Oil & Food Journal August 2016

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Vol 11 Issue 10 August 2016

Food Agrprocessing

100/-

Indian’s 1st News Portal for Agro, Food Processing & Allied Segments

11th

Volume

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FOOD LOSS !

A BIG CHALLENGE

FOR MODI GOVERNMENT

GST:

How Does It Affect

the Food Industry?

CELEBRATE THE INTERNATIONAL YEAR OF PULSES 2016 New FDI

reforms to improve

the Indian food processing industry

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India’s vegetable oil imports may rise to record 15 million

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Edible oil refiners seek duty cut on raw materials

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Centre asked states to remove taxes on essential food items Pulses from Myanmar to fill demand and supply gap

Wildly ineffective urgent makeover

Youth shifting towards healthy and nutritious snacking: Survey Artificial dyes still in many products for kids Consumers are willing to pay more on natural ingredients: Research Changed norms will help to establish more food parks: Minister

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KoPT to start commercial transloading from September with SAIL

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Rajasthan attempt to make India self reliant in edible olive oil

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Fall in Palm oil import continues

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Emami Agrotech to invest Rs. 300 Cr in Haldia

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A.P government to stop incentives edible oil refiners at ports

CELEBRATE THE INTERNATIONAL YEAR OF PULSES 2016

The tale of fall & rise of Maggi noodles in India

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FOOD LOSS !

A BIG CHALLENGE FOR MODI GOVERNMENT 26

food date labelling system needs 45

GST- How Does It Affect the Food ndustry?

IT in the food and beverage industries

Bengal’s government new scheme for farmers

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New FDI reforms to improve the Indian food processing industry

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EDITOR Manzar Aftab Naqvi CONSULTING EDITOR Basma Hussain GROUP EDITOR Firoz H. Naqvi firoz@advanceinfomedia.com Graphic Designer Naved H. Kazmi naved@advanceinfomedia.com Circulation Seema Hayat Shaikh Seema@advenceiifomedia.com Delhi Sayyed Shahnawaz +91-8375034558 Gujarat Brijesh Mathuria +91-9924546999 Genreal Manager Gyanendra Trivedi Marketing & Circulation Office 121,1st floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist. Thane- 401107 Telefax : +91-22-28555069, Tell.: +91-22-28115068 Mob.: +91-9867992299 E-mail: info@agronfoodprocessing.com sub@advanceinfomedia.com Vol 11 Issue 11 August 2016 Annual Subcription Rs.950/By Normal Post Add Rs. 400/-For Courier Charges Add Rs. 50/- For Outstantion Charge Overseas $80 By Air Mail Email:sub@advanveinfomedia.com Single Copy Cost Rs. 100/Printed, Published & Owned By Manzar Aftab Naqvi RNI No. MAHENG /2005/15987 Postal Regd. No. THW /50/2014-2016 WPP License No. MR /TECH /WPP-308/TW /2016 Regd. Office Advance Info Media & Event 103,AmarJyot Apartments, Pooja Nagar, Mira Road (E) Dist Thane-401107(Mumbai) Printed At Rolleract Press Services A-83,Ground Floor, Naraina Industrial Area Phase-1, New Delhi -110028 The views expressed in this issue are those of the contibutors are not necessarilly those of the magzine. though every care has been taken to ensure the accuaracy and authenticty in infomation, "Oil & Food Journal" is however not responsible fordamages caused by ministerpretation of infomation expressed and implied with in the pages of this issue.

All disputes are not to be referred to Mumbai Jurisdiction

EDTIORIAL

he GST rollout across the country will improve ease of doing business and encourage industries to expand their operations, which in turn will help boost job opportunities. The Make in India initiative will get a significant boost as companies would be able to create manufacturing and industrial hubs across the country as GST would break the barrier of state tax regulations.

Though as apart of the food industry, I am a bit skeptical about the GST bill but still hoping that its implementation will help improve ease of doing business and India's GDP and India's growth will continue to expand its economy and create opportunities for its workforce.

Talking of GST effect? Walmart is keen to invest in food processing sector in India after 100% FDI rule and GST execution, and one of Brazil's largest poultry firms is also learnt to be in talks with Kishore Biyani's Future Group to set up shop in the country.

But even as Prime Minister Narendra Modi is promoting 'Make in India' and actively seeking foreign investments, Yoga guru Baba Ramdev is openly attacking multinationals, calling their products not good for people in the country.

Though MNCs are terming the campaign a marketing gimmick, but they can't entirely ignore it either, as Ramdev's consumer Products Empire is rapidly growing and challenging their bottom lines. And at stake is a piece of the $40 billion processed food industry, growing annually at 11 percent per year. Stakeholders hope the government will eventually crack down on the "misleading" advertisements of the Baba Ramdevled Patanjali.

Talking of Multinationals, Nestlé’s Maggi noodles is back on the ruling the chart, this is a miraculous achievement after the huge set back and a humongous scandal that Maggi had faced last year on safety issue. Maggi noodles were entangled in a web of distrust and months of judiciary fights. However, presently Nestlé India beloved instant noodle brand has reclaimed its market-leading position and more than 50% market share in India’s noodle market.

Riding high at the moment, Maggi Noodles has re-launched its cup noodles, and has added two new variants to the Maggi Noodles portfolio -- 'Maggi Hot Heads' and 'Maggi No Onion No Garlic Masala'.

Emerging further ahead, Nestle has ventured into the ready-to-cook children's breakfast cereal category with the launch of Ceregrow. India's breakfast cereal market is growing in excess of 22% over the last five years. Significant players in the category with threefourths share include Kellogg's, Bagrry and PepsiCo. Coca-Cola India's bottling arm Hindustan Coca-Cola Beverages (HCCB) has halted operations at one of its biggest plants located in Dasna, Uttar Pradesh, as the mandatory 'consent to operate' has been withheld by the Uttar Pradesh Pollution Control Board.

Earlier this year, the beverage maker suspended manufacturing at three plants across Rajasthan Andhra Pradesh and Meghalaya, citing consolidation of operations and absence of long-term economic viability as the reasons.

In an attempt to bring in health conscious consumers amid slowing sales, McDonald’s, the world's largest fast food chain, is junking artificial preservatives across its products in India besides further reducing sodium in its mayonnaise and fries, and calories in sauces. Globally, the firm said it is removing antibiotics from chicken; it has started the process in India. Its suppliers are now allowed to administer government-approved antibiotics only for treating sick chicken.

In fact, in India, people are eating out less and almost all quick service restaurant chains including Yum! Restaurants-operated KFC and Pizza Hut, and Jubilant Food Works-run Domino's, have been posting low to mid single digit same-store sales.

Finally coming to an important issue, after a grand success in Bangalore last year, Indian Ice-cream Congress (IICE) is going to be held at Expo Center, Sector 62, NH24 Noida on 28 and 29 September 2016. The India’s biggest ice cream show is entering its 6th year and will provide hundreds of ice cream manufacturers bot globally and locally to exchange their views on this platform.

IICE 2016 is anticipated be quite awe-inspiring this time and of course much majestic.

All Manufacturers, dealers, businessmen, companies related to the ice cream sector, this is the much opportunité.

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PULSES YEAR

CELEBRATE THE INTERNATIONAL YEAR OF PULSES 2016

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any of the benefits of pulses in diversifying diets and replenishing soil nutrients are well documented and understood. What has received less attention is the role of pulses in contributing to future food security and development goals.

Through its resolution 68/231 of December 21, 2013, United Nation

General Assembly (UNGA) declared 2016 the International Year of Pulses (IYP) and nominated the FAO to facilitate implementation of the year in collaboration with all relevant stakeholders.

The specific objectives of IYP 2016 are to: raise awareness about the important role of pulses in sustainable food production

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and healthy diets and their contribution to food security and nutrition; promote the value and utilization of pulses throughout the food system, their benefits for soil fertility and climate change and for combating malnutrition; and encourage connections throughout the food chain to further the global production of pulses, foster enhanced research, better utilize crop rotations and address the challenges

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PULSES YEAR For both large and small farmers, pulses represent important economic opportunities to boost income and reduce risk by diversifying their crop and income stream portfolio.

The environmental benefits of adding pulses to crop rotations is well documented, however there is less documentation and evidence of the social and economic benefits of pulse production.

Pulses could help address future needs for protein, help minimize soil degradation, and support diversification in food production and consumption.

The livelihood and development impacts of increased pulse production and consumption must be better understood by the food sector, by pulse producers, and by governments, based on empirical evidence and known examples in both developed and developing countries.

in the trade of pulses.

Officially launched on 10 November 2015, and coordinated by the Food and Agriculture Organization of the UN (FAO), the year-long celebrations will include 10 ‘Signature Events' around the world, the launch of a global pulses database, and commemoration of World Soil Day 2016 on the theme ‘Soils and pulses: symbiosis for life.'

Our food systems face the challenge of needing to produce enough food to feed at least 9 billion people by 2050, with nearly all that additional food needed for developing countries and due to per capita increases in meat consumption (FAO, 2009; Foresight, 2011).

But that challenge must be met in the context of increasing climate change impacts on food production; competition for energy, land, water and material resources; population growth and migration; poverty and food insecurity; and ecosystem degradation.

Climate change, resource depletion, and demographics have a strong impact on the availability and price of agricultural

commodities. Growing urban populations are increasingly purchasing their food rather than growing it, with substantial proportions of household expenditure going towards food.

In South Asia and sub-Saharan Africa, 40–70% of all household expenditure is on food (World Bank and IMF, 2013).

Increased urbanization means 96% of the developing world’s additional 1.4 billion people by 2030 are expected to live in urban areas. Further, the global middle class is predicted to grow 172% between 2010 and 2030, and while agribusinesses will seek to serve this new middle class market, it will be at a time when resources are likely to be scarcer and more pricevolatile.

The potential of pulses—beans, peas, chickpeas, lentils, and other pulse crops to help address future global food security, nutrition and environmental sustainability needs has been acknowledged through the UN declaration of the 2016 International Year of Pulses. However, the full set of benefits that pulse crops can offer has not been systematically characterised.

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An important goal in the sustainable use of land worldwide is to increase productivity on available croplands, while restricting agricultural expansion, which often occurs at the expense of forests and wetlands. Nine billion people will inhabit the planet by 2050.

To avoid crop expansion and just meet projected 2050 crop needs by increasing production, it is predicted that crop yields would need to increase by an estimated 32% more from 2006 to 2050 than they did from 1962 to 2006 during the height of the ‘green revolution.’

However, reaching such increases in yields is highly unlikely. Pulses have a significant role to play in ‘sustainable intensification,’ yet, in developing countries, production increases have come primarily from expansion of cropping areas. The yield growth of pulses between 1980 and 2004 in developed countries was 2% per annum, while in developing countries, it languished at about 0.4% per annum. Ethiopia’s rise in chickpea production offers an example of productivity improvements that did not result in area expansion.

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PULSES YEAR increased.

Pulses have declined in consumption levels globally and in particular among developing countries, perhaps best illustrated by China’s significant decrease in consumption, from 30 g per capita per day in 1963, to only 3 g per capita by 2003.

Over the last decade, developing countries, particularly in large Asian economies, have seen steady population growth, rising per capita incomes and continuous urbanization, which has been accompanied by increased protein intake relative to the traditional starches.

On February 24, the International Center for Agriculture Research in the Dry Areas (ICARDA), part of the CGIAR Consortium, launched its Global Pulses Research Platform in partnership with the Indian Council of Agricultural Research (ICAR) and the Government of India.

A key objective of the platform is to promote and expand the cropping of lentils in rice fallows – an approach to intensifying crop production while enabling sustainable cropping systems.

Approximately 11.7 million hectares were left fallow for period of time in 2015, constituting over a fourth of India's total rice area, and researchers estimate that at least three million hectares of this total area can be converted to pulse production. In November 2016, research organizations involved in the project will convene an international conference on nutritional security and agricultural sustainability in New Delhi, India, that will serve as the signature IYP 2016 event for the South Asian region.

Reduced greenhouse gas emissions The role of pulse crops in mitigating greenhouse gas emissions in agriculture production can be significant, and this is explored further in the Saskatchewan

case study below.

The primary reason for the benefits from pulses in lowering GHG emissions is due to lower fertilizer requirements, particularly given the large amount of energy used in fertilizer production.

Up to 70% of the non-renewable energy used in Western Canadian cropping systems is due to the use of fertilizers, particularly nitrogen, and the inclusion of pulses in cropping systems reduces the need for fertilizer inputs. Pulses supply their own nitrogen and contribute nitrogen to succeeding crops. This is explored in greater detail in Section.

Social benefits Nutrition Without a concerted effort to boost the production of pulses in developing countries, consumption of pulses may stagnate or decline, due to changing consumer preferences, failure to promote production of pulses, and a greater focus on increasing production and self-sufficiency in cereals.

Historically, when observed declines in protein-rich pulses were not accompanied by increases in the consumption of livestock products, the result has been deterioration in the overall quality of diets, even if per capita dietary energy

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The OECD/FAO Agricultural Outlook to 2024 indicates stagnant growth in food consumption in developed countries, but significant increases in developing countries, reflecting this increase in protein intake in developing countries.

At the global level, total caloric intake is expected to rise, but with regional differences.

Cereals will remain the most consumed agricultural product, with consumption expected to increase by almost 390 Mt by 2024, most of which is coarse grains.

The largest expected growth in coarse gain consumption will come from demand for feed, accounting for 70% of the growth in consumption. Global meat consumption is expected to grow 1.4% per year, resulting in additional consumption of 51 Mt of meat by 2024.

India provides a counterpoint to China, as pulses there provide an increasing source of protein, now accounting for almost 13% of overall protein intake.

Pulses are an important contribution to a vegetarian diet, given their protein content. India is the largest pulse producer and consumer, and the country grows the largest varieties of pulses in the world, accounting for about 32% of the area and 26% of world production.

Indian pulse crops include chickpea, pigeonpea, urd bean, mung bean, lentil

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PULSES YEAR microbiome in the gut is increasingly being understood, particularly in among children in Malawi where findings indicate cowpea and common bean can reduce environmental enteric dysfunction (Manary, 2015).

Nitrogen and protein in global diets More dietary protein will be needed to eliminate disparities in diets between developed and developing economies.

