Agri Business & Food Industry-July issue by Media Today Pvt. Ltd.

AgriBusiness & Food Industry w July 2012

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Food Safety

Agri Affairs ...26

...10

Spare a thought!

Let’s protect migrant farm labourers who feed us — Sanjeev Chopra

New Food Safety Act Industry Viewpoint 16 OTAI (NZ) Conference

Food Safety Act promises less Licence Raj: FSSAI

EDITORIAL

Achievement

FM Honours Vijay Sardana for Contribution in Commodity Markets

CEREALS

‘BlackSeaGrain-2012’

CONSUMER BEHAVIOUR

Internet Marketing

– Kangna Chawla

– Anwar Huda

20 Dastur Memorial Workshop

Impact of Food Safety Act on dairy industry

22 Expert view

PUBLIC HEALTH IS MORE IMPORTANT THAN TASTE & COST, SAYS VIJAY SARDANA Cereals

...28

Global Grains World rice output touches new high: FAO

Growing role of Black Sea countries in global agri business

The need of the time for food processors & retailers pRESS RELEASE

Asia Fruit Logistica 2012

Focus on Fruit and Vegetable Marketing in Asia

MACFRUT 2012

The Green Planet of the Fruit and Vegetable sector

RETAIL NEWS

Carrefour aims to capture West, South

43 CORPORATE NEWS l

Mexico wants to export avocado to India

FOOD & BEVERAGES NEWS

Amul to make large chocolate bars

52 MARINE NEWS

AgriBusiness & Food Industry w July 2012

DAIRY NEWS

Govt removes ban on export of milk powder

Meat Industry ...10

AgriBusiness & Food Industry w July 2012

orial Edit

t is significant that this year the prestigious World Food Prize has gone to Israeli scientist Dr Daniel Hillel, who has pioneered “a radically innovative way of bringing water to crops in arid and dry land regions.”

Chief Editor

S. Jafar Naqvi

Consulting Editors

T.V. Satyanarayanan K Dharmarajan

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M.B. Naqvi

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Editor : S. Jafar Naqvi

Vol 9....... Issue 7 ...... July 2012

It is specially fitting that the World Food Prize Foundation has honoured an individual who understood the critical role water plays in agriculture and the importance of using every last drop efficiently, said U S Secretary of State Hillary Clinton in her key note address at a function in the State Department. Established in 1987 by Nobel Peace Prize Winner and “Father of Green Revolution’ Norman Borlaug, the award is announced every year by a selection committee of experts from around the world, the committee’s present chairman being Prof M S Swaminathan, the first World Food Prize winner. The 250,000 dollar award, to be presented to Dr Hillel on World Food Day in October in Des Moines, Iowa, rightly accords recognition to a path-breaking effort in water saving – evolution of micro irrigation technology. Micro irrigation method is highly relevant to countries like India, whose economy hinges on agriculture. With water getting increasingly scarce, utmost economy in the use of this previous resource becomes essential to take world agriculture forward. Water conservation measures are urgently needed at a time when a burgeoning world population and sluggish agriculture growth in many countries are pushing back the goal of creating a hunger-free world. Besides evolving water saving practices, a series of steps are needed to check waste all along the line – from the farmer’s field to the consumer’s table. Mounting post harvest losses are particularly shocking. Should we not conserve more efficiently what we produce? In India, huge losses of foodgrains occur because of want of proper storage. Wastage of cooked food is equally appalling, particularly in social functions. In this context the Delhi government has taken a commendable step by announcing the launch of India’s first Food Bank aimed at reducing food hunger. The objective of the Delhi Food Bank scheme, announced jointly by Chief Minister Sheila Dikshit and Sam Pitroda, Adviser to Prime Minister on Public Information Infrastructure and Innovation, is to ensure that excess food cooked at social functions does not go waste. Such food, both uncooked and cooked, would be collected from wedding receptions, parties, hotels and individual donors, for which infrastructure would be developed in cooperation with many organizations. The idea is not new, considering that such banks are operational in more than 30 countries globally. The Delhi bank would be part of India Food Banking Network (IFBN), which, as Sam Pitroda put it, is an effort to bring the government, the private sector, civil society and NGOs together to fight hunger and malnutrition. The process of working for Food Banks is simple. On receiving information about a donor (toll-free helpline numbers will be there), the network would contact the logistics partner to collect the donated products from the specified location and deliver them to the warehouse, which would serve a number of feeding programmes. The project has been initiated after a comprehensive three-year feasibility study in the capital city under Pitroda’s leadership. A chain of cold storage and other required infrastructure is being set up for the project. Based on Delhi’s experience, hopefully, more cities would start similar food banks to fight the chronic problem of hunger and malnutrition. Comments are welcome at: mediatoday@vsnl.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “AgriBusiness & Food Industry” editorial board. AgriBusiness & Food Industry does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor

