a healthier take on the treats we all crave which made Kalsi enter the cake business and has a popular Facebook page. Today she has a shop in Delhi’s Vasant Vihar, an online store and partnerships with many schools and offline and online retailers. Paris-trained patisserie chef Pooja Dhingra set up her first outlet, Le 15 Patisserie in Mumbai, as a tiny kiosk seven years back. Today it has four outlets and a cafe with a team of 70. Many of her corporate clients prefer to send cakes and gift hampers to customers and directors. For Dhingra, innovation and Indianisation is the key. Prem Oommen Koshy, Chairman of the iconic Koshy’s Bakery in Bengaluru, said his family’s traditional products draw even millennials. “We have a traditional recipe for the Christmas cake, but through
the year, our plum cakes are in big demand.” Koshy’s uses traditional methods and local ingredients. For India’s largest flower-gifting chain Ferns N Petals, cakes account for 40 per cent of its online business. It is also focusing to create a robust network of cake retail outlets across India. Its vertical FNP Cakes N More opened in March 2017 and has 30 outlets already operational. The trend of combining cakes with flowers is not a metropolitan fad anymore. Goan florist Lynette Alphonso, who has a two-decade-old shop in Panjim, too spotted the new direction. The trend among individuals and corporates is to gift not just flowers but also include cakes with a lot of customization. While Delhi, Mumbai, Bengaluru, Kochi, Chennai, Hyderabad and Pune are the biggest markets; smaller cities have seen demand grow. Chirag Malik’s great grandfather Fateh Chand Malik set up a bakery in Gwalior in 1958. The Nirankari Bakery has three commercial factories with 30 varieties of cakes and products marketed across towns and villages in Madhya Pradesh. The market for cakes is increasing exponentially and growth in vegetarian and eggless option in cakes has enhanced. History Cake is believed to have originated shortly after the discovery of flour by human beings in the ancient times. The cakes that we read of in the medieval English literature are not cakes as it has come to mean today. Those cakes were simple flour-based sweet foods meant to be distinctly different from breads, which were merely flour-based foods without sweetening. In fact, for long bread and cake
Agro & Food Processing January 2018
were used interchangeably, with the cake meaning smaller breads. The earliest evidence of cakes has been found by archaeologists from the Prehistoric Neolithic sites in the Swiss lake villages. These primitive varieties of cake have been described as nothing but crushed grains, moistened, compacted and cooked on a hot stone. It is very similar to present day oatcakes or biscuit or cookie. Ancient Egypt was the first culture to show evidence of true skill in baking, making many kinds of bread including some sweetened with hone. The Greeks had a form of cheesecake and the Romans developed early versions of fruitcakes with raisins, nuts and other fruits. These ended up in 14th century Britain. One was made with 13 kilograms of flour and contained butter, cream, eggs, spices, currants and honey. The Greeks used the word ‘plakous’ meaning flat to refer to cakes. These cakes were usually combinations of nuts and honey. Another Greek cake that we come across in the culinary history is ‘satura’, which was a flat heavy cake. During the Roman period cake was called placenta. They were also called ‘libum’ by the Romans, and these were primarily used as an offering to the gods. Placenta was more like a cheesecake, baked on a pastry base, or sometimes inside a pastry case. Molds, in the form of cake hoops or pans have been used for forming cakes since at least the mid-17th century. By middle of the 18th century, yeast was used less often, being replaced by beaten eggs as a raising agent. Once as much air as possible had been beaten in, the mixture would be poured into molds, often very elaborate creations, but sometimes as simple as two
CAKE TIME
tin hoops, set on parchment paper on a cookie sheet. It is from these cake hoops that our modern cake pans developed. By the early 19th century, the Industrial Revolution made the cake-baker’s life much easier. The chemical raising agent bicarbonate of soda, introduced in the 1840’s, followed by baking powder ( a dry mixture of bicarbonate of soda with a mild acid), replaced yeast, providing a greater leavening power with less effort. Another breakthrough technology was more accurate temperature controlled ovens. By the mid-19th century the French were including a separate “sweet” course at the end of the meal which might include ‘gateau.’ Trends The Indian Bakery market is estimated to be worth Rs. 16,500 cr, growing at a healthy 7.5 % per annum. It is one of the largest food industries that consist of various product categories like breads, biscuits, pastries, cakes, buns and rusks. These bakery products are fast catching up with the popularity trend as lifestyle of Indians are rapidly changing. The major categories are breads and biscuits, corner-