However, the nitrogen budget in global food and feed demonstrates the importance of nitrogen-rich and proteinrich plant foods.

and field pea, and production reached a record level of 18.4 Mt in 2012-13, up from 15 Mt in 2007-08.

Pulse crop yields have increased from 0.63 t/ha in 2007-08 to 0.79 t/ha in 201213, and annual yield growth is expected to outpace growth in production area, indicating better production efficiency.

However, the average productivity of pulses in India still remains below the global average.

It is expected that Indian production will not keep pace with demand and imports are anticipated to grow to 5.1 Mt by 2023.

Pulses have a role to play in combating cardiovascular disease and increasing healthy nutrition.

Worldwide, cardiovascular diseases are now the leading cause of death, and in the United States, are attributed to 1/3 of all deaths. While there is increasing awareness of this risk, and the role of balanced diets to decrease the risk, less than 1/3 18 of Americans consumes the 3 cups of legumes recommended per week by the Dietary Guidelines for Americans.

very low-density lipoprotein (VLDL), and triglycerides.

Findings indicate the non-soy legume diet had a significant beneficial effect on serum cholesterol levels, thus reducing cardiovascular disease risk.

Both total and LDL cholesterol decreased, while HDL cholesterol did not change significantly, when non-soy legumes were supplemented. Further, findings indicate that the non-soy legume diet allowed for higher intakes of dietary total and soluble fiber (which lowers risk of coronary heart disease) and contained phytosterols, a component of plant cell membranes, which reduces blood cholesterol levels (ibid).

The anti-inflammatory effects of beans and their contribution to the intestinal

A meta-analysis of ten randomized controlled trials from 5 countries sought to quantify the impact that consumption of non-soy legumes (navy, pinto, kidney, garbanzo and lima beans and peas such as split green peas or lentils) has on total cholesterol, high-density lipoprotein (HDL), low density lipoprotein (LDL),

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About 70% of nitrogen in harvested food crops become available (after processing and losses) for human consumption, whereas meat and dairy production use large amounts of nitrogen. Nearly 7 kg of feed nitrogen is needed to produce 1 kg of edible nitrogen in meat, eggs, and dairy products.

Thus, finding solutions to more efficient production of animal foods and damping the projected upward trend line of animal based foods is crucial to supply adequate nutrition to the world’s growing population without any massive increases of nitrogen inputs (Smil, 2002).

In Canada, the US, and Europe, researchers, ingredient companies and food manufacturers are investigating increased production and use of pulse protein fractions in manufactured food products, in order to boost the nutritional quality of foods, and dietary fibre and

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PULSES YEAR the cereal crops for nutrients and thereby produce less forage.

Research outcomes indicate that a) it is possible to add an additional crop into a traditional farming system without affecting existing food security, b) that feeding forage legumes to cattle during the late dry or early wet season resulted in increases in livestock weight, and c) that nitrogen provided by legumes improved maize production in subsequent crops.

starch, which can be used for food fortification and texture enhancement.

In these processes, parts are derived from the whole seed, such as a split seed, hull or fibre, down to isolated starch and protein factions. These products are promoted as plant-based, sustainable, non-genetically modified and gluten-free.

Four companies such as Ingredion, AGT Foods, Burcon, Cosucra, and Nutri-Pea and others are creating fraction products, and finding ways to incorporate them into manufactured food products.

Researchers note that wet fractionation uses large amounts of water and energy, and the functionality of the protein is compromised during processing.

Dry fractionation is found to be more water and energy efficient, and retains functionality of the pulse protein (Schutyser and van der Goot, 2015).

Efforts to manufacture meat-like protein products is improving, with a recent soy-based meat analogue product being produced, with a thickness of 30 mm (Krintiras et al, 2016).

Efforts are underway to further identify how pea protein and other vegetable fibers can be used for this purpose.

Balancing livestock production and food security through pulses Livestock production benefits without food security conflicts are demonstrated

via the integration of herbaceous legumes into the maize and upland rice systems in West Timor, Indonesia. After six years of participatory research, findings indicate significant benefits for local farmers.

Farmers usually rely on low-quality native forages, sometimes supplemented, to feed their livestock.

High rainfall levels in the monsoon season and climate variability provides risks that often result in feed demands outstripping supply and low rates of production, with up to 60% of the weight gained by livestock during the wet season lost during the late dry and early wet seasons.

Herbaceous legumes were added either in annual rotation with a cereal or after wetseason cereal production has been completed, when land is traditionally left fallow.

As cowpea, peanut, and mungbean are already occasionally intercropped with maize in the wet season, researchers chose to promote herbaceous legumes as a green manure or in rotation, and so legumes would not further compete with

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Critical to the success of integrating herbaceous legumes into an annual crop cycle was the recognition that water remaining in the soil as the main wetseason cereal crop matures is a resource that can be available for the subsequent dry-season production of herbaceous legumes, which is a period in which food crops are not traditionally grown (Nulik et al, 2013).

Economic benefits Farmers in grain and oilseed production have found economic benefits from lower input costs and increased profits by including a pulse crop in their rotation.

These benefits 20 accrue mainly through enhancing the efficiency of nitrogen fertilizer use, reducing tillage and, in some cases reducing pesticide use.

Reduced and altered tillage practices reduce reliance on fossil fuels and lowers overall fuel bills. No-till systems with pulses provide a basis for sustainable agricultural intensification, including integrated crop approaches. It is estimated that farmers save between 3040% of time, labour and fossil fuels using no-till, compared to conventional tillage (FAO, 2001; Lorenzatti, 2006).

In Argentina, a review of

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PULSES YEAR reforms sought to remove import restrictions and lower tariffs on agricultural products.

However, with the exception of Basmati rice and durum wheat, external trade in all major crops was regulated, and imports of most crops occurred only through government agencies.

Pulses were treated differently, with import tariffs on pulses reduced gradually and abolished by 1996. The hope that domestic pulse market liberalization would increase imports did not materialize.

farmer practices found that with one liter of fuel it is possible to produce 50 kg of grain under conventional tillage, whereas under no-till it is possible to yield 123 kg of grain (Lorenzatti, 2006).

Better nitrogen management requires less fertilizer inputs.

There are variations, of course, in the economic returns experienced in different geographies and farm-types, and these are explored further in the case studies.

Farmers likely also see the long-term economic benefits (and avoided costs) of less soil, air and water degradation by adopting no-till practices and including legumes in their operations.

India, which is the largest consumer of pulses globally. India sought to increase pulse production by 2 million tonnes by the end of the Eleventh Five Year Development Plan (2011-12), through implementation of the National Food Security Mission for Pulse Crops (NFSM).

One study assessing the impact of the NFSM, based on interviews with farmers over two districts in the state of Maharashtra, identified significant economic returns at the farm-level from the programme’s improved technologies (improved pulse seed, integrated nutrient management and integrated pest management practices, resource conservation technologies, and capacity building of farmers).

Farmers in a district participating in the

programme saw double the net returns from pulses crop cultivation in 2008-09 over the previous year as compared to the non-NFSM district.

Further, the profit from pulses exceeded net profit margins of all other crops cultivated in the district, despite this occurring in rainfed conditions (Shah, 2011).

However, economic gains from pulse production could be far greater in India, and import tariffs, minimum price supports, and government support has largely underserved the needs of India producing enough pulses to meet domestic demand and diversify farm incomes.

Economic challenges for pulses in India India is the largest consumer of pulses, but government subsidies and price controls in the agricultural sector created distortions that affected domestic production.

Government subsidies for fertilizer and water promoted grains and oilseeds rather than the mix of support necessary to promote pulses.

Protectionist policies in the 1970s and 1980s were reversed in the 1990s, when government

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Rather, the share of total pulse imports in total merchandise trade declined after market liberalization (Agbola, 2004).

Further, in India, minimum support prices have been established as one of the policy instruments used to improve the economic viability of farming, stablize commodity prices, and enhance food security by diversification into oilseeds, pulses, livestock and fish.

However, minimum support prices for pulses have not demonstrated the same results as those for rice.

Prices for pulses were increased between 2008-09, at a rate higher than that for food grains, but that did not translate into larger areas planted under pulses, and this is attributed to the risks associated with pulse cultivation.

In comparison, paddy cultivation does not carry such risks, and farmers are assured of procurement by government agencies, whereas this is not the case for pulses.

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COVER STORY

FOOD LOSS !

A BIG CHALLENGE FOR MODI GOVERNMENT R ecent data published by the Ministry of Food Processing Industries is enough for your sleepless nights as it states that loss due the wastage of agricultural produce at the national level is estimated at Rs 92,651 crore.

Despite the food shortage issues and the constant rising food inflation, harvest and post-harvest loss of India’s major agricultural goods is almost three times as high as the new budget for the agriculture sector, which has seen an increase of 44% from Rs 24,909 crore in 2015-16 to Rs

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35,984 crore in 2016-17.

Only Food Corporation of India (FCI) has allowed 46,658 tonnes of food grains to rot in its 1,889 warehouses across the country in three years, while another 143.74 tonnes were reported stolen.

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Together, this could have fed nearly 8 lakh people from priority families under the National Food Security Act for an entire year.

FCI chairman and managing director Yogendra Tripati, though, allayed fears

of more wastage. "If you look at it, a majority of foodgrains wasted in 201516 was due to natural calamities like cyclone. A major storage issue was seen in the 1990s and there was a problem in 2013, but we've more or less overcome the issues and are also going to augment

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COVER STORY

our storage capacity in coming years," he said.

The Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana has estimated the annual value of harvest and post-harvest losses of

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COVER STORY some 3,000 die every day from dietrelated illnesses.

Poor cold storage infrastructure not only affects the freshness and quality of products, but also the price. Waste can contribute to the doubling of fruit and vegetable prices; while milk can cost 50 per cent higher. In India, due to low awareness of food freshness, lower quality fruits and vegetables end up being consumed. This is at considerable risk to their health.

major agricultural produces at national level to be of the order of Rs. 92,651 Crore calculated using production data of 2012-13 at 2014 wholesale prices.

According to the United Nations Development Programme, up to 40% of the food produced in India is wasted.

About 21 million tonnes of wheat are wasted in India and 50% of all food across the world meets the same fate and never reaches the needy. In terms of overall food waste agricultural produce, poultry and milk India ranks seventh, with the Russian Federation at the top of the list.

Storage Problem Food Corporation of India has 15.65 million tonnes (mt) of foodgrains in excess of the prescribed buffer norms as of April 1, 2016. According to the norms, which were reviewed in January 2015 after a decade, the FCI should have stocked only 21.04 mt of foodgrains as on April 1, but had 36.65 mt, meaning that problems of storing additional grains will plague the FCI this year too.

Sources in the FCI pointed out that the corporation has been consciously trying to reduce buffer stock year-on-year, and has managed to do that well. The 39.65 mt of grain as on April 1, 2016, is the least it has held in six years, with the highest in 2013 when it had 59.75 mt of stock, more than double the buffer norms.

"If you look at the macro scenario, we have excess foodgrains that can be utilised and we also have the least excess quantity over several years, which is a good sign," FCI chairman said, allaying fears of a

foodgrains crisis in the coming year.

"We have enough food for the next 12-14 months, as I see it. This is now the wheat procurement period, and we need to have 75 lakh tonne of wheat as of April 1, but we have 145 lakh tonne. Besides this, an additional 190 lakh tonne has been procured, which is more than the annual demand for PDS, which is 240 lakh tonne," he added.

A recent study conducted by Indian Institute of Management, Kolkata, revealed that only 10 per cent of foods get cold storage facility in India, this factor, accompanied by inappropriate supply chain management, has resulted in India becoming a significant contributor towards food wastage both at pre and post harvest waste in cereals, pulses, fruits and vegetables. India ranks 63 among 88 countries in Global Hunger Index with 20 crore Indians sleeping hungry on any given night, but in spite of this, nearly 21 million tonnes of wheat are wasted in India each year instead of reaching the needy..

Approximately one in three Indian children are malnourished, and

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Appropriate food storage plays a critical role in preserving the nutritional value of food. It prevents food borne illnesses caused by harmful bacteria and helps protect vital nutrients. When food is not stored properly the result is undernutrition affecting large sections of the poor, particularly women and children.

Consequently, physical growth and health deteriorates in adults, work capacity and productivity is reduced in children.

Dr Saumitra Chaudhuri Committee in 2012 constituted by the then Planning

21 www.agronfoodprocessing.com Commission had indicated cold storage requirement of 61 million tonnes. The present capacity of cold storage is estimated at around 32 million tonnes in the country,” said Minister of State (MoS) for Food Processing Industries Sadhvi Niranjan Jyoti in a written reply in Lok Sabha.

Government efforts to improve storage of food The Minister of Food Processing Harsimrat Kaur Badal seems to have chalked out a roadmap. She says, “My ministry works as a catalyst. It has the potential for doing a couple of things which are the need of the hour. Firstly, bring down food wastage. Food is being wasted at the harvest point and during transportation. If the same food which is wasted can be processed, it would mean it could either be available in raw form or in bottled form at a price which is affordable to the aam aadmi.”

Minister said to curb the losses in supply chain of agriculture produce and to improve the existing infrastructure for food processing, the Ministry of Food Processing Industries has been implementing the Schemes of Mega Food Parks, Integrated Cold Chain, Value Addition and Preservation Infrastructure, and Setting up/ Modernisation of Abattoirs.

Badal said that government is mobilising the credit support to food processing sector through Rs 2,000 crore special funds created in National Bank for Agriculture and Rural Development (NABARD).

The fund has been set up to provide loans of up to Rs 100 crore at a concessional rate of 8-9%. Up to July 2016, NABARD has sanctioned loans of Rs 505 crore in 12 mega food park projects and Rs 40 crore has been disbursed under the fund,In a written reply in Lok Sabha Minister of State for Food Processing Industries Sadhvi Niranjan Jyoti told that scheme for Mega Food Parks aims to provide modern Infrastructure for food processing Units in the country on preidentified cluster basis.

COVER STORY

Under the scheme, grant-in-aid is provided @ 50% of the eligible project cost in general areas and 75% thereof in difficult areas and hilly areas i.e., North East Region including Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of the states, subject to a maximum of Rs.50.00 Crore per project.

groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc.

She said that total of 42 Mega Food Park projects have been approved by the Government to be set up in the country.