AgriBusiness & Food Industry w July 2012

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Food Safety

New Food Safety Act Industry Viewpoint The Food Safety and Standards Regulations came into force last year as a sequel to the adoption of the new Food Safety and Standards Act that seeks to streamline the entire legislation governing food business. While stakeholders have welcomed the objectives of the Act, they are studying its provisions and the new regulations to understand their impact on various segments of the industry. Through seminars, meetings and detailed discussions, they have many suggestions to offer so as to make the new legislation free of anomalies and confusion. The recommendations by various trade organizations are reproduced here.

AIFPA National Seminar

FSSA’s provisions confusing on Proprietary & Novel Foods

ood industry issues in relation to the new Food Safety Act and the subsequent regulations were discussed in detail at a day- long National Seminar organized in Delhi by All India Food Processors’ Association (AIFPA). The seminar was the result of the

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AgriBusiness & Food Industry w July 2012

involvement and cooperation among key stakeholders– regulatory body, leading scientific organizations, academia, food industry associations and FBOs including small and medium players. The objective was to deliberate on the Proprietary Foods vis-à-vis Novel Foods including Indian Traditional Foods & Ethnic

he Food Safety and Standards Rules and Regulations have left many issues unresolved, says M A Tejani, President of AIFPA. In his address of welcome, Tejani referred to the theme of the Seminar which related to “proprietary foods” covering a vast number of ethnic and traditional foods. He said Past President of the Association Piruz Khambatta has recently sent a memorandum to Union Health Minister Ghulam Nabi Azad pointing out various issues relating to the implementation of the FSS Act and the Rules and Regulations under it. Tejani referred in particular to the qualifications prescribed for the supervisory staff working in the food processing industries. Many of the industries who started as tiny units have grown over the years to much bigger size. Likewise persons who have been working in the supervisory cadre have also grown with the industry and acquired a lot of practical experience. They may not have the necessary qualifications prescribed under the new Act but have rich experience and expertise. As such, their services cannot be dispensed with. Such instances can be found in almost all the processing units in the SME sector. There should be no insistence on the new prescribed qualifications but, if need be, they could be given necessary training. He also cited the case of the large number of Food

Foods facing challenges and opportunities. Dr. U. Venkateswarlu, IAS, Joint Secretary, Ministry of Food Processing Industries inaugurated the seminar, which had about 150 participants from across the country Focus Point Seminar speakers noted that because of change in life style, the dietary habits and eating patterns have been undergoing tremendous change over the years with the result that the consumer is turning to processed foods for convenience, ease in cooking, carrying, and eating etc. Now a days, a number of processed foods are available in the market. These have been broadly categorized/defined sector-wise under (i) Dairy Products and Analogues (ii) Fruits & Vegetables Products (iii) Cereals and Cereal Products (iv) Meat, Poultry, Egg and their Products (v) Fish and Fish Products (vi) Bakery & Confectionery Products (vii) Hard boiled confectionery & chocolates (viii) Sweetening’s including Honey (ix) Salt, Spices, Condiments and Related Food Products and (x) Beverages including Dairy and Fruits & Vegetables

Food Safety

Unresolved issues are many, says Tejani

Inspectors (now designated as Food Safety Officers) who have been working over the last several years but who might not have the necessary prescribed qualifications under the new Act. These persons cannot be thrown out of their jobs, but could be given adequate training under the new law. Referring to the issue of licences at the Central level, he said, applications were piling up, pending disposal. “There has been no response at all from the FSSAI on this issue.”