ing about 82 per cent of the Indian Bakery market. Cakes and Pastries segment is estimated to be worth Rs. 1,250 cr of which significant 65 per cent is accounted for by the unorganized sector. The global cakes market is segmented on the basis of product type, mixing methods, sales channels, and geography. By product type, the market is segmented into decorated cake, cupcake, dessert cake, pound cake, cheesecake, ice cream cake, snack cake, wedding cake and others. Decorated cake and dessert cake together account for majority of market demand globally. The major type of cakes as per mixing methods are shortened cakes, layer cakes, pound cake, foam and sponge cakes, flourless or low-flour cakes, angel food cake, biscuit, and chiffon cake. By sales, the market is divided into industrial/packaged cakes, artisanal cakes, and in-store bakeries. The report discusses the market revenue in terms of distribution channels such as online sales, convenience stores, supermarkets and hypermarkets, etc. The global cakes market has been geographically segmented into North Amer-
53 ica, Europe, South America, Africa, and Asia-Pacific. In 2015, Europe dominated the market with more than 60 per cent market share in terms of revenue. The reason for this is the presence of many established artisanal baked good makers. In India, the cake market is seeing an exponential growth due to the increase in urbanization. However, the overall cake market performance in recent times has been most influenced by changing consumer trends regarding health and wellness, demand for gourmet products and increased competition in the baked goods genre. Consumers today are more health and diet-driven than previous generations and, as a result, are demanding healthier choices even in their indulgences. The popularity of low-carb diets caused purveyors of cakes to meet the demand by launching numerous “low-carb” versions in the packaged cake category. As diet focus turned toward better general health, trans fat-free and whole grains variety of packaged cake emerged to cater to the demands. However, there is a need for diet-specific cakes and pies, such as sugar-free or low-fat, which can help consumers who are dieting or have diet restrictions (like diabetes) to satisfy a sweet tooth.
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Agro & Food Processing January 2018
REPORT
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FSSAI responds to the CAG Report Assures citizens that they can trust food they get
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esponding to performance audit report by the CAG tabled in the Parliament on 19th December, 2017, FSSAI assures citizens that they can trust food they get. FSSAI is confident that the country’s food safety ecosystem is well on the way to become more robust and globally benchmarked in the years to come. Food Testing In its report, CAG has raised concerns regarding lack of equipment, shortage of manpower and absence of accreditation of the state food laboratories in the country. Accepting the reality, FSSAI pointed out that it has been working over the past couple of years to ensure that the state food laboratories and referral laboratories are fully equipped and functional. Central government is making an investment of Rs.480 crore for strengthening of the state food laboratories and referral laboratories. For training and capacity building of lab staff, over 24 training programs have been conducted the last year alone, some of which were with international experts to bring in best global practices. 64 Master Trainers have been created in a cascade approach, who in turn would train hundreds of more lab personnel, and 300 persons have been trained in Good Food Lab Practices in just one year. Further, handholding support is being given to states to support them in getting NABL accreditation. 23 labs across 22 states /UTs are being funded for upgradation which will lead to NABL accreditation eventually, and over 140 lab staff have been trained in NABL accreditation processes. Overall 45 labs across States/ UTs would be supported. The number notified private labs have increased from 82 to 152 as of now. It is proposed to provide for 62 mobile food testing laboratories across all States/ UTs. As of now, 19 mobile food testing labs have already been made available to States/ UTs. To increase the pool of food analysts in the country, in an intensive drive, 3 sets of exams have been conducted in the past year and 204 Food Analysts have been notified out of a
pool of thousands of applicants; the 4th exam is being conducted in January 2018 to further enhance this pool. A policy for selecting and training Junior Analysts through a Fellowship program is also on the anvil in partnership with NIFTEM. INFoLNET is a holistic lab network and management system where information is available from all labs in a central database; samples can be tracked and information on testing and technical strengths of labs is available. As of now, 170 out of 242 laboratories have been registered on INFoLNeT.
notified 4 principal regulations; 7 new regulations which are at various stages of finalization; and 59 amendments to various regulations since 2015. FSSAI has put in place a robust system comprising of 17 Scientific Panels and a Scientific Committee for review and establishment of science-based standards. In order to address concerns of food businesses and get structured inputs on formulation of standards, Standards Review Groups have been set up with members from Industry Associations.