The scheme is available in all States/ UTs and rural & urban areas. So far, 134 Integrated Cold Chain Projects have been sanctioned by the Ministry in the country to reduce the cold chain gap. Of this, 88 Integrated Cold Chain projects have achieved completion and commenced commercial operation, 46 Integrated Cold Chain projects are in various stages of implementation.

The Scheme for Setting up/ Modernization of Abattoirs aims to provide hygienic finished meat and meat products, slaughter waste management and pollution control. The Scheme envisaged grant-in-aid @ 50% of the project cost in general areas and 75% for North- Eastern region subject to a maximum of Rs.15.00 Crore per project.

So far, 41 Abattoir projects have been sanctioned. The Scheme of Cold Chain, Value Addition and Preservation Infrastructure aims at arresting postharvest losses of horticulture & nonhorticulture produce and providing remunerative price to farmers for their produce.

Under the scheme, financial assistance is provided in the form of grant-in-aid of maximum Rs.10 Crore per project for setting up of integrated cold chain and preservation infrastructure facilities without any break from the farm gate to the consumer.

The integrated cold chain and preservation infrastructure can be set up by individuals,

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The scheme is primarily private sector driven and proposals under this scheme are invited through Expression of Interest (EOI).

The impact of these 134 integrated Cold Chain projects being assisted by Ministry in the country under the Scheme of Cold Chain, Value Addition and Preservation Infrastructure in respect of expected

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121, 1st Floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist Thane - 401 107, Maharashtra.

Ph. : +91-22-28115068, 28555069, 8689979988 Email : info@agronfoodprocessing.com www.agronfoodprocessing.com

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COVER STORY Details of various other incentives provided by the Government to the cold chain sector • Services of pre-conditioning, precooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.

• Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015.

capacity creation is 4.92 Lakh MT of Cold Storage/Controlled Atmosphere/Deep Freezer, 113.90 MT/Hour of Individual Quick Freezer (IQF), 54.65 Lakh Litter Per Day of Milk Storage/Processing and 761 Number of Reefer Vans.

Capacity created from 88 completed cold chain projects is 3.31 Lakh MT of Cold Storage/CA/Deep Freezer, 77.15 MT/ Hr of Individual Quick Freezing,31.80 Lakh Litre Per Day of Milk Processing/ Storage and 423 Number of Reefer Vans.

State wise funds are not allotted under the scheme of Cold Chain, Value Addition and Preservation Infrastructure.

storages under their respective schemes.

Informing the house minister said that operationalisation of 4 Mega Food Parks and 29 Cold Chain Projects during 201617, Government has also approved setting up of 100 cold chain projects and 250 units under the scheme of creation/expansion of food processing and preservation.

The projects set up under the Schemes of this Ministry are granted financial assistance at a higher rate in difficult areas and North East Region as compared to general areas.

Details of number of units with statewise and year-wise funds released (in Crore) under the scheme of Cold Chain, value addition and Preservation Infrastructure. further told that National Horticulture Mission (NHM), National Horticulture Board (NHB), and National Cooperative Development Corporation (NCDC) under Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture & Farmers Welfare and Agricultural and Processed Food Products Export Development Authority (APEDA) under Department of Commerce, Ministry of Commerce and Industries, Government of India are also providing assistance for setting up cold

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• Under Section 35-AD of the Income tax Act 1961, deduction to the extent of 150% is allowed for expenditure incurred on investment for (i) setting up and operating a cold chain facility; and (ii) setting up and operating warehousing facility for storage of agricultural produce.

• Government has extended Project Imports benefits to cold storage, cold room (including for farm level precooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to Food Processing, imported as part of the project, irrespective of their tariff classification, would be entitled to uniform assessment at concessional basic

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COVER STORY

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customs duty of 5%.

• Refrigeration machineries and parts used for installation of cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty.

• Construction, erection, commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including cold storages for such purposes are exempted from Service tax.

• Capital investment in the creation of modern storage capacity has been made eligible for Viability Gap Funding scheme of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector.

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EcoDry Desiccant Wheel At the heart of it all

Central government is planning to develop Kiosks for farmers, which will be made available soon at Railway stations for e-auctions of agriculture products, the Union Minister of State for agriculture and farmers welfare, Parshottam Rupala said at the 9th International Summit on Food Processing, Agribusiness and Dairy.

Developments in the food processing sector, organized retail, and government initiatives will drive overall growth for the industry.

The industry’s progress will also fuel the flow of investment by multi-brand companies and sustain their interest in the retail sector.

To develop a world-class cold chain infrastructure, the government and industry bodies need to join hands to adopt better and more efficient technologies to prolong the shelf life of food products and to bring commensurate economic returns to the farmers.

This will not only ensure year-round availability of perishable food products and reasonable prices to the consumers but also equitable distribution to other parts of the country.

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GST?

GST- How Does It G Affect the Food Industry?

ST stands for "Goods and Services Tax", and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments.

G " ST means a Great Step Taken by India, a Great Step of Transformation, Great Step towards Transparency"- Narendra Modi, Prime Minister

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The introduction of Goods and Services Tax (GST) would be a significant step in the reform of indirect taxation in India.

Amalgamating several Central and State taxes into a single tax would

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GST? which is likely to take effect from 1 April 2017, levy on manufactured goods will come down while consumers may end up spending more as service tax burden would go up as GST is a consumptionbased tax.

mitigate cascading or double taxation, facilitating a common national market.

The simplicity of the tax should lead to easier administration and enforcement.

GST rollout across the country will improve ease of doing business and encourage industries to expand their operations, which in turn will help boost job opportunities and The Make in India initiative will get a significant boost as companies would be able to create manufacturing and industrial hubs across the country as GST would break the barrier of state tax regulations.

Under the new indirect taxes regime, which is likely to take effect from 1 April 2017, levy on manufactured goods will come down while consumers may end up spending more as service tax burden would go up as GST is a consumptionbased tax.

The GST will replace a number of different taxes levied and state and local level, and put in its place a unified value added tax system. This will eventually lead to the country functioning as one big common market sans added taxes at different levels.

Passing of GST will benefit both corporates and the economy. It will pave the way for significant job creation across most domestic consumption driven sectors. The uniformity of tax structures will open up markets beyond favourable territories, lead to expansion of services, capacity and product range.

But under the new indirect taxes regime,

The effect of GST on the food industry is on multi levels. For starters, agricultural produce will become more mobile as trucks carrying perishable commodities will be able to move around without much difficulty.

Currently, local produce rarely crosses state borders because of the Central Sales Tax (CST), but once the GST is in place, food from one part of the country can travel places without added taxes.

This will eventually lead to retail prices dropping, which is obviously a good thing for the consumer. The industries benefiting from the GST reform are the retail, logistics, FMCG, automobile, multiplex and cement industry. While the telecom and consumer staples (personal care items, dairy, edible oil, etc.) are at a said loss.

GST is a welcome move as there will be more transparency in the system and there will be a common market in the absence of CST and entry tax.

While the GST looks like a bed of roses, it comes with its fair share of ifs and buts.

Most of them because the rate at which the GST will be levied is still not clear.

Most of the top notch industrialist have opened arms for the GST bill but if the 18 per cent tax is in actual implemented thenthe food processing industry will be dented

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in many ways‌..18 % tax! Is not very food processing industry friendly‌ unless the overall GST is low for the food processing sector, it will lead to an increase in inflation and will not benefit farmers or consumers. hopefully GST does not put breaks on the growth momentum recently regained by this industry or burn a big hole in consumers already pin holed pockets and take processed food beverage, a fundamental necessity, out of the common man's reach.

Even the Dairy industry is quite uncertain of this bill. It is well known that milk production in India has been consistently growing at 4-4.5% annually.

This is because the milk producer in India has seamless farm to fork linkage through direct access to the ever expanding market for milk and milk products. High rate of GST taxation might reverse this cycle.

This would cause a decline in the prices of raw milk as paid to the milk producer.

The milk producer would find it difficult to manage cows and buffaloes. He might shy of making investment in purchase of livestock assets for increasing milk production.

GST is not beneficial for agricultural commodities and allied sector but might benefit the engineering sector. Currently, there is no tax to procure milk from farmers and only pay 2% central VAT on sale of milk powder to a company.

When GST gets implemented, the tax can be 12.5% or 15% or 18%. There will be a straight cost hike in milk and milk products prices.

Another example where the GST is not

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GST? traders. Furthermore one of Brazil's largest poultry firms is also learnt to be in talks with Kishore Biyani's Future Group to set up shop in the country. ‘’All these interest have sparked mostly after the historical GST implementation ’’ Food processing secretary, Avinash Srivastava said, "Several companies such as Pepsi, Coke are tying up with the farmers for the supply of fruits and potatoes. We will provide all assistance required from our side to them."

exactly of help is the tea industry. With almost 1000 million kg of tea consumed annually, the industry could also face negative effects of the bill. Tea being a garden produce and coming within the purview of the definition of agriculture as envisaged in the Draft Model GST Law should be exempted from GST. In case full exemption of GST is not possible, GST rate on tea should be kept on a par with the current tax rate of 5-6%. The present concessional tax rate of 0.5/1% for teas sold through auctions should be allowed to continue under the GST regime. Otherwise, tea will become costlier.

GST on food stuff should be kept at nil which is a most important thing because food stuff is essential commodity and GST on food stuff would lead to massive inflation. Food processing also helps inclusive growth, better price to farmers for their crops, help develop rural infrastructure, these are most important for development of the nation.

There should not be any additional burden of tax on interstate transport, similarly R&D cess, mandi cess etc. which are not within the framework of GST. It is also imperative that a softer view is taken while imposing GST regime on the dairy industry. The government ought to have a farmer-centric approach. It should create a special class for the dairy

industry by exempting all types of liquid milks, sterilized milks, dahi, chaach, lassi, shrikhand, paneer and so on from levy of GST and create a special category by levying 4% GST on all other dairy products. Recovery of low tax through dairy sector should not be considered as a loss to the national exchequer but an investment that would spur growth in milk production, ensuring national food and nutritional security and enhancing rural prosperity.

GST effect? Multinational keen to invest in food processing sector in India after 100% FDI rule The government recently has rolled out GST – that will replace a number of different taxes levied and state and local level, and put in its place a unified value added tax system.

This will eventually lead to the country functioning as one big common market sans added taxes at different levels.

Also with 100% FDI in trading of food products produced and manufactured in India through retail trading including ecommerce under approval route, as enhanced the international market interest in India.

Global retail majors including Walmart have expressed interest in investing in India's food retail sector that was thrown open to foreign direct investmentWalmart currently operates cash-andcarry stores that sell to retailers and

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While Ramesh Abhishek, secretary of department of industrial policy and promotion (DIPP), said $1.04 billion of FDI inflows have come to country from April 2014 to March 2016 from companies including Kellogg, Ferrero India and Mars International.

The government is hopeful that investments from Walmart will help build the required infrastructure in the food processing sector.

Walmart India is keen to sell food products directly to Indian consumers through brick-and-mortar and online stores.

The country is offering fiscal incentives such as 100% income tax exemption for the first five years of operation and 25% thereafter for the next five years to food processing units. ‘’It is good to encourage foreign investment in the sector to access more funds and bring global technology into the country’’

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GST?

IT in the food and beverage industries

M

ega-shifts in the food and beverage industries, driven by consumer and business forces, have the potential to disrupt a company’s DNA and its very purpose.The food and beverage industries are going through a convergence, similar to the digital convergence that changed the way we live and communicate.

Traditionally, these markets have been rather slow-moving. But now, several changes are disrupting the business at large.

Today Innovation is business; innovation is revenue. It is less about product creation than it is about value creation. Companies will be forced to create platforms rather than products per se. Future innovation will be platform based.

But the “Innovation Battle” will be fought at the retail arena. That means companies must go beyond mere product creation to success creation. That translates to agile supply chains, service levels, timely shipments and cost consciousness.

Yes, innovation cycles will get shorter

and launch windows will get narrower.

It will behoove companies to reverse engineer innovation from the retail arena.

Innovation must be bidirectional, from concept-to-customer and customer-toconcept.

in R&D, as well as processing and packaging equipment. It also relies on improved communication with suppliers and customers, which ultimately place a greater demand on the data that food companies need to manage. Add this to constantly changing regulations, reporting requirements and ongoing issues faced with planning, seasonality and promotion management, and the challenges keep mounting.

Looking at all these factor the food and beverage industry is moving in accordance to the consumer, who want the latest, the best, the innovative, the healthiest, and much more!

‘’But with so much on their plate, how do food companies balance these initiatives while operating within the reality of their cash flow?’’

Food and beverage manufacturers and

Consumer tastes are continually evolving. Never before has there been a greater consciousness of what’s in the products we eat, how they are processed and preserved, and the sources of their ingredients.

Frankly, consumers are taking a fresh look at what they’re eating, and it’s the companies that can meet these expectations who are seeing results in the form of increased sales.

Catering to these new needs requires greater investments

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distributors face a variety of challenges not experienced by other industries.

The combination of changing consumer demand, shelf space constraints, and ever increasing government regulation and recall concerns is forcing more and more food producers and their food distribution partners to migrate from entry level food software to more robust ERP solutions.

The concept of ERP in Food and Beverage industry In the food and beverage industry, food manufacturers come in a variety of sizes. From small, family-owned producers of ethnic foods to large, publically held conglomerates, the food industry is diverse. While the size of the organizational mix is distributed, the software requirements of food producers and food distribution companies are not.

GST? Many of these costs are fundamentally driven by IT and data management, and so the temptation is quite simply to make do with existing software and supplement limited functionality with spreadsheets and guesstimates.

profitability and maintain growth, modern businesses need to adopt these tools to help them rethink the way they operate and embark on bold new strategies.

Despite the added value the business gained the first time around, any seasoned food and beverage executive who has previously experienced an ERP implementation which left them with sour memories would find it not ideal and illogical to pursue the burden of another project, particularly if the business already feels swamped.

These have both been overcome with the introduction of industry-specific cloud solutions that have a purpose-built ERP functionality at their core.

However, as the world of ERP has changed significantly over the last few years, so too should one’s perceptions.

Of course, with any substantial investment in IT, selecting the right vendor is often the most important factor to consider, and there are a number of questions you should be asking when evaluating a potential cloud solution.

The traditional idea of a one-size-fits-all manufacturing solution has developed into a specific ‘food and beverage ERP solution’ with optional modules to address unique requirements.