based. Besides these, there are Organic Foods, Functional Foods / Nutracuetical Foods, Proprietary Foods / Novel Foods, Ethnic / Traditional Foods, etc. Further there are innumerable numbers of Ethnic / Traditional Foods specific to each region of India. Under which category do such foods i.e. traditional/ethnic foods fall? A clear differentiation between Proprietary Food Novel Food and Ethnic or Traditional Food vis-a-vis conducive Regulatory framework may be required. Proprietary & Novel foods in danger At the seminar, it was unanimously felt that the previous Food Regulations and the present Food Safety & Standards Act have tried to define and regulate Proprietary Foods, but the definition of proprietary foods are very broad and is required to be spelt out and clarified properly because there may not be a very clear distinction between the Proprietary Foods & Novel Foods vis-à-vis Ethnic or thousands of traditional foods that have been in production, and are being consumed since centuries in this country. In the

AgriBusiness & Food Industry w July 2012

Food Safety

Food Safety Act

Punjab Halwai Association's ‘Letter of Worries’ A t the seminar, organised by AIFPA, the Punjab Halwai Association, representing small and medium manufacturers of Indian traditional sweets and savories, has pointed out to the Chairman of the Food Safety and Standards Authority of India that some of the provisions, rules and regulations under the Food Safety and Standards Act (FSSA) could pose a “threat” to the industry. Describing traditional sweets and savories as the “best alternative to biscuits, cakes and chocolates,” the President of All Punjab Halwai Asssociation, Narinder Pal Singh, has made a plea to FSSAI to make suitable amendments to ‘save’ this industry. The association’s main point of contention relates to the new rule relating to use of food additives, besides absence of specifications. . In a communiqué to FSSAI chairman, the association has said that the history of traditional sweets is over two centuries’ old. It was a flourishing business in pre-partition India. The various sweet products were made from milk and ghee in old Punjab and Afghanistan. Customarily, no festival or function is complete without of sweets. The local population in old Punjab used to prepare sweets at home as it was not a flourishing business. But after 1947, the skill was used by those who came to this country and adopted sweet making as a business by setting up small road-side shops and upgraded it to an industry in a span of sixty years. A number of premium products have been developed and added to the kitty. The older people prefer sweets to biscuits after every meal, while others are equally fond of sweets. The present demand is for new shapes, unique taste and low calorie. The requirements also change with the season. The elite sections in urban areas demand sweets in attractive shapes during each festival or function, irrespective of cost. The post-wedding gift of sweets and savories (bhaji, i.e gur parre, shakkar parre, sirni, and savories like mathi etc.) has a special significance. Those from Punjab, settled abroad, have always a special liking for traditional sweets. A few companies have started sending sweets to non-resident Indians through courier services. This speaks volumes for the popularity of Punjabi sweets. The art and skill involved in Jalebi and lmriti are unique and are available in Punjab only, though this skill is being transferred to rest of the country, as also Canada, USA and U.K. The non-dairy sweets have a unique taste and they are enjoyed very much in rural areas as well as among the low income groups. Many people prefer these sweets. Traditional sweets like Karachi Halwa, Sohan Halwa, Dhoda are being manufactured in Punjab and nearly areas by people, using skills inherited from their forefathers in Pakistan and these sweets have a good export market. Keeping all these points in view, the association

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president said, “We request you to consider the needs of sweet & savories makers to make amendments in the said Act.” In support of its case, the association has raised a series of questions alongside the “facts” concerning these sweets and other preparations. ‘Facts on Traditional Sweets and Savories’ & Questions for discussion Use of Food additives Reference able 2. It states that no colour irrespective of its nature, i.e. natural or synthetic, is permitted in sweets based on milk and Carbohydrates. Food Additive i.e. Sodium bicarbonate is not permitted in sweets based on milk and Carbohydrates. Fact no 1 The natural colour i.e Saffron (Kesar) gives the light yellow colour and imparts health benefits that are being used in sweets since ancient times. Question no 1: How will the processor be able to prepare Kesar sweets and other desserts? Impact of Act: Deprives the international guests of Indian taste, beating the purpose of “Incredible India” and causing loss to tourism and exchequer in India. Fact No 2 The non-dairy traditional sweets are mouth-watering products due to their unique taste and appeal due to their bright colour. Question no 2: How will the products like Balushahi and Imriti be prepared without food colour? Impact of Act: This would decrease the list of traditional low cost sweets. Fact no 3 The only method available for the preparation of good Gulab Jamun is with the use of sodium bicarbonate. We have been using sodium bicarbonate for the last hundred years as told by our forefathers and the same technique is being followed. Question no 3. How will the Gulab Jamun be prepared without sodium bicarbonate as this is an essential processing aid? Fact no 4 The clarification of sugar syrup is carried with the help of Citric Acid to make it sparkle.