It also needs to be clarified that as per section
98 of the Food Safety and Standards Act 2006, tests done by state laboratories that were inherited by FSSAI from Prevention of Food Adulteration (PFA) era are all valid under the transition provisions. Formulation of Standards and Notification of Regulations Recent years have also witnessed rapid progress in developing new regulations and food standards. FSSAI has notified nearly 9000 provisions for use of around 400 food additives in various food categories, several of which address the majority of issues related to product approval after the discontinuation of the product approval system. These include interalia Regulations on Health Supplements and Nutraceuticals, Approval for Non-Specified Food and Food Ingredients Regulations and Import Regulations. Majority of Directions issued under section 16(5) of the Act have been brought into the fold of regulations. Such directions are normally issued to expedite the notification of regulations on areas that have been specified in the Act, but are yet uncovered. FSSAI has
Agro & Food Processing January 2018
This is only an input, which is then considered by Scientific Panels and Scientific Committee and the Authority. Structured inputs are also taken through consumer groups and organizations in setting standards. Product Approvals The system of Product Approvals was suspended on directions of Supreme Court on the ground that it was carried out on strength of advisories by FSSAI and not under regulations. It needs to be clarified that fresh Product Approvals were suspended immediately on the receipt of orders of Supreme Court. In case of product approvals already granted, a risk assessment had been duly carried out as per usual practice, and since the orders of Court were based on procesural rather than safety issues, no action was required to be taken on these cases. Further, it must be noted that provisional PNOCs on product approval given for one year have all lapsed. Therefore, there is no need to withdraw such product approvals. Now, necessary regulations have been framed for Product Approvals not specifically covered under existing regulations. Food Safety Compliance and Enforcement Several state food authorities have conducted surveys of food business activities under their jurisdiction and some states have not been able to do so due to acute shortage of manpower. In such cases, limited staff is optimally utilized in effective enforcement and putting pressure on businesses to adhere to food safety and obtain licences and registrations.
REPORT
FSSAI conducts annual, periodical and geographical area based surveillance activities for effective implementation of the Food Safety and Standards Act, 2006 and Rules and Regulations made thereunder. During the current year, Milk Survey is being undertaken. In the area of Licensing, FSSAI is simplifying processes for licensing and registrations by rationalising and reducing the documents that are required to be submitted. The focus is to ensure more effective enforcement and administration of the FSS Act. FSSAI has developed mechanisms for risk based inspections and shared the same with States. However, several states do not have adequate manpower to conduct as many inspections as they should, for want of manpower. Web Based Inspection System (FoSCoRIS) Further, FSSAI has developed a web-based Inspection System FoSCoRIS (Food Safety and Compliance through Regular Inspections and Sampling) based on Standardised Checklist for inspections of food businesses by Food Safety Officers in the field. The web-based FoSCoRIS system will help verify compliance of food safety and hygiene standards by food businesses. FoSCoRIS guarantees uniformity, transparency and enables Food Safety Authorities to monitor it digitally. Coordination Mechanism on Food Regulatory Ecosystem to facilitate Investment and Trade FSSAI has established a robust procedure for information sharing and coordination with customs and other agencies for food regulatory matters which would ultimately facilitate investment and trade. There will be an institutional mechanism comprising of all the relevant ministries/ departments and other agencies which would deliberate on issues such as: coordination in standards setting and quality benchmarking; coordination in regulatory compliance and inspections to reduce regulatory burden on food businesses; coordination in food testing to ensure credibility including issues relating to recognition of labs outside India; and resolve differences among agencies; take up joint initiatives in the above areas for further facilitation of investment and trade. One Nation One Food Law FSSAI has launched the Food Regulatory Portal which will act as a single interface for food businesses to cater to both domestic operations
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and food imports. Further, strengthening government’s vision for ease of doing business in India, FSSAI has launched ‘One Nation One Food Law’ initiatives for all state level food authorities. The ‘One Nation One Food Law’ would ensure consistency and predictability of business environment and enable state food authority to standardized their method of testing, surveillance and implementation of food safety regulation across the country through the help of the Food Regulatory Portal. Recruitment Regulations FSSAI has finalized the Recruitment Regulations and asked for creations of about 600 new posts to strengthen FSSAI set up across the country. About 200 these posts are for essential functions of food safety, inspection and enforcement that were not considered at the initial creation of posts. These functions were also identified essential during performance audit by C&AG. 48 posts proposed are for IT Division, a function earlier
outsourced and now being carried out internally. About 40 posts are for social and behavioral change, training and capacity building that require special skill in media, communication, curriculum development, pedagogy and consumer outreach. General FSSAI appreciates the inputs from CAG to improve performance of food safety. CAG report should however be seen in the context of the huge and complex task at hand and the fact that FSSAI is now an evolving organization and it faces severe constraints of manpower and resources. It would have been useful if the report had noted a lot of very useful work done by the FSSAI over years that has helped to raise the profile of food safety in the country significantly in recent years. Nevertheless, FSSAI continues to be committed to raise the bar for food safety and hygiene in the country so that citizens can trust food they get in the marketplace.