This includes industry needs for traceability, new product introductions, complex scheduling and a myriad of other modern challenges. In order to increase

All food manufacturers and their associated distributors must be able to safely produce product and efficiently manage their manufacturing process and distribution channel, while staying in full compliance with government regulations.

From rigid recall management and audit controls, to forward and backward lot tracking, food processors must have robust ERP software with functionality that is specific to their industry.

To many companies, the idea of a major IT transitional investment such as a new ERP solution may seem too much to take on — both financially and timely.

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Another barrier preventing food companies from moving to a new solution is the perceived high capital cost and the substantial disruption to their business.

Said cloud deployments are gaining momentum, and more food and beverage manufacturers are considering the benefits that can be derived from Software as a Service (SaaS) rather than on-premises implementations.

What level of functionality is built in?

Any cloud solution should offer flexible and industry-specific functionality that reduces the need for customizations.

This includes built-in tools to address challenges such as short shelf life, attributes, yield and catch weight.

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GST? growth — while being well placed to successfully compete on a global stage.

With all these benefits in mind, organisations should be asking how, rather than why, they should move away from rigid on-premised solutions and embrace a more flexible, affordable and integrated cloud model.

Is Technology vital in the food and beverage industry?

With all the hoopla about the Cloud, the food and beverage markets will benefit the most from communalization of critical data among suppliers, manufacturers, packers, wholesalers and retailers.

Will it unify operations?

It is important to avoid numerous separate applications. Rather, the solution should provide all the functionality that is critical to a business within a unified suite.

These include capabilities for forecasting and demand planning, tracking and traceability, and recipe management. By having a comprehensive solution in the cloud, companies will enjoy enterprisewide visibility that will help to streamline operations for greater efficiency.

Is it secure?

To protect data from compromise, companies should always confirm that the solution follows industry best practices and protocols. Having a dedicated business unit that specialises in cloud implementation and deployment is a good indication of a vendor's commitment to security. Their consultants should also demonstrate extensive experience with SaaS-based implementations.

transparency for cost projections and avoids rigid contracts that may become outdated as the business evolves.

In summary, by moving critical applications to the cloud, food and beverage manufacturers may enjoy immediate savings and faster ROI, whilst at the same time enhancing their efficiency through industry-specific functionality.

While operating with the very latest technology, manufacturers will also benefit from a flexible IT environment that offers scalability to meet business

Are pricing options flexible?

A major advantage of cloud solutions is subscription-based pricing that helps companies avoid upfront expenditure. It is even more valuable if the solution has the flexibility to add additional functionality and users to meet business growth and increased demand. Having a per-userper-month pricing model increases

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It means doing whatever is necessary to minimize losses, opportunity costs and using information systems as a tool.

Such critical data would encompass point-of-sale information, inventory stock, demand signals, constraints and in-transit notifications. Technology also means creation of binding standards and protocol for collective performance.

Companies must transform information technology (IT) into a clear neuralnetwork of data points and decision points, and train people to understand cause and effect along the entire business.

Technology alone cannot solve the problem—training people is also required.

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MAGGI RETURN

T The tale of fall & rise of Maggi noodles in India

he Maggi scandal was like a magnanimous opus last year which landed the muchidolized noodle in a tangle of distrust and months of judiciary fights and cementing the cracks dented on its image. Miraculously, currently Nestlé India beloved, embattled instant noodle brand has reclaimed its market-leading position and more than 50% market share in India’s noodle market.

‘Maggi noodles regain its market-leading position’’ VOl.11 Issue 11 August 2016

Prior to the crisis, Maggi enjoyed close to 77% market share in India’s readyto-cook noodles market of India’s $800 million noodle market, according to a research from Edelweiss Securities before reports that the product contained excess lead caused the product to be pulled from the market and banned by the Indian government last June. At the time, India’s food safety regulator deemed the product “unsafe and hazardous for human consumption.” It destroyed more than

35 www.agronfoodprocessing.com 35,000 tonnes of the product, using more than 10,000 trucks to ferry the noodles to incineration centers for high-temperature thermal destruction in cement kilns.

The row continued for the next six months as consumers and retailers shunned the popular brand known for its ease to cook and distinct taste. The developments shook consumer confidence in packaged food products.

Nestlé insisted on the safety of its product throughout the crisis, but the controversy kept Maggi off shelves in India for five months. Though the instant noodles are now back on top, Nestlé India’s Maggi production has still not returned to pre-crisis form. The company has so far launched just four of its 10 Maggi varieties. ‘’Wan Ling Martello, Nestlé’s Head of Asia, Oceana, and Africa has said it may take the company three years to recover from the crisis’’ The strong performance of the relaunched noodles has been reaffirming for the crisis-tested company. Suresh Narayanan, Nestlé India’s Managing Director says of the development offers proof of enduring consumer confidence in the product.

“Over the past 33 years, Maggi has become the most trusted and valuable food brand in India.”

Several Maggi-related legal cases against Nestlé are still working their way through the Indian courts? Time will tell if the crisis is over or not!

“As per Nielsen report - Nestle India is delighted to announce that Maggi noodles has strengthened leadership position with more than 50% market share in the noodles category’’.

Like in most recalls globally, the company incurred hefty financial losses. In its annual report for 2015, Nestle confirmed that business was “severely disrupted by the Maggi noodles issue and continued to significantly impact business for a major part of the year.” And by June of last year, the market was swept clean of Maggi noodles. But the disappearance lasted only till August, when the Bombay high

court lifted the ban, paving the way for the brand’s attempt at a recovery.

Between November and December, amid an advertising blitzkrieg—including the “ we miss you too” social media hash tag and a “Welcome Back Maggi” ad campaign—Nestle brought back Maggi noodles. ‘’By the end of the year, it had a 33% market share’’ Amid crisis, Nestle India also ushered in a new top chief executive, Suresh Narayanan, who had promised to bring back “double-digit” growth to Nestle India through a mix of volume and price increases.

Nestlé spent three decades to build the much loved noodle brand in India. But one catastrophe that initiated from a small town of Uttar Pradesh faltered the world’s biggest food and beverage company into a debacle that cost it half a billion dollars.

Today here we narrate a taleof mangled crisis management on an epic scale and of the rise and fall and rise of ‘Meri Maggi.

Maggi is essentially one of Nestlé’s oldest and largest global brands. It originated in 1863 when Julius Maggi, a Swiss industrialist looking to improve the nutrition of the nation’s workforce, developed condensed pea and bean soups.

Maggi’s seasonings, soups, and noodles are now sold in 101 .countries.

People hardly even ate noodles in India when Nestlé introduced Maggi in 1983. But the masala spice mix made the taste familiar, and the two-rupee price point made it widely affordable.

Marketed to timepressed mothers— “Mummy, I’m hungry” went the product’s popular jingle—Maggi soared to popularity as a children’s snack.

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MAGGI RETURN Soon it was mainstream comfort food and “Maggi points”—stands at which vendors cook up noodles to order—proliferated.

By 2015, Nestlé was manufacturing Maggi at five of its eight Indian factories.

Protonotarios says that lead is among the many safety hazards around which Nestlé designs its quality assurance system: Each factory regularly checks raw materials, its water supply, and packaging for lead. Nestlé India also tests its finished product at each factory every six months, as required by India’s regulations. ‘’Nestlé, the world’s largest food and Beverage Company, has sold Maggi in India for more than 30 years. In 2014, Indians consumed more than 400,000 tons of the instant noodles—marketed in 10 varieties, from Thrillin’ Curry to Cuppa Mania Masala Yo!—and Maggi accounted for roughly a quarter of the company’s $1.6 billion in revenue in the country. That year Maggi was named one of India’s five most trusted brands’’ But Maggi collapse proved costly for Nestlé as it lost at least $277 million in missed sales. Additional $70 million was spent to execute one of the largest food recalls in history. Add the damage to its brand value—which one consultancy pegged at $200 million—and the total price tag for the debacle could easily be more than half a billion dollars. And still the product’s future depends on two legal cases that are working their way through the Indian court system.

Both pit Nestlé against the Indian government.

What exactly transpired?

For a 150-year-old Swiss business that brands itself as the “world’s leading nutrition, health, and wellness company,” the idea that it fell short on

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quality control—especially regarding a substance with such dire health effects— is denunciation.

Meanwhile Nestlé is still struggling to make sense of what exactly transpired. To counter the accusations of Indian health officials, Nestlé has produced voluminous tests—on more than 3,500 samples— that it says show its instant noodles are perfectly safe, with lead counts well below the legal limit.. ‘’But where, then, did things go so terribly wrong?’’

It’s also a deterrent tale about a towering multinational utterly losing its way in one of the world’s most sought-after markets— India. This is not for the first time, as it happens, a number of Multinationals have faced such crisis in India in the past. Coca-Cola left the country in 1977 after being asked to hand over its secret formula—only to return decades later and get banned again, briefly, when pesticides were found in its soda.

Walmart scaled back its ambitious plans in India in 2013 when it realized it couldn’t possibly comply with regulations requiring 30% of its products to be sourced from small Indian businesses.

Just recently Facebook tasted its own frustration when, in February, Indian regulators rejected its Free Basics web access program.

Schematic Theories While the High Court of Bombay weighed the facts of the Maggi case, in came the yogi. A Suspicion of multinational

MAGGI RETURN

companies in India was instigated —perhaps most prominently in the form of Baba Ramdev, a yoga guru and the face of India’s fastestgrowing consumer goods company, Patanjali.

Ramdev launched Patanjali Ayurved, an Ayurvedic medicine company, in 2006. Before long his followers were gathering to his everexpanding line of all-natural products.

The goods are low-cost and marketed as swadeshi, or Indian. Ramdev is pretends to be anti–multinational calls Coca-Cola and Western-style processed foods “slow poison.”

relief: It allowed the company to resume manufacturing Maggi for export.

As Nestlé’s predicamentsworsened, the happenstances were too good for many on social media to resist. Twitter and WhatsApp buzzed with giddy speculation that Baba Ramdev himself was behind the scandal or that he would swoop in to the rescue by launching his own Patanjali instant noodles. Finally, in midJune, Ramdev said that after months of research—wholly unrelated to Maggi— Patanjali planned to launch a line of locally sourced whole-wheat noodles in late 2015.

What steps did Nestle take then?

While Nestlé waited for the high court’s verdict, the company took steps to stage up itspublic relation and communications game. The company created a Maggi information hub on its website, where visitors could view its lab reports and read up on MSG. It publicized its recall efforts. And it invited journalists to tour its Quality Assurance Center in Moga.

‘’Baba Ramdev capitalized on the Maggi crisis to launch his own line of “lead and MSG-free” instant noodles last November’’ During the scandal period Ramdev insistently stressed that “Maggi should apologize and if the government takes strong measures, the company should pack up and leave the country. We don’t need a company that serves poison.”

Singapore and Australia had already pronounced the noodles safe for sale and consumption; Canada, the U.K., and the U.S. would do so as well in the following weeks. For many it raised the question: If Maggi was fine for consumers in those developed nations, why not for the people of India? Thus On June 30 the High Court of Bombay offered Nestlé some

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Different conclusions were drawn by different people. Not only was Nestlé guilty of selling tainted noodles, these folks asserted, but it did so willfully.

Theexportedproduct would be safe some admonished. Many claimed that Nestlé sells a higher-quality product in other countries, these; in India, where the population and authorities have traditionally been less judicious, it pushes substandard goods.

That’s just one of the many part of conspiracy theory. Another one was that therewassome politics behind this case like strained diplomatic relations between India and Switzerland over banking secrecy.

With the arrival of Suresh Narayanan as its new top executive, Nestlé India also got a whole new boost in late July from.

Narayanan, 56, had spent the decade covering the globe for Nestlé.

But after the Maggi situation blew up, Narayanan got a call from his boss, Wan Ling Martello, the head of Nestlé Asia, Oceana, and Africa, asked him to move again. This time he was desperately needed in India. ‘’Narayanan came! And declared his first mission was “to bring Maggi back.”

On Aug. 13, the High Court of Bombay delivered its judgment, tat sided Nestle.

The ruling was unusually long—145 pages. It lifted the ban, declaring that the FSSAI had acted capriciously. The judgment allowed Nestlé India to resume

37 www.agronfoodprocessing.com sales of Maggi, on the condition that another round of samples—90 in all—be tested for lead and cleared in the following six weeks by three labs accredited by the National Accreditation Board for Testing and Calibration Laboratories.

Maggi returns Before re-launching, Nestlé India worked on heavily preparing for its reentry, especially, after the product’s months-long absence from shelves. The company’s marketers began with young people, who had proved a forgiving and fiercely loyal fan base; they had been clamoring for Maggi’s return practically since the trouble began, and for them Nestlé launched a “ We Miss You Too” campaign on YouTube—a series of minute-long spots starring handsome bachelors who are forlorn without their instant noodles. To court mothers, it got real moms to give video testimonials about why they still trusted Maggi.

After the five months and four days government ban Maggi returned on the auspicious day of Dhanteras. Maggi’s relaunch was scheduled for Monday, Nov. 9 2015, the first day of Diwali, the Hindu festival of lights; it carries associations of well-being and prosperity.

acknowledges that they didn’t play the Maggi crisis perfectly. Nestlé has been in India for 100 years and it wants to be there 100 more. You can’t achieve that in a country if you blow up your relationship with the regulators. So Nestle has diligently claimed that it would work alongside with the India food regulators for restored empathy.

In any case, the global giant was given an important lessoning in the unpredictability of one its most promising growth markets.

As Narayan puts up, “When you manage an issue in India, you’re dealing with a certain set of known entities but also a much larger set of unknown entities and who is going to set off what bullet at you is what you have to keep anticipating.

Where the hell is this next bullet going to come from? It’s like being shot at in the dark.” So next time the moment Nestle hears smells something fishy it’s going to be ready to for it…fully armed.

As Maggi has reclaimed its throne back it is now ready to flow ahead with new takeoffs. Nestle India has launched new

Today’s scenario Though Maggi noodles is back and now reigning the noodle market again, but the Maggi saga is far from over. The Monday after the big relaunch, the FSSAI filed an appeal of the Bombay court decision in India’s Supreme Court. There is another legal case pending.

On Aug. 12, 2015, the day before the ban was lifted; the government had sued Nestlé India for $99 million.