Fact no 5 Stuffed snacks like paneer pakora, Samosa and Katchori are most preferred evening snacks. Question 5: Stuffed snacks are not specified in any column. Fact no 6 Kachori stuffed with Dal and Onion (Pyaj) with potato gravy is the recent trend and is popular with the Punjabi young generation. Question 6: How can Kachoris with stuffing with dal, khoya and other fillers be prepared in the absence of specification? Fact no. 7 The stuffed snacks have very low shelf life which has been extended with the use of dry mixes. The different variants of kachori product fall in the category of savories, meant for sale for immediate consumption and packed for marketing. Question no 7. How will we meet the specification for two types of products in the same category? Fact no 8 The processing aids are essential for preparation of sweets with good texture and brightness. The milk products get slightly discoloured during the conversion process from milk to Khoya in traditional way for which the processing aid is required to make it bright. Question no 8. How can sweet makers create good, bright and attractive products out of slightly discoloured Khoya? Fact no 9 No wedding is complete without distribution of Indian traditional non-dairy sweets i.e Bhaji.

absence of a proper definition and clarity on ‘Proprietary and Novel Foods’, almost all the Ethnic or Traditional Foods may fall under the category of “Proprietary / Novel Foods” which will definitely hamper the manufacture, trade, growth and development of such Ethnic or Traditional Foods in the country. As far as regulations for such foods are concerned, the same must be transparent, time-bound, cost effective and should encourage and reward innovations. In today’s scenario of having a very long supply - chain management, the food safety for all types of foods including processed foods has become a big and complex challenge. The present Seminar will try to bring out the clear distinction between “Proprietary & Novel Foods” vis-à-vis “Ethnic or Traditional Foods” including proposing transparent Regulations to help the food processing industry to develop and be regulated to avoid confusion at various levels, if any. Confusion & difficulties as thrown by the new Act According to the speakers, though there are a number of issues concerning the interpretation and implementation of certain new Regulations, the latest one regarding prior approval of new food products / ingredient by the Food Businesses

Question no 9: How can these products be prepared in the absence of specifications for the non- dairy Sweets(Bhaji) products like Gur parre, Shakar parre, Sirni etc has not been covered under any category as the style of preparation is its uniqueness of its coating with sugar or gur.

Food Safety

Question no 4: How will the Gulab Jamun syrup sparkle without Citric Acid?

Fact no.10 The winter traditional sweets are consumed by every north Indian due to the health benefits of jaggery, seasame seeds and nuts for about four months. Question no 10: How can the winter sweets be prepared in the absence of specification for Jaggery based Confectionery/sweets or the gur based ethnic sweets like Ghachak, Reuari, Bhuga etc with an addition of gram dal, ground nut, cashew, almonds, pistachio, walnut etc.? Which product specifications have we to follow? Fact no 11 Additives mentioned at E states that artificial sweetener can be used for all dairy and non dairy sweets. Question no.11: Whether It should be presumed that stuffing for Ghujia etc can be made using artificial sweetener and the maximum permissible limit is based on the total weight of final product? Question no.12: Whether the permission for use of artificial sweetener is granted for Gachak etc with the same limit? Fact no 12 New products are being developed and they are in high demand. They are a. mixture of dry fruit-binding agents like starch and sugar, and with addition of flavour Question no 13: Which category covers such products and its standardization with specification?