Month
Issue
February 2018
Event Focus
Exhibition Name Methai & Namkeen Seminar (10th February 2018) New Delhi
Gulf Food Dubai (18th-22nd February 2018) Dubai
Acrex India (22nd-24th February 2018) BIEC Bangalore
March 2018
Event Focus
Aahaar (10th-14th March 2018) New Delhi India
Packplus South (9th -12th March 2018) Hyderabad
ANUGA FOODTEC (20th -23rd March 2018) Cologne, Germany
July 2018
Event Focus
September 2018
Event Focus
Packplus (25th-28th July 2018) New Delhi FI India (11thSeptember2018) New Delhi
Interna�onal Foodtech (27th-29th September 2018) Mumbai
AnnaPoorna (27th-29th September 2018) Mumbai
October 2018
Event Focus
Indian Ice Cream Congress & Expo (8th-9th October 2018) Chennai Trade Center
Drink Technology (24th-26th October 2018) Mumbai
November 2018
Agro & Food Processing January 2018
Event Focus
Gulfood Manufacturing (8th-November 2018) Dubai
NEWS
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India is second largest producer of horticultural crops and fruits of fruit is significant.
R
esearch and development projects in horticulture crops have yielded results that have led to increased rate of horticulture crops production irrespective of adverse climatic conditions. Union Agriculture and Farmers Welfare Minister Radha Mohan Singh attended the World Orange Day 2017 event in Nagpur. India is the second largest producer of horticultural crops and fruits, after China. More than 9 crore metric tons of fruits on 63 lakhs hectare land were produced during 2015-16. As per estimates, a production of 30 crore metric ton horticulture crops on 2.5 crore hectare land is expected during 2016-17 in which contribution
The record achievement includes 42 million ton of fruit production on 65 lakh hectare land. In terms of area in India, the citrus fruits hold second position (10.37 lakh hectare) and third (12 million tonnes) in production. The Agriculture Minister said the Ministry is implementing Mission for Integrated Development of Horticulture across the nation. The School of Horticultural Sciences department of Indian Council of Agricultural Research (ICAR), along with its 23 institutes, 11 All India Coordinated Research projects and 2 All India Network projects are providing necessary technical cooperation and scientific research assistance to the horticulture mission. Singh said that government established a Central Citrus Research Institute (CCRI) in Nagpur in 1985 with an objective to develop research and necessary techniques for citrus fruits and in 1986 it was upgraded to National Research Centre for
Citrus. In 2014, the present central government upgraded this centre to the central institute. A sub-centre of the CCRI was established 42.4-acre land in 2017 in Biswanath Chariali in Biswanath district of Assam with an objective to accelerate the research and development work on citrus fruits in North Eastern states of the country. ICAR is implementing All India Coordinated Fruits Crop Research Project in 10 centres of 8 states namely Maharashtra, Punjab, Tamil Nadu, Rajasthan, Assam, Andhra Pradesh, Arunachal Pradesh and Karnataka. The needs of the specific area, necessary research, technical training, and demonstration are being carried out on citrus fruits. In the last 4 years, the government has allocated a sum of Rs.23 crore for these centres. Singh added that many schemes are being implemented for the integrated development of horticultural crops like informing farmers of advanced production techniques, promoting the processing and marketing of products to promote the export. For this, 2 clusters will be developed in Amravati and Nagpur.
ASSOCHAM: Govt. must give top priority to agriculture in budget
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he year-to-year agriculture GVA (Gross Value Addition) growth for July-September quarter of 201718 has fallen to 1.7 per cent from 4.1 per cent, measured on basic prices, the drop looks sharp at current prices from 10 per cent to 3.7 per cent. ASSOCHAM said the government should give top priority to agriculture in the budget as a major shortfall in kharif production resulted in sluggish growth of farm sector in the second quarter this fiscal. The industry body observed that the shortfall in the second leg of the monsoon seems to have impacted the Kharif production. “Besides, distress in prices of several agri-commodities would have
also played a role in lower realisations as seen in the growth deceleration on the current prices,” it said. ASSOCHAM Secretary General D S Rawat said since more than half of the GVA in the farm sector is contributed by livestock, fishery and forestry, FM Arun Jaitley should particularly focus on these segments of the economy along with a major thrust on agriculture infrastructure like irrigation. “With bulk of our population employed in the rural landscape, India’s consumption led growth and investment cannot be realised unless the entire farm sector is pulled out of stress. Major part of India Inc is heavily dependent on rural demand which would remain subdued if immediate steps are not taken in
Agro & Food Processing January 2018
the short term and medium term.” Farmers must be extended all help in the ongoing Rabi season and it must be ensured that adequate protection is given to them if market distortions creep in to their disadvantage. “Timing is very important in agriculture and steps like import duty or export measures must be initiated well in time so that the benefits reach the farmers and are not pocketed by the intermediaries,” it said. As per ASSOCHAM, rural oriented companies in fertiliser, seeds, farm equipment, two-wheelers, FMCG, food processing would be vulnerable if the agriculture sector does not perform as well as other sectors.