The complaint, lodged on behalf of consumers by the National Consumer Disputes Redressal Commission, alleged the same basic things the FSSAI’s order had: that the company had sold unsafe products and misled consumers through its advertising practices. Both cases continue to work their way through the Indian courts.

Today Nestlé’s top management team

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MAGGI RETURN variants in its Maggi Noodles portfolio and re-launched cup noodles. The FMCG major has added two new variants to the Maggi Noodles portfolio -- 'Maggi Hot Heads' and 'Maggi No Onion No Garlic Masala'. It has re-launched its cup noodles range with 'Maggi Cuppa Masala' and 'Maggi Cuppa Chilly Chow' and introduced a new variant of cup-noodles -- 'Maggi Hot Heads Cuppa’. ‘’Maggi Noodles has regained its leadership in the hearts and minds of the Indian consumer:’Suresh Narayanan’’ It has been the consistent and abiding passion at Nestle to marry the benefits of our extensive knowledge of flavours, technology and the science of nutrition with the tastes and experiences that delight our consumers," Narayanan said.

‘Nestle has partnered with online marketplace Snapdeal for an online sale of all these variants’’ Nestlé’ India The headquarters of Nestlé India is a fivestory, glass-walled building that sits along an eight-lane expressway in Gurgaon, a commercial district about 30 minutes outside central Delhi.

Nestlé began doing business in India in 1912. Today the Swiss parent company owns 63% of Nestlé India, which trades separately on the Indian stock exchange.

Nestlé’s operations in India encompass eight factories, an R&D facility focused on developing products for the Indian palate, and more than 7,000 employees.

Today Nestlé is one of the world’s biggest and most profitable corporations, with some 335,000 employees, and products sold in every country around the world.

The multinational has powerful brands like Kit Kat, Nescafé, Stouffer’s, and, of course, Maggi. ‘’Nestlé is synonymous withits founder Henri Nestlé- a self-described “merchant chemist” who started a company bearing his name in 1866 and was said to obsess over quality’’

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FOOD SAFETY

Wildly ineffective

food date labelling system

needs urgent makeover S

helf life is the recommended maximum time for which products or fresh (harvested) produce can be stored, during which the defined quality of a specified proportion of the goods remains acceptable under expected (or specified) conditions of distribution, storage anddisplay.

Most expiration dates are used as guidelines based on normal and expected handling and exposure to temperature.

Use prior to the expiration date does not guarantee the safety of a food or drug, and a product is not necessarily dangerous or

ineffective after the expiration date.

"Sell by date" is a less ambiguous term for what is often referred to as an "expiration date". Most food is still edible after the expiration date. A product that has passed its shelf life might still be safe, but quality is no longer guaranteed.

In most food stores, waste is minimized by using stock rotation, which involves moving products with the earliest sell by date from the warehouse to the sales area, and then to the front of the shelf, so that most shoppers will pick them up first and thus they are likely to be sold before the

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end of their shelf life. This is important, as consumers enjoy fresher goods, and furthermore some stores can be fined for selling out of date products; most if not all would have to mark such products down as wasted, resulting in a financial loss.

Shelf life depends on the degradation mechanism of the specific product. Most can be influenced by several factors: exposure to light, heat and moisture, transmission of gases, mechanical stresses, and contamination by things such as micro-organisms. Product quality is often mathematically modeled around

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FOOD SAFETY manufacturers are free to determine date shelf life according to their own methods.

The result, say the authors, is confusion among consumers who assume the dates are actually expiry dates.

Confusion over best before dates are causing two problems: not only are shoppers needlessly throwing out food that's still safe to eat, they are also keeping foods they should throw out, because they are relying too strictly on the dates.

Such dates apply only to unopened foods.

Once a product is opened, it usually needs to be eaten within a few days. But some consumers mistakenly believe products are good until their best before dates, even if they open them weeks before.

a parameter (concentration of a chemical compound, a microbiological index, or moisture content).

For some foods, health issues are important in determining shelf life.

Bacterial contaminants are ubiquitous, and foods left unused too long will often be contaminated by substantial amounts of bacterial colonies and become dangerous to eat, leading to food poisoning. However, shelf life alone is not an accurate indicator of how long the food can safely be stored. For example, pasteurized milk can remain fresh for five days after its sell-by date if it is refrigerated properly. In contrast, if milk already has harmful bacteria, the use-by dates become irrelevant.

Best before labels often confuse consumers Many consumers are needlessly throwing out thousands of kilograms of food every year because they falsely believe that "best before" dates on food packages are an indication of food safety, a new study contends.

Research published research by Harvard Law School and the Natural Resources Defense Council concludes that the dates printed on packaged foods only serve to confuse consumers and compel many to throw out food that hasn't gone bad at all.

The authors of this latest study note that

not only does wasted food cost consumers and the food industry money; it also wastes all the natural resources that are used to grow, process, distribute and store food.

The problem of food waste has many causes, but the study authors say that one part problem is that there are no binding standards on best before date labelling.

That leaves it to food manufacturers to decide on their own how to set best before dates and what kind of phrasing to use.

"Phrases like 'sell by', 'use by', and 'best before' are poorly regulated, misinterpreted and lead to a false confidence in food safety and now is time for a well-intended but wildly ineffective food date labelling system to get a makeover."

It is important to have labels that offer an indication of shelf life after opening, using phrasing such as "Best within XX days of opening". It is also imperative that a number of other changes should be done like: •Make "sell by" dates that are meant for retailers be invisible to the consumer.

Only the dates that are useful to the consumer should be visible.

• Remove quality-based dates on non-perishable, shelf-stable products altogether and replace them with dates that indicate shelf life after opening.

• Use a more easily understandable date label system that uses consistent, unambiguous language and clearly differentiates between safety- and qualitybased dates.

"Sell by" dates are for retailers to help with stock control, and are a suggestion about when the retailer should no longer sell products in order to ensure they still have good shelf life after consumers purchase them. They are not meant to indicate the food is bad on that date. "Best before" and "use by" dates, on the other hand, are intended for consumers.

• Ensure date labels are clearly and predictably located on packages, similar to the "nutrition facts" panel.

With few regulations on how these dates are determined, it is seen that for the vast majority of food products,

• Including "freeze by" dates, where applicable. Such labels would help raise consumer awareness of the benefits of

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• Employ more transparent methods for selecting dates: Create a set of best practices that manufacturers and retailers can use to determine date labels for products.

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FOOD SAFETY its best – and it is up to the consumer to judge whether or not it is still edible.

On the other hand ‘use by’ is far stricter in its meaning, as these dates refer to the safety of the food.

The product can be eaten up to the end of this date but not after, even if it looks and smells fine. These labels are commonly found upon food products that are highly perishable from a microbiological point of view, such as meat and dairy.

freezing foods and the abundance of food products that can be successfully frozen in order to extend shelf life.

While improvements to Best Before dates are badly needed, consumers shouldn't fully rely on them. That's because the dates assume that food distributors and retailers have ensured they kept the foods at the right temperatures.

Even milk with a best before date of three weeks from now can still go off if it's allowed to sit outside a refrigerator for too long.The vast majority of food poisonings are due to harmful bacteria, such as salmonella and E. coli, entering foods, not from eating expired or spoiled foods.

the meaning of these dates. While it is true that a lot of food is discarded because it has passed the point at which it is deemed safe to the consumer, a worryingly large amount is still perfectly edible, if a little past its prime.

So what exactly do these dates mean? And why are they so confusing for consumers?

The legal responsibility of food manufacturers There is no definitive list of the foods that should carry a particular type of date mark, which is a particular source of confusion for consumers. If a product is marked ‘best before’ it means that the food is still OK for consumption once the date has passed, although it may not be at

Shelf life markings relate to food waste Use by, best before, best before end, sell by. When purchasing products in supermarkets, or filtering out gone-off food from the fridge, shelf life plays an important role in what consumers choose to keep or discard.

While a number of these shelf life labels are largely interchangeable, the confusion over what is or is not safe to eat is often left up to the interpretation of these phrases by the consumer.

According to the European Commission (EC) approximately a third of food waste created at the household level “could be linked to date marking due, amongst others, to consumer misunderstanding of

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From a retailer standpoint, the law around food dating is a simple, as stated in the Guidance on the Application of Date Labels to Foodreport published by the Department for Environment, Food and Rural Affairs (DEFRA). The report reads: “It is an offence to sell any food after the ‘use by’ date. However, it is not an offence to sell food after the ‘best before’ date, provided it still complies with the Food Safety Act 1990 and the General Food Regulations 2004.”

In addition to these legal terms, additional markings increase the amount of consumer uncertainty. For example ‘sellby’ and ‘display-by’ instructions, which are used by the food industry for stock control purposes, can be mistaken for expiry dates. As the report states:

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FOOD SAFETY the EP in favour of changing the expiry date system.

Recent research conducted in Germany and Austria has shown that 80% of the food that is thrown away at home consists in fresh fruits and vegetables, bread and bakery products, meat and meat products, and milk and dairy and these are foods that either do not bear any date at all or that mostly have a ‘use by’ date.

Therefore before deciding on a measure that might actually miss its target, it would be useful to investigate if similar studies exist in other EU countries and if they confirm such trend.”

“There is evidence from Waste & Resources Action Programme (WRAP) and general correspondence from consumers that some consumers do not understand the difference between the legally required date marks and those used by food businesses for stock control purposes.”

Using consumer judgment to determine food quality Once purchased, it is then up to the consumer to judge whether food is still edible. This lack of understanding of food quality is leading to a high percentage of food waste, with consumers erring on the side of caution and throwing away edible food because it is two or three days ‘outof-date’.

According to shelf-life guide StillTasty, “After the ‘use by’ or ‘best before’ date has passed, you may start to notice gradual changes in the unopened product’s texture, color, or flavor. But as long as you’ve been storing the unopened item properly, you can generally consume it beyond this date.

Your best bet for gauging whether an unopened shelf-stable product with this type of date is still of satisfactory quality, is to simply smell and examine it first.”

This confusing method of cross-dating food is not just confined to one place.

Most of the countries have guidelines are equally perplexing. There is no uniform or universally accepted system used for food dating in most places.

The DEFRA report confirms this chain of responsibility, noting: “It is the responsibility of those originally labelling the food, namely the manufacturer, packer to set the appropriate durability indication or date mark, together with the storage instructions required to achieve that shelf life. In practice, the brand owner will be involved in decisions about the setting of the date mark.”

Changes to shelf life labelling by European Union In 2014, a movement to remove compulsory ‘best before’ labels on coffee, rice, dry pasta, hard cheeses, jams and pickles in order to help reduce the amount of food wasted across Europe each year began to gain traction. The hope being that removing the dates would ease consumer fear of eating food that would have a negative impact on health.

However, support for the change is not unanimous. In a letter sent to the European Parliament (EP), addressed the need for change in food waste policies across the entire supply chain, rather than spotlighting the waste produced at household level. Perrin also noted the inconsistencies in the reports provided to

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The EP also took into consideration the impact that changes to food labels would have on consumer trust in brands.

The debate came soon after the UK horsemeat scandal, and in the 'Best before' date labels: Protecting consumers and limiting food waste briefing in February 2015, there was concern within the EP that “Further relaxation of the labelling scheme could therefore deepen consumer mistrust and render control over products exempted from 'best before' labelling less transparent, thereby prompting an increase in fraudulent packaging and labelling practices.”

If changes to ‘best before’ dating do occur, they are unlikely to be seen on our shelves any time soon. Meanwhile the amount of food waste is rising and while a portion of the blame lies with consumer confusion, in order for substantial changes to take place, food waste needs to be addressed

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VOl.11 Issue 11 August 2016

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FOOD SAFETY not have only 'expiry date' on label. It is high time that both the FSSAI and Consumer Affairs Ministry address misleading advertisements.

Conclusion Date labels primarily exist as a way for food manufacturers to communicate to their customers what to do or what to expect from the food product.

There is not a lot of standardization.

throughout the entire supply chain.

India’s stand on food date labelling system Union Minister Ram Vilas Paswan has distinctively said that labels printed on food items should carry only “expiry date”, and not “best before”, which has no meaning.

The food ministry thinks that food date labeling system should only have ‘expiry date’. There is no meaning in ‘best before’”, according to Paswan, the Consumer Affairs, Food and Public Distribution Minister. Paswan is a in the favor, like the European Union, to “work out” and implement this measure.

Amid globalization and foreign trade, consumers are confused with variety of products that are available in the market.

Consumers get attracted with labels and buy without seeing the contents of label and FSSAI has to see this aspect. There is 'Best before" in label is there.

What does it mean? Is it fit for human consumption after six months? We don't know. Consumers are confused. What is sacrosanct about 'Best before’? Why

Confusion over date labels is a huge contributor to food waste. Americans trash an estimated 40% of viable food—upwards of 160 billion pounds per year—and misunderstandings about food date label comprises 20% of consumer food waste, based on a British study.

In the world of food, the difference between “best by” and “expires on” is significant. “Everybody thinks it’s an expiration date when in fact it’s a best before date. And there’s a big difference.

Expiration dates are about food safety.

Best before dates are about taste, texture and appearance.

Only a small group of foods need expiration dates—primarily ready-toeat foods like deli meats and prepared sandwiches, both foods which may contain bacteria like listeria and are not cooked immediately prior to consumption.

Unlike other pathogenic bacteria, listeria is durable enough to grow at refrigerator temperatures. Recently cooked meats are safe from listeria—it dies at 160°F— but the expiration date on deli meats importantly reflects when listeria may have reached dangerous levels.

But most harmful bacteria, like Salmonella and E. coli, aren’t capable of growing on foods stored at cold temperatures or in

VOl.11 Issue 11 August 2016

dry conditions, like crackers in the pantry.

“Microorganisms are no different than us—we need water, we need food, and we need the proper temperature to survive”.

Depriving bacteria of their basic needs is the central philosophy of food storage.

Provided you do your part—keep foods refrigerated, wash fruits and vegetables, cook meat thoroughly and isolate raw meat from other foods—there’s a low risk of contracting a foodborne illness. And that risk usually doesn’t increase as food ages.

For other foods—the vast majority— date labels are simply the manufacturer’s suggestion about when a product might taste freshest. “While shelf-life dating might be important for those products, it’s probably—and that’s a big asterisk there—not that important for food safety.