falling under Central Licensing Authority has created a lot of curiosity, anxiety and perplexity especially amongst the Food Business Operators who are manufacturing and selling Ethnic or Traditional Foods across the country over centuries by using latest manufacturing processes and processing aids etc. Most of the Ethnic or Traditional Foods which are not falling under the Food Categorization System adopted by FSSAI in their Food Safety & Standards (Food Products Standards & Food Additives) Regulaitons-2011 shall be treated as Proprietary Foods and hence may be the subject matter of discussions/ approval at any stage or time of implementation of the Regulations unless their (Ethnic or Traditional Foods & Food Additives)proper categorization under Food Safety & Standards (Food Products Standards & Food Additives) Regulaitons-2011 is not evolved/notified. Though the FSSAI, in the recent past, has issued some clarification/Advisory regarding some of the Traditional/ Ethnic Foods including their categorisation under the Food Safety & Standards (Food Products Standards & Food Additives) Regulaitons-2011 but keeping in view the wide spectrum of Indian Traditional/Ethnic Foods

AgriBusiness & Food Industry w July 2012

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Food Safety

it is very timely to thrash out the various concerns regarding such foods which includes Proprietary Foods or Traditional / Ethnic Foods to arrive at a national consensus which may be in the interest of all the stake holders. Recommendations The Seminar recommendations have been submitted by AIFPA to FSSAI and the Ministry of Food Processing Industries. Some of the main recommendations are as under:1. FSSAI may set up “Industrial cell” to collaborate with FSSAI to develop fast-track regulatory framework. 2. To regularize the “Food-Categorization-System/ Food Code” which must include all the Indian Ethnic/ Traditional Foods so called “Proprietary Foods” like sweets (jalebi, dhoda, gulab jamun, rasgulla, rasmalai, sohan halwa, balushahi, Imriti, boondi ladoo, khoya burfi, peda etc….); snacks/savouries (like bhajji i.e. gur pare, shakkar pare, sirni, matthi, samosa, kachori, gajak, revari, dhokla, idli, dosa, upma khandvi, phaphada, besan papdi etc….) to consider them at par with the existing Standardized Products mentioned under the FSS (Food Products Standards & Food Additives) Regulations2011 i.e. no need for Prior-Approval etc. for such food products. 3. To develop and notify the regulatory framework for Nutraceuticals / Foods for Special Medical Purposes (FSMP) / Foods for Special Dietary Purposes (FSDP) as soon as possible and link it to licensing for such foods. 4. There is a need for the extension of time beyond 5th August, 2012 for conversion/renewal/new Licences under the Regulations as lakhs of Licence applications are pending to be issued by Central/State Authorities. The Seminar was extremely useful to Entrepreneurs, Food Manufacturers, R&D Institutions, the Regulators and the policy makers. After the address of welcome by M A Tejani, President, AIFPA, a Special Address was made by S S Aggarwal, Chairman, Bikanervala Foods Pvt. Ltd. The Keynote Address was delivered Dr. A. S. Bawa, Retired Director, Defence Food Research Laboratory, Mysore. In his Special Address, Bikanervala Chairman spoke eloquently about issues currently concerning the food industry, and how to deal with new Food Safety Act. He presented his points in detail and talked about future and existing qualities of foods. Theme The main theme of the seminar was to bring out clear distinction between Proprietary Foods, Novel Foods vis-à-vis Indian Ethnic/Traditional Foods including proposing transparent Regulations to help the Regulators and the food processors to avoid confusion/complexity because the previous Food Regulations and the present Food Regulations under FSS Act- 2006 had tried to define and regulate “Proprietary Foods” but the advisory issued by FSSAI regarding prior-approval of all Proprietary Foods before they are licensed have created a lot of anxiety and complexity with the results that the situation