NEWS
57
LT Foods to expand geographical foot prints and invest $20 mn for branding, expansion
L
eading basmati rice firm LT Foods is extensively working to expand their geographical footprint and product portfolio and will invest $20 million for branding and expansion in Europe, as it eyes a six times increase in sales from the branded segment over the next four years. The company plans increase its sales from the current 5,000 tonnes to 30,000 tonnes.
LT Foods which sells basmati rice under Daawat brand, has been focusing on Europe as the next growth region and has recently opened a new plant in Rotterdam, Netherlands to cater to both Europe and UK. According to LT Foods Chairman Vijay Kumar Arora, in the next two years, they look to gain 5 per cent market share in the
branded segment of this region with distribution expansion and continuous brand investments. This will help to take the growth to the next level and achieve the aspired targets. It will also introduce new packaging across all its Daawat rice variants for a fresh shelf presence by March 2018 in the region.
Need to push agro processing to hike production: FM
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inance Minister Arun Jaitley began the pre-Budget consultations with stakeholders in the first meeting with representatives of different agriculture groups. There is a need to conserve water, incentivise agro processing and promote balanced use of fertilizers in order to ensure higher agriculture productivity.
cy’ and Budget 2018-19 is an opportunity to shift to ‘Farmers’ Policy’. There is a need to reduce pressure on the land by creating off-farm jobs. To ensure the delivery of remunerative prices to farmers, the ‘Price Deficiency Payment Mechanism’ must be implemented immediately for those crops where procurement cannot be ensured.
Jaitley said in order to achieve the goal of doubling the farmers’ income by 2022, there is a need for better storage and marketing facilities for the farmers’ produce so that they get better prices. India has constantly pursued ‘Food Poli-
It was suggested to double the number of farmers receiving loans up to Rs 2 lakh at the interest rate of 1 per cent only and link Aadhaar to such loan accounts to avoid duplication and also greater emphasis on agro forestry for income generation.
Other suggestions included creation of a small group of 5-6 experts who can monitor on monthly basis the agriculture production data of different crops and global market conditions or to do advance planning rather than the government reacting suddenly to an adverse situation. Also there is a need to conserve water, balanced use of fertilisers to ensure higher agriculture productivity. The Centre should declare an ‘Agriculture Debt Relief Package’ for the entire country which is used with matching contributions from the state governments.
Dubai will soon enjoy UP veggies This move aims to support entrepreneurs boost export of fresh vegetables from eastern Uttar Pradesh and other states. APEDA, an organisation under the Ministry of Commerce & Industry is responsible for promotion and development of export of various agro products.
T
o encourage manufacturers to enhance production and sent their products on international shores, Agri export body APEDA organised the first trial shipment of green chillies from Varanasi to Dubai.
Eastern Uttar Pradesh is one of the potential areas for export of fresh fruits and vegetables, such as green chillies, okra, bitter guard, green peas, brinjal and mango and guava etc. “Despite the potential of fresh produce in Uttar Pradesh, exports are not taking place due to logistic constraints,” the
Agro & Food Processing January 2018
Commerce Ministry said in a statement. The Agricultural and Processed Food Exports Development Authority (APEDA) has sensitised exporters to source produce from Uttar Pradesh. “As an outcome of this effort, one exporter has agreed to export green chillies and green peas from Varanasi to Dubai. Necessary tie up with importers has also been facilitated by APEDA,” the statement said. Through the efforts of APEDA, facilities of custom clearance and phyto-sanitary certificate issuance at Lal Bahadur Shastri International Airport, Varanasi are being set up to facilitate exporters from the region. SpiceJet has also come forward to ease trade from Varanasi by sending the consignment via Delhi.
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RNI No. MAHAENG/2005/15987 POSTAL NO. THW/50/2017-2019