It’s really about delivering to the customer a product that, at the end of its shelf-life isn’t a slimy disgusting mess.

Other foods like cookies and crackers, which are stable on store and pantry shelves for long periods of time, spoil for the same reason milk does. Over time, their fat reacts with the oxygen in the package, becoming rancid. The process— called oxidative rancidity—is what makes old crackers taste funky.

For Updated News Everyday logon to

www.agronfoodprocessing.com

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FDI IN FOOD RETAIL

New FDI reforms to improve the Indian food processing industry

I

ndia is second largest producer in the world next to China. It has 161 million hectares and has highest acreage under irrigation. The industry is estimated to be worth around US$ 67 billion and employing about 13 million people directly and about 35 million people indirectly. At the same time the rural economy of India is considered as poor because the value addition to food products in low of food grains, vegetables, fruits and other cereals has not been done in rural areas. Hence, there is trust on food processing units in rural areas.

Food processing is one of the main contributors in the Indian economy and is a process of value addition to the agricultural or horticultural produce by various methods like grading, sorting and packaging. In other words, it is

a technique of manufacturing and preserving food substances in an effective manner with a view to enhance their shelf life; improve quality as well as make them functionally more useful. At the same to start, expand and absorb technology in the food processing sector one important requirement is capital.

total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 14 per cent of manufacturing Gross Domestic Product (GDP), 13 per cent of India’s exports and six per cent of total industrial investment.

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. Food has also been one of the largest segments in India's retail sector, which was valued at US$ 490 billion in 2013. The Indian food retail market is expected to reach Rs 61 lakh crore (US$ 894.98 billion) by 2020.

Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's organic food market is expected to increase by three times by 2020.

The Indian food processing industry accounts for 32 per cent of the country’s

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Shortage of capital in India made way for Foreign Direct Investment (FDI), especially after 1991 economic reforms.

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An analysis was made on FDI in India’s food processing sector and the results showed a positive trend though much has be done in the policy level as well as practical aspects.

Foreign Direct Investment A foreign direct investment is an investment in the form of a controlling ownership in a business enterprise in one country by an entity based in another country it includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra company loans". In a narrow sense, foreign direct investment refers just too building new facility, a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.

FDI usually involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net (i.e., inward FDI minus outward FDI) cumulative FDI for any given period. Direct investment excludes investment through purchase of shares.

The rapid growth of world population since 1950 has occurred mostly in developing countries. This growth has been matched by more rapid increases in gross domestic product, and thus income

per capita has increased in most countries around the world since 1950.

Importance and Barriers to FDI An increase in FDI may be associated with improved economic growth due to the influx of capital and increased tax revenues for the host country. Host countries often try to channel FDI investment into new infrastructure and other projects to boost development. Greater competition from new companies can lead to productivity gains and greater efficiency in the host country and it has been suggested that the application of a foreign entity’s policies to a domestic subsidiary may improve corporate governance standards.

Furthermore, foreign investment can result in the transfer of soft skills through training and job creation, the availability of more advanced technology for the domestic market and access to research and development resources.

The local population may benefit from the employment opportunities created by new businesses. In many instances, the investing company is simply transferring its older production capacity and machines, which might still be appealing to the host country because of technological lags or under-development, in order to avoid competition against its own products by the host country/ company.

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FDI IN FOOD RETAIL

Introduction of FDI in India Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then finance minister Manmohan Singh. As Singh subsequently became the prime minister, this has been one of his top political problems, even in the current times. India disallowed overseas corporate bodies (OCB) to invest in India.

India imposes cap on equity holding by foreign investors in various sectors, current FDI in aviation and insurance sectors is limited to a maximum of 49%.

Starting from a baseline of less than $1 billion in 1990, a 2012 UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010–2012. As per the data, the sectors that attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. Based on UNCTAD data FDI flows were $10.4 billion, a drop of 43% from the first half of the last year.

FDI Policy for Retail Food Sector In India, the Food Processing Sector attracting more FDI because, it is getting FDI equity. Foreign Direct Investment according pro-liberal sources is attracting FDI in this sector on a large scale. Earlier in June Government allowed 100% foreign investment in processed food retailing provided they are manufactured in India that will help retailers such as Marks & Spencer, Tesco, Walmart and IKEA to set up food-only retail outlets.

Minister of Food Processing Industries Harsimrat Kaur Badal had written to the Prime Minister's Office pushing for 100% FDI in multi brand retail in the food processing sector saying such move would create of infrastructure, revenue and uplift the farmers.

In 2013, India allowed 51% FDI in multi-brand retailing but such ventures come with a host of riders such as 30% mandatory local sourcing, $100 million upfront investment and half of it in backend infrastructure. With the new

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FDI IN FOOD RETAIL

ruling in the budget, retailers can sell their own food products without any restriction as long as they are produced within the country, government officials said.

In 2012, while approving IKEA's Rs 10,500-crore investment proposal, the Foreign Investment Promotional Board (FIPB), the agency that clears all foreign investments in the country, it struck down IKEA's plans to set up its famous cafes in the stores citing laws that don't allow FDI in food. Later the government gave approval to IKEA to set up restaurants as part of its stores only to be consumer in the stores.

Recently, Badal met the Ambassadors/ High Commissioners/representatives of the countries viz. UAE, Germany, France, Poland, Australia, Italy, Netherlands, Indonesia, South Korea, Thailand, Canada, China, New Zealand, Brazil, USA, UK, Russia, Japan, Malaysia & Belgium and explained to them the vast opportunities that have arisen in India for foreign food retailers and food manufacturers as a result of the recently announced 100% FDI in trading, including e-commerce, in respect of food products manufactured and/or produced in India.

Smt. Badal also shared that the Ministry of Food Processing Industries would be providing hand-holding and facilitation for all foreign investors who would like to invest in the food processing sector in the country," an official statement said.

She said there are opportunities in the mega food parks in India wherein foreign investors could set up units immediately and take advantage of 100 per cent FDI in trading of food products manufactured and produced here.

Inflow of Foreign Direct Investment in Food Processing Industries During April 2000-March 2016, the food processing industries attracted FDI worth $6.81 billion (or 2.36 per cent of the overall FDI inflows of $288.5 billion during the same period). Food processing sector exports are worth around $38 billion (or 2.5 per cent of world exports

in the sector).

Through a liberal policy, the government aims to ensure greater value addition to farm produce, bring down wastage of perishables, curb inflation and price fluctuation of food items, raise farmers’ income and generate more employment.

Through a more open policy, the government also wants to ensure that India attracts the latest technologies in the food processing sector.

505.88 Million in 2015-16. FDI inflows into the food processing industries has been one of the reasons for 5.78 % growth of gross value added in food processing industries in 2014-15 at 2011-12 prices.

Prior to the June 20 decision on allowing 100 per cent FDI trading of food products, FDI flow into the sector did not match the expectations. This, according to experts, was because of the crucial missing link — which was FDI in trading of food items.

To encourage the development of food processing industries Government has reduced excise duty on food processing and packaging machinery from 10% to 6%, allowed food processing units 100% income tax exemption on profits for the first five years of operation and after that at the rate of 25% income tax exemption on the profits for the next five years, etc.

According to the Confederation of Indian Industry, the move to allow 100 per cent FDI in trading of food products manufactured or produced in India, will help drastically reduce post-harvest losses and ensure that farmers get better prices.

It will also result in the strengthening of backend infrastructure and lead to a direct purchase by retailers, according to the industry body.

Foreign Direct Investment in food processing sector has increased from USD 170.21 Million in 2011-12 to USD

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Further, as per the Annual Survey of Industries the number of food processing industries in the registered sector has also grown from 36880 in 2011-12 to 37450 in 2013-14.

The online food ordering business in India is in its nascent stage, but witnessing exponential growth. The organised food business in India is worth US$ 48 billion, of which food delivery is valued at US$ 15 billion.

With online food delivery players like FoodPanda, Zomato,TinyOwl and Swiggy building scale through partnerships, the organised food business has a huge

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FDI IN FOOD RETAIL • PureCircle, a Malaysia-based natural sweetener producer, plans to invest around Rs 1,300 crore (US$ 200 million) in India to set up a manufacturing plant and make the country its regional production and export hub in the next five years.

• Global beverage company Pepsi plans to invest Rs 500 crore (US$ 74.56 million) to set up another unit in Maharashtra to make mango, pomegranate and orangebased citrus juices, while biotechnology giant Monsanto plans to set up a seed plant in Buldhana district of Maharashtra.

•Swiggy, a food delivery start-up owned

by Bundl Technologies Private Limited, has raised Rs 230.34 crore (US$ 33.80 million) in a Series C funding round, with its existing investors SAIF Partners, Accel Partners, Norwest Venture Partners and Apoletto Asia Ltd contributing 79 per cent of the new funds raised.

potential and a promising future.

Investments According to the data provided by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around US$ 6.70 billion worth of Foreign Direct Investment (FDI) during the period April 2000-December 2015. The Confederation of Indian Industry (CII) estimates that the food processing sectors have the potential to attract as much as US$ 33 billion of investment over the next 10 years and also generate employment of nine million person-days.

Some of the major investments in this sector in the recent past are: • Henry Ford Health Systems (HFHS), a US-based health and wellness group, plans to enter India by signing a franchise partnership with Chandigarh-based hospitality and food services firm KWalls Hospitality, and set up 'Culinary Wellness' branded stores across the country.

• Mondelez International, the US-based confectionery, food, and beverage major,

inaugurated its new manufacturing plant in Andhra Pradesh set up for Rs 1,265 crore (US$ 190 million), with an annual production capacity of 250,000 tonnes.

• CX Partners led by these two companies have invested around Rs 450 crore ($67.5 million) in cookies, biscuits and breads maker Cremica in August 15.

• Mid-market-focused private equity firm Lighthouse Funds has invested Rs 90 crore ($15 million) in Rajasthan-based snacks maker Bikaji Foods International Ltd to buy 12.5 per cent equity stake in the company in April 2014.

• Abu-Dhabi based Al Dahra International Investments LLC has completed its deal with India-based rice exporter Kohinoor Foods Ltd, buying little over 7 million shares or 20 per cent stake for Rs 112.77 crore, in July 2013.

•Qatar-based Hassad Food Co has picked up a 51% stake for about $100 million (Rs 544.45 crore) in New Delhi-based basmati rice seller Bush Foods Overseas Pvt. Ltd in April 2013.

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• American doughnut chain Dunkin' Donuts has tied up with local online grocery delivery platform Grofers for home-delivery of its packaged and freshly made products.

• Private Equity (PE) firm India Value Fund Advisors (IVFA) plans to invest around US$ 100-150 million in the food business in India over the next two years.

• Zomato, a restaurant search and discovery platform, has raised US$ 60 million from Singapore governmentowned investment company Temasek, along with existing investor Vy Capital, in order to explore new business verticals.

• Kwality Ltd has received capital commitment of up to Rs 520 crore via structured finance from KKR India .to fuel its aggressive growth plans as the company continues to rapidly shift its business model towards B2C/retail segment.

• Finnish packaging firm Huhtamaki has entered the growing foodservice packaging market in India by acquiring 51 percent of Val Pack Solutions Private Limited, a privately held paper cup manufacturer based in Mumbai, for

49 www.agronfoodprocessing.com approximately Euro 2 million (about Rs 15 crores).

Fund Used By Indian Companies Kwality ltd After receiving the capital commitment of upto Rs 520 crore via structured finance from private equity fund from Kohlberg Kravis Roberts & Co Ltd (KKR) India to fuel its aggressive growth plans Kwality Ltd, rose 4.63% to Rs 116.40 on BSE. Kwality said it has received capital commitment of upto Rs 520 crore via structured finance from KKR India, one of the biggest private equity (PE) fund, to fuel the company's aggressive growth plans as it continues to rapidly shift its business model towards B2C/retail segment.

The proceeds shall be utilized to fund capex to further strengthen milk procurement infrastructure solely for high-margin value-added product categories including cheese, paneer, table butters, tetra-packs, flavoured milk and yoghurt among others.

The company intends to roll out a series of such products in the near future, Kwality said. Additionally, funds will be deployed for part repayment of debt to improve cash flows and augment brand building activities.

As part of a change in its business strategy, Kwality is revamping all business functions across the value chain including procurement, changing product mix to cater to evolving needs of customers and ensure high quality, brand building, building an extensive distribution network to boost retail presence, set up robust IT infrastructure for process integration, and improve managerial competencies.

Huhtamaki Aiming its expansion in India, Finnish packaging firm Huhtamaki buys 51 percent stake of Val Pack Solutions Private Limited, a privately held paper cup manufacturer based in Mumbai, for approximately Euro 2 million (about Rs 15 crores). The business will become part of Huhtamaki's Foodservice EuropeAsia-Oceania business segment.

“Many of our global and regional

customers have plans to grow in India.

With Val Pack, a well-established company with high manufacturing standards, we are able to serve them locally. We also look forward to growing the business further by investing in additional capacity and introducing an extended offering of foodservice packaging to the Indian market,” said Eric Le Lay, executive vice president, Foodservice Europe-AsiaOceania, Huhtamaki Earlier in July 2014, it acquired Positive Packaging Industries, a privately owned flexible packaging company with nine manufacturing facilities in India and the UAE, for Euro 247 million (about Rs 2009 crore).

Zomato Zomato, the restaurant search and discovery app, announced that it has raised $ 60 million in a fresh round of funding that is being led by Singapore investment company, Temasek, with participation from existing investor Vy Capital. It will use the investment to further grow its new business verticals.

This takes Zomato’s total funding to ~$ 225 million which comes from a close set of four investors – Info Edge, Sequoia India, Vy Capital, and now Temasek.

Deepinder Goyal, Founder and CEO of Zomato, said, “We will use this round to make investments in our new businesses such as online ordering, table reservations, point of sales, and our newly-launched Whitelabel platform.

With this round, and with some of our markets turning profitable recently, Zomato is well capitalised for at least two years. We are also stoked to have Temasek partner with us and are looking forward to building one of the largest food-tech

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FDI IN FOOD RETAIL companies in the world.”

Bush Foods Bush Foods, which produces and exports packaged basmati rice under the Neesa, Himalayan Crown and Indian Star brands to more than 70 countries, had revenue of $235 million in FY 2012.

“We will use these investments to grow our brands both in the domestic as well as the international markets,” Virkaran Awasty, chairman and managing director of Bush Foods, said in a statement.