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warranted that all the stakeholders may deliberate and suggest solutions on the issues at the earliest for the benefit of all the stakeholders. Technical Sessions & Presentations Experts from the Industry and Trade made presentations in the both the sessions to bring out the clear distinction between Proprietary and Novel Foods vis-à-vis Ethnic or Traditional Foods. Efforts were made to propose guidelines for the Food Business Operators and the Regulators, so that there is a proper understanding between all the stake-holders as far as their manufacture and regulations are concerned for the speedy growth and development of Indian Food Industry, both for domestic consumption and exports. The event had two technical sessions to address the issues born out of the new Food Safety Act. Remarkable presentations and discussions were made at the seminar. 1st Session Chaired by Dr S K Saxena, Director, EIC, co-chaired by Eric Soubeiran, Director, Danone India, and moderated by Dr S Jindal, Former President, AIFPA, the first session was on “Proprietary Foods – Status, Innovation & Development”, with following topics, and speakers: * Shreya Pandey, Member, T & FRAC, AIFPA spoke on ‘Codex perspective e.g. food categorizations system, GSFA, Codex taking horizontal approach and not setting more standards’. *Parna Dasgupta, Head, Policy, regulatory & External affairs (R&D), made a thoroughly engaging presentation on ‘Global Regulatory Framework, Nutraceuticals, Novel Foods’. Through her presentation, she talked about quality standards in traditional foods and world quality parameters, and how to remain in sync with prevailing time to compete well as well as protect public health without losing original qualities and taste of the traditional foods. * Dr Prabhakar Knado, Chief R&D, Mother Dairy, New Delhi, and Pradeep Jain, General Secretary, Shree Mumbai Mishtann Vyavasai Sahakari Mandal Ltd., Mumbai, spoke on ‘Overview of Indian Food Industry, Business potential, Food-a heritage of Indian (all proprietary foods),Challenges and Opportunities - BCG being tried’. 2nd Session The second technical session on “Non-Standardized Foods – Challenges and the Way Forward” was chaired by Dr B Sesikeran, Director, NIN, co-chaired by SB Dongre, FSSAI, and moderated by KL Gaba, Chairman, T&FRAC, AIFPA. It had following topics and speakers: * Pradeep Chakraborty, Director, FSSAI, spoke on ‘Current challenges – regulator’s Perspective to regulate nonstandardised products (Proprietary Foods) and Novel Foods’. * Uday Kumar Saxena, Consultant, UK Solutions, made a presentation on ‘Licensing options to regulate food products through categorisation system vs. individual foods * Prabodh Haldo, Head, PIM, Marico, spoke on ‘FSSA Licensing: Status & way forward * Narinder Pal Singh, President, Halwai Association Punjab, Ludhiana, spoke on ‘Way-forward for Proprietary Foods / Novel Foods’. n

AgriBusiness & Food Industry w July 2012

Food Safety

OTAI (NZ) Conference

Food Safety Act promises less Licence Raj: FSSAI – Anwar Huda

FSSAI Chairperson Chandramouli (2nd from right) & OTAI (NZ) Presidnet D. Mathur (2nd from left) inaugurating Seminar while Dr. Madhavan (FSSAI Asst. Director) & Ashwani Sharma, OTAI -NZ, Secretary are looking on

“E

verybody, including you (Oil industry personals), is a consumer, and public health is of utmost importance, which must be protected. FSS Act, 2006 aims to achieve this national goal”, said K. Chandramouli, Chairperson, Food Safety and Standard Authority of India (FSSAI). He was delivering the inaugural address at one-day conference on ‘Registration and Licensing for Food Business Operators in accordance

with the procedures of Food Safety and Standard Rules, 2011’, organized by Oil Technologists Association of India (North Zone) in New Delhi, on June 12. FSS Act was introduced in 2006, passed by the Parliament in 2009, and was implemented in August 2011. The last date of getting licenses is set as 5 August, 2012. The extremely fruitful seminar was attended by nearly 100 delegates coming mostly from oil industry, and related sectors such as food test labs. Prominent among them were M K Vaidh from Ruchi Oil, and Dinesh Rathore from Mahesh

AgriBusiness & Food Industry w July 2012

Edible Industries Ltd. The speakers included Dr A Madhavan, Asst. Director, FSSAI, D. Mathur, President, OTAI (NZ), Prof R. K. Trivedi, HGS, OTAI-India, DS Yadav, Deputy Director, FSSAI, Monika Rawat, Senior Asst. Director at Federation of Indian Chambers of Commerce and Industry (FICCI)- Policy & Regulatory Affairs. The seminar was moderated by Ashwani Sharma, Secretary, OTAI, NZ. OTAI