According to United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2015, India acquired ninth slot in the top 10 countries attracting highest FDI in 2014 as compared to 15th position last year.

The report also mentioned that the FDI inflows to India are likely to exhibit an upward trend in 2015 on account of economic recovery. India also jumped 16 notches to 55 among 140 countries in the World Economic Forum’s Global Competitiveness Index that ranks countries on the basis of parameters such as institutions, macroeconomic environment, education, market size and infrastructure among others.

India will require around US$ 1 trillion in the 12th Five-Year Plan (2012–17), to fund infrastructure growth covering sectors such as highways, ports and airways.

This would require support from FDI flows. During 2014, foreign investment was witnessed in sectors such as services, telecommunications, computer software and hardware, construction development, power, trading, and automobile, among others.

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NEWS

A.P government to stop incentives to edible oil refiners at ports in states like Odisha, Tamilnadu and Karnataka, which too started growing local capacities.

Citing the over capacity issues, the Krishnapatnam Edible Oil Refiners Association had itself appealed to the state government to stop incentives to the units some time ago. Based on these concerns the state government has now put the industry in the negative list.

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ndhra Pradesh government has decided to do away with tax incentives for new units as excess capacity stifled the existing units.

In AP new edible oil refining units were eligible for a reimbursement of VAT at 2.5 percent for big units 3.75 percent for medium size units and 5 percent for smaller units under the Industrial Policy 2015-2020.

"For an industry that operates on a thin 1-2 percent margin, AP government's tax incentives make a huge difference.

That is why several people had set up their refining units here only to face a problem of excess capacity later on," Pradip Chowdary, founder and managing director of Gemini Edibles and Fats India Private Limited (GEF India) said while welcoming the government's decision.

His company runs a 800 tonnes per day capacity refining plant at Krishnapatnam port.

Port-based refining units, which process the imported edible oil and sell it in the country, were estimated to have a total

installed refining capacity of 15-16 million tonne per annum as against the average annual import of 12-12.5 million tonnes of edible oils, primarily palm oil.

Of this, at least 2 million tonnes of refined oil is directly coming into the country, according to the industry sources.

Encouraged by the government tax incentives, units with a total refining capacity of 4 million tonnes have come up in Andhra Pradesh at the two private deep water ports of Krishnapatnam and Kakinada on the east cost in a short span of time. Large port-based edible oil refining capacity also exists in states like Gujarat and Maharashtra, though no tax incentives are given to the new units by the respective state governments any more.

As the undivided AP had accounted for a consumption of around 1-1.2 million tonnes of imported edible oil, the private port-based refiners have expanded their markets into the neighboring

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"The association stated that there is excess edible oil refining capacity in the country and more particularly in the state of Andhra Pradesh and several existing units with a refining capacity of 1.2 million tonne capacity have already been declared as non performing assets by the banks.

Under these circumstances, attracting investments into the refining sector with 5 percent VAT reimbursement will only aggravate the problem and the existing refining units will be be able to function," AP government said in its orders.

Another 18-19 million tonne refining capacity exists in the hinterland of India which mainly depends on the domestic production. Lack of growth in domestic edible oil production and the practice of consumption of predominantly nonrefined edible oils like mustard posing problems to the hinterland refiners, according to Chowdary.

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Emami Agrotech to invest Rs. 300 Cr in Haldia

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mami Agrotech, a part of the Emami Group, will invest Rs 300 crore for expansion of its edible oil refining capacity by 1,000 tonnes per day (tpd) at its Haldia plant in West Bengal, said group's Director Aditya Vardhan Agarwal.

at Haldia and Krishnapatnam (in Andhra Pradesh). The Krishnapatnam unit has a

Agarwal said the expansion is expected to be completed by end of this year and this will make our Haldia facility the largest single location edible oil refinery in India.

"We aspire to become the number two edible oil manufacturer in the country and increase our market share in the Indian edible oil industry from the present 5.5% to 10-11% by 2018," said the group's Director, Manish Goenka after the foundation stone laying ceremony for expanding capacity at its Haldia unit.

The expansion will also include setting up of a 7.5 megawatt captive power plant.

The company has invested Rs 700 crore in the plant already, and with the Rs 300 crore, total investment in the plant will be Rs 1000 crore.

The stone was laid by Suvendu Adhikari, West Bengal Transport Minister, along with directors Goenka and Aditya Agarwal.

"With the expansion of the Haldia unit at an investment of Rs 300 crore, the capacity of the plant will increase by another 1,000 tpd, taking up its total capacity to 4,000 tpd," Agrawal explained, "Our present manufacturing capacity in edible oils is around 4,000 tpd between our two plants

environment clearance for new industries was lifted by the Centre in 2013.

production capacity of 1,000 tpd, while Haldia unit produces around 3,000 tpd."

The minister said around Rs 10,000 crore investment has come to Haldia in the last one year after the moratorium on

The company will come up with two new plants near Kandla port in Gujarat and Karnataka in a little over a year, a company statement said.

The investment in the plant near Kandla port will be around Rs 300-350 crore, Agarwal added. According to the company, one mustard plant is also in the offing in Rajasthan.

Fall in Palm oil import continues

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alm oil imports by India probably fell for a third month in July as some buyers switched to soybean

median of five estimates in a Bloomberg survey of processors, brokers and analysts. Total vegetable oil purchases fell 25 percent to 1.13 million tons, while soybean oil imports rose 1.4 percent, the survey showed. The Solvent Extractors’ Association of India is set to release import data in the middle of the month.

Soybean oil imports increased as its premium over palm declined, said Nagaraj

Meda, managing director of Hyderabadbased TransGraph Consulting. Traders held off buying palm oil given that there were adequate edible oil stockpiles at ports, he said.

Total cooking oil stockpiles in the world’s biggest buyer were at 2.32 million tons on July 1, from a record 2.51 million tons in January, association data show.

Palm oil futures in Kuala Lumpur fell into a bear market last month amid weakening demand including from China, where imports slumped 25 percent in first half.

Soybean oil’s premium over palm oil

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dropped 11 percent in July, the most since March, according to data compiled by Bloomberg.

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Rajasthan attempt to make India self reliant in edible olive oil

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overnment of Rajasthan has imported 100,000 saplings of olive plants from Italy, Spain, Israel etc. for replanting in the stateowned field on experiment basis. to make India self reliant in edible olive oil. The attempt is to make India self reliant in edible olive oil.

Speaking on the sidelines of the road show organized by the government of Rajasthan on its upcoming event “Global Rajasthan Agritech Meet (GRAM) to be held between November 9 and 11 this year, Prabhu Lal Saini, Minister of Agriculture, Horticulture and Animal Husbandry, Government of Rajasthan, said: “The agro climatic condition of Rajasthan suits plantation of olive plants which we want to exploit for long term

sustainable basis. We have imported 100,000 samplings of olive plants and re-planted around half of that in 5,000 hectares of land. This will reduce our olive oil import.” tOlive oil is the highest priced edible oil in India ranging between Rs 850–1200 a kg and imported primarily from Italy, Spain and Israel. In summer, the olive plant requires 47 degrees celsius of heat while in winter minus 6-7 degrees celsius of cold climate is needed. Rajasthan enjoys this type of temperature diversity.

Hence, olive plants can comfortably be growth in the state. However, the minister urged governments in the neighbouring states to join hands to grow olive plant in India to increase its availability, which will automatically help reduce prices.

“To support oil initiative in olive plantation, the government has set up a refinery also,” said Neelkamal Darbari, Principal Secretary, Agriculture and Horticulture, Government of Rajasthan.

Data compiled by the Olive Oil Association (OIA) showed India’s imported olive oil at 11,254 tonnes for the FY16 as against 12,621 tonnes in FY15.

According to the V N Dalmia, Founder President of OIA, the government of

Rajasthan lacks technology for converting olive fruits into oil. The government plans to sell crude olive oil which requires refining to make it edible. The olive plants which start yielding fruits in three years require a modern refinery with advanced technology adoption from countries like Israel, Italy and Spain, Dalmia added.

Rajasthan, with 25.5 million ha (14% of India’s total) cultivable land, is the leading producer of pulses, edible oilseeds, cereals like bazra and maize.

Apart from that the state produces a large quantity of fruits for processing.

The growth of olive plant in Rajasthan assumes significance in the wake of India’s over 60% of edible oil demand (~23.5 million tonnes) is met through import.

“Apart from that the government of Rajasthan has taken several initiatives to incentivize farmers and industrialists to become a partner in agriculture growth in the state to achieve Prime Minister Narendra Modi’s dream to double farmers’ income by 2022,” Darbari said.

Given the impetus laid on olive plantation, India can be self reliant in olive oil in the next couple of years, the minister added.

KoPT to start commercial transloading from September with SAIL

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he Kolkata Port Trust will begin commercial transloading at the Sandheads from September prior to graduating to total cargo handling.

"We are going to start commercial transloading from September with SAIL. We have been able to become at par in terms of cost with Dhamra port by reducing charges by Rs 200 per tonne for users," Kolkata Port Trust Chairman M T Krishna Babu said today at the MCC Chamber of Commerce.

"Transaloders were ready by the partner Jindal ITF, but our cost was higher by Rs

200 per tonne for users. Now, we have reduced our warfage charges by Rs 50, while Jindals have reduced Rs 100 and another benefit of Rs 40 is available as the cargo is treated for coastal movement.

Now, we are competitive with Dhamra port," he said.

The chairman said the government was focusing on coastal cargo movement and a lot of infrastructure had been developed to pave the way for coastal smooth cargo movement. Krishna Babu also raised the issue of state administration's noncooperation in creating a conducive

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environment to allow edible oil on rail tankers. As a result there is a cost implication to consumer of Re 1 per litre and threat of adulteration.

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India’s vegetable oil imports may rise to record 15 million

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ountry’s vegetable oil imports may rise to record 15 million tonnes in the current marketing year 15-16 on increasing domestic demand.

"We estimate import of about 1.2-1.3 million tonnes in the remaining three months of the current oil year. So, the overall vegetable oil imports will be 15 million tonnes in the 2015-16," Solvent Extractors Association of India (SEA) Executive Director BV Mehta said. The domestic demand is expected to rise to 20-21 million tonnes, he added.

The country had imported 14.61 million tonnes in the 2014-15 oil marketing year (November-October). Earlier, the association had estimated imports to rise at around 15.5 million tonnes, Mehta said.

With rising imports of refined edible oils, Mehta demanded that the difference

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between the crude and refined edible oils should be doubled to 15 per cent from current 7.5 per cent.

At present, import duty on crude edible oil is 12.5 per cent and those on refined edible oil is at 20 per cent.

Imports of vegetable oils (comprising edible and non-edible oils) fell by 24 per cent in July to 1.14 million tonnes due to under utilisation of capacity by the domestic refining sector.

In the first nine months of the current marketing year, vegetable oils imports rose by 5 per cent to 10.9 million tonnes compared to 10.35 million tonnes in the corresponding period of the previous year.

Out of total imports during NovemberJuly period, edible oils comprised of 10.78 million tonnes and 1.15 million

tonnes.

Import of RBD palmolein during November-July period of 2015-16 oil year increased to 19.84 lakh tonnes from 10.98 lakh tonnes in the year-ago period and is expected to increase further in coming months.

"The alarming increase in import of RBD Palmolein is seriously hurting the domestic refining industry. This situation has arisen due to the fact that currently, the landed cost of RBD olein (finished product) is same as that of Crude Palm Oil (raw material).

"Due to this situation, the domestic refining industry is facing severe crisis of under utilisation of capacity and is on the verge of closure," SEA had said earlier this month.

Edible oil refiners seek duty cut on raw materials

ndian refiners of edible oil have written to the Prime Minister, requesting to cut the duty on their key raw material to 5% from the current 12.5%. It has also sought retaining the current 20% duty on refined palm oil imports.

Group of Indian refiners of edible oil The Solvent Extractors' Association of India demanded cut in the import duty on crude palm oil, which they said will offer the local industry a level playing field at a time when imports of refined products are growing at a quick pace.

"In the last budget, the import duty on palm stearin and palm fatty acid distillate was reduced to nil," said an industry representative. "While the import duty on these byproducts was made nil, the duty differential between crude and refined oil was retained at 7.5%, thereby making the refining route of crude more expensive than direct import of refined palm oil."

Palm oil exporting countries levy a 12% duty on crude shipments and 5% on refined oil to protect their domestic industry. When the local import duty is added to this, say Indian refiners, the cost becomes heavy for them.

"It (cutting duty on crude imports) will not affect the government's agenda of checking inflation as the prices of edible oil will not be impacted," said BV Mehta, the association's executive-director.

The local industry is worried about increasing imports of refined palm oil in India. The share of imported refined oil has now reached 32% of the total import of palm oil, Mehta said, calling it the "highest percentage" in recent years. This trend is expected to gain momentum due to forthcoming festival season, Mehta said.

The share of refined palm oil in total imports was 18% in fiscal 2014 and 20%

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in the year before that.

"The refineries importing crude palm oil are barely managing to recover variable cost. The entire fixed cost, interest on capital expenditure, depreciation and profit are left uncovered," Mehta said.

"In such circumstances, no refinery can sustain or survive."

Refiners are on the edge as the landed cost of crude and refined oil is almost at par, a refiner said. "Cheap refined oil imports will push most refiners into the red."

The industry is also looking at greater volumes of byproducts in case the import of crude palm oil is increased. Byproducts like palm stearin and palm fatty acid distillate are key raw material for the chemical and soap industry. Some of the byproducts are used for the manufacture of vanaspati, bakery shortenings and margarine.

NEWS

54 www.agronfoodprocessing.com

Centre asked states to remove taxes on essential food items

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n order to ensure adequate availability of pulses, among other steps to ensure supplies at affordable prices, Government has asked the states to remove all local taxes on essential food items edible oils and other essential food items at reasonable prices.

Ministry of Consumer Affairs, Food and Public Distribution has asked the states to take up the market intervention on a real time basis and to review APMC Acts on priority to delist pulses and other essential food items so that farmers can sell their produce at any place of their choice, minimising stages of supply chain from farm gate to ultimate consumers.

The ministry said it will ensure reasonable prices for consumers and also fetch better prices for farmers and implement the Price Stabilisation Fund Scheme for market intervention to enhance availability and check prices of essential.

States have also been requested to consider a pricing policy for pulses and such other

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essential food items under Section 3(2) (c) of the Essential Commodities Act and to make it enforceable for all the stake holders to cap the prices of essential commodities.

States have also been requested to keep a close watch on hoarding and black marketing of essential commodities in view of coming festival season. Besides regular raids, strict action should be taken against the habitual violators and speculators under the EC Act and PBMMSEC Act which provides for preventive detention up to six months.

It said states may also consider creation

of a dedicated Force under the Essential Commodities Act, on the lines of Tamil Nadu Civil Supplies Crime Investigation Department, for effective operations against hoarders, blackmarketeers, profiteers and unscrupulous traders or speculators of essential commodities.

States have been asked to create a robust Information Management System of prices, production, availability, unscrupulous trading, hoarding, and black marketing and to strengthen the Price Monitoring Cells to have the ground zero information available on daily basis and sharing it with all the enforcement agencies of Union and state Governments.

A monthly report on enforcement actions under the EC Act & Prevention of Black Marketing & Maintenance of Supplies of Essential Commodities Act is mandatory to ensure regular review of the same at highest level and to make public the Action Taken Report of States regularly on the website of Department of Consumer affairs.

Pulses from Myanmar to fill demand and supply gap

nion Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan on Thursday said the government is holding bilateral talks are going on with Myanmar and African nations for import of pulses to boost domestic supply. The demand-supply gap reaches 7.6 million tonnes in the country.

The Union Cabinet in the first week of July approved a long-term contract by signing a Memorandum of Understanding (MoU) with Mozambique for import of pulses either through the private channels or Government-to-Government (G2G) sales through state agencies nominated by the two countries.

Paswan said that the price rise will be

there till there is a problem of demandsupply gap. “The challenge of demandsupply gap of about 7.6 million tonnes is being addressed via public and private imports and local procurement for buffer stock creation of 20 lac tonnes", he added.

Minister hoped that the production of pulses will boost this year as the good monsoon hit the country for a good production.

Paswan also urged the state governments to take measures to limit stock holdings and clamp down on hoarding to check the rise in prices.

"States can take action against hoarders and black-marketer's by imposing stock

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limits on traders. We can only give direction to states to take action against hoarders. We cannot do it ourselves because action-taking power rests with the states," he said.

The total pulses production in the country during 2015-16 is estimated to be 17 million tonnes while 5.79 million tonnes of pulses were imported to meet the domestic requirements.

However, the total availability of pulses including domestic production and imports were was less than domestic requirements putting pressure on the prices of pulses during the year 2015-16 and current year.

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NEWS

Youth shifting towards healthy and nutritious snacking: Survey happy, 97% of them prefer to snack on almonds, followed by fruits and other dry fruits," a survey by market research company Ipsos said.

The findings also revealed that 30% of people tend to snack more when under stress, even when they are not hungry.

Interestingly, it found that Mumbai, Chandigarh and Bhopal are least inclined to snack under stress while Bangalore and Hyderabad are most susceptible to stress snacking.

The survey further said that unlike popular perception, a whopping 82% of young and affluent adults polled said they do not feel the guilt after snacking.

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recent survey conducted in 8 Indian cities indicates a positive shift in mindset towards healthy snacking 97% of young and affluent Indians prefer to snack on almonds, fruits and other dry fruits when they are happy.

According to the survey young and affluent adults see their snacks as something yummy, fun, hot and crispy, while also wanting it to be healthy, nutritious and energy inducing.

The survey interviewed a total of 3,037 affluent urban men and women between 18-35 years in Delhi, Mumbai, Bangalore, Hyderabad, Chandigarh, Nagpur, Bhopal and Coimbatore. Among cities, Bangalore (99%), Chandigarh (99%) and Coimbatore (99%) prefer almonds for snacks when happy, the survey showed.

"For majority of young and affluent adults snacking is an expression of happiness.

When young and affluent Indians are

Mumbai leads with 92% saying they do not feel guilty after snacking, followed

by Chandigarh (86%) and Coimbatore (85%).

"This study indicates a trend towards healthy snacking with increasing number of young and affluent adults in urban centres seeing long-term value in maintaining a healthy lifestyle that includes healthy snacking," Delhi-based nutritionist Ritika Samaddar said.

Artificial dyes still in many products for kids

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rtificial food dyes, including Red 40 and Yellow 5, are in 43% of products marketed to children, according to research published in the July issue of Clinical Pediatrics.

Almost all candies had artificial dyes, which were found in 96% of products.

Fruit-flavored snacks had the next highest proportion of the dyes; with 95%.The 810 products sampled for the study were produced by 66 companies. Kraft made 105 of the products, 66% of which contained artificial dyes.

While many manufacturers have put considerable time and investment into developing natural color replacements, there is much work to be done.

The Center for Science in the Public Interest has petitioned the FDA to ban certain dyes, and has submitted more than 2,000 complaints from parents think their children were adversely impacted by the dyes, leading to behavioral problems.

The organization has suggested warning labels that would read: "Warning: This

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food contains synthetic food colorings that may impair the behavior of some children."

However, a certain amount of artificial coloring may always be around. Although the demand for natural ingredients will continue to grow, there will always be a need for a certain amount of what may be described as synthetic ingredients.

Natural colors aren't asstable as artificial colors, and costs of using natural colors can be higher.

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NEWS

Consumers are willing to pay more on natural ingredients: Research

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n a recent survey commissioned

by Lycored, the global leader in carotenoids consumers are willing to pay more on a natural ingredients product. Consumers are happy to pay a premium of nearly 50% for food and drink formulated with natural ingredients.

In the online poll, researchers asked 506 US consumers whether they would be prepared to spend more on a product if it was made with natural flavorings and colors. In total, 88% said they would.

The group of consumers was then told that the average flavored milk beverage costs US$1.50 and they were asked how much they would be willing spend on a product if it was made with natural ingredients.

On average, they said they would pay up to $2.20 – 47% more.

In tandem with its consumer research, Lycored ran a trial to establish the stability of its natural colors following UHT processing, which is commonly used in the manufacturing of flavored milks.

Lycored used two different UHT process technologies to make strawberry flavored milk drinks: direct injection and tubular.

Subsequently, the beverages were subjected to accelerated shelf life tests.

In each case, it was observed that the products made with Tomat-O-Red® RP and Tomat-O-Red® R exhibited excellent

color stability, with no variation visible to the naked eye. By contrast, the color of the flavored milk made with Red 3 varied dramatically from day zero onwards.

The survey also found that the respondents preferred the appearance of natural colors even when they were not told they were natural. The researchers asked the respondents to express their visual perceptions of naturalness when presented with two flavored milk drinks formulated with Lycored’s Tomat-ORed® natural colors and another made with Red 3, an artificial colorant. They were not informed which was which, and were asked to rate them on a 10 point scale in which 0 was ‘not at all natural’ and 10 was ‘extremely natural’.

Christiane Lippert, Head of Marketing (Food) at Lycored, said: “Our research delivers two key learnings. Firstly, consumers are willing to pay significantly more for the reassurance that a product contains natural colors and flavors.

Secondly, they find natural colors more appealing from a visual perspective. For food and beverage manufacturers there is a clear message here: using natural ingredients in formulations will resonate with shoppers and enable you to charge more for your products, boosting sales and profits.”

Lycored also evaluated the performance of its natural colors in tests that replicated the harshest possible conditions during transportation, storage and while on sale in-store. The UHT strawberry milk drinks were exposed for extended periods to 24/7 light (6,000 lux), ambient temperatures of 25°C-40°C (in normal day/night light patterns), and continual incubation at

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40°C (in the dark).

In all cases, the resilience of Tomat-ORed® colorings was demonstrated by little or no variation in the color of the milkshakes they were used in, while the flavored milks made with the artificial color, Red 3, displayed marked variations.

Tammi Higgins, Head of Colorants at Lycored, commented: “Color stability is a priority for food and beverage manufacturers and these tests prove that Tomat-O-Red® natural colors will withstand even the most difficult conditions over an extended period. This eliminates the need for expensive chilled storage and transportation, and reduces wastage. Most importantly, it means brands can be certain that their products will be enjoyed by the end-consumer exactly as they intended.”

Lycored’s Tomat-O-Red® natural red colors are certified Kosher, Halal, nonGMO and vegetarian, and are heat, light and pH stable. Visitors to IFT Expo 2016 are invited to visit the Lycored stand (4457) to learn more.

Committed to ‘Cultivating Wellness’, Lycored is an international company at the forefront of unearthing and combining nature’s nutrition potential with cutting edge science to develop natural ingredients and products. Established in 1995, Lycored is the global leader in natural carotenoids for food, beverage and dietary supplement products.

The company develops and supplies natural ingredient formulations into four main business areas: active health ingredients for wellness; colourings; foodstuff ingredients for taste & texture improvement; and nutrient premixes for fortification. Lycored is based in Israel, with sales & production operations in the UK, Switzerland, the US, Ukraine and China.

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NEWS

Indian Restaurant Congress is back in its 6th edition with new flavours ‘India’s Largest Restaurant Event is Back! (23-24th August 2016)

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veryone in the restaurant and food business is either doing something new or are tweaking their menu and business to meet the customers demand. In the last two years Indian Restaurant industry has seen many innovative and disruptive players capturing the Indian Restaurant industry to enter the #DOTHENEW race.

“6th Indian Restaurant Congress”, themed ‘#DOTHENEW’ will highlight all related topics behind this wave. The conference is scheduled to take place on 29th & 30th August, 2016 at JW Marriott Aerocity, New Delhi, followed by Indian Restaurants Awards on 30th August evening.

The Congress will be attended by more than 500+ restaurateurs and 100+ restaurant industry leaders and chefs.

These stalwarts will also share their journey’s experience and will also going to highlight the current challenges faced

by the sector.

Indian Restaurant Congress 2016 will be chaired by Mr. Riyaaz Amlani, President-NRAI, CEO & MD-Impresario Hospitality & Entertainment who will address the audiences at the Bar Summit, one of the new addition to the congress this year showcasing all the top bar and lounge professionals.

This two day conference will also witness speakers from Government sector Like Shri Pawan Aggarwal, CEO FSSAI and Ministry of Food Processing who will be doing about the demand for elevating food safety in the food and restaurant business.

Also, there is an incredible speaker lineup which is now live, featuring over 30+ Restaurant Business leaders, thinkers and doers from all over the country including AD Singh, MD- Olive Bar & Kitchen, Rahul Singh, Founder & MD- The Beer Cafe, Varun Kapur- ED- K Hospitality

Corp, Unnat Varma, MD- Pizza Hut India Sub Continent amongst other.

Other key highlights: • We’re welcoming some of the most successful Start-ups to Entrepreneur India 2016, including Broaster Chicken, Raw Pressery, Chai Thela, Keventers, InnerChef • Business Investors from world renowned companies such as Everstone Capital, Indian Angel Network, Ivy capital, are heading to speak at the Money Summit.

• Top chefs like Manish Mehrotra, Shaun Kenworthy, Ajay Chopra, SaranshGoila and SabyasachiGorai will talk on the food trends from 2016-2017 • There are 3 headline summits that are taking place for the first time including BAR Summit, CHAI n BUN summit, Fine Dine Summit featuring top players from the segment.

Bengal’s government new scheme for farmers

G

iving a clear indication that farmers benefit is the priority of the West Bengal government has come up with a new scheme buyback deals to engage farmers with the corporate sector, aiming to boost the food processing industry in Bengal.

At a seminar on new opportunities in food processing and horticulture industries in West Bengal organised by Bharat Chambers of Commerce on Tuesday, Abdur Razzak Mollah, state food processing minister, said that the scheme

was different from contract farming, a practice followed by wafer makers Pepsico and ITC in a number of states, including Bengal.

"Farmers interest is being protected while they are being given opportunity to earn more for their produce. But this is not contract farming. It is a buyback arrangement" he said.

Food processing and horticulture minister said: "Producers should tie-up with farmers, indicate their requirements, invest in advance and buy the endproduce back. Their investment may also be in technology and raw materials.

Farmers in our state are talented enough and a simple training session for them will ensure availability of the perfect produce".

Abdur Rezzak Mollah urged processed food units and investors eyeing the sector should opt for tie-up with farmers to get

VOl.11 Issue 11 August 2016

produce of the required standards.

Planning to introduce this arrangement in the milk and meat processing sectors minister said that the state government has already set up 17 Farmers Producers Organisations (FPOs) who can be contacted by investors and producers for can contact d for tie-ups. Under FPOs, investors will tie-up with an organisation of farmers which looks after their interests.

The FPOs that we have set up have a minimum membership of 1000 farmers each and the maximum number is 1753.

Speaking about meat export, the minister said: "Earlier, during the Left Front regime attempts were made to operate slaughter houses in Durgapur and Mourigram but due to apprehension of people that cows will be slaughtered there the projects could not be implemented properly.

58 www.agronfoodprocessing.com

Event Calendar-2016 Months

August 2016 22nd– 24th FI INDIA & HI, New Delhi September 2016 1st-2nd Vita Food Asia Hong Kong 7th–9th FoodPro, Chennai 22nd–24th International Foodtech Mumbai 22nd–24th Annapoorna, Mumbai 28th– 29th Indian Ice Cream Congress & Expo 29th-1st Food Hospitality World, Goa October 2016 4th-7th Tokyo Pack Japan 4th-6th Innopak Spain 5th-6th Easyfairs Sweden 10th-14th Agroprodmash Moscow Russia 11th-14th China Brew & Beverage Sanghai 15th-16th Evenord Germany VOl.11 Issue 11 August 2016

Events

21st-23rd Cake Fest Poland 22nd-25th Sudback Germany 22nd–24th Dairy Feast, Lucknow 25th-28th Cibus Tec Italy November 2016 1st-3rd Foodtech Denmark 2nd-4th Worldfood Kazakastan 2nd-6th Indagra Food Romania 2nd-5th Eurasia Packaging Turkey 9th-12th Interfood & Drink Bulgaria 14th-17th Emballage France 19th–22nd Agro Tech,chandigarh 23rd-24th Packaging Innovations Netherlands 25th-26th Empack Belgium 27th-30th Intervitis Germany December 2016 15th–17th Drink Technology , Mumbai 30TH-1st palmex Latin America Columbia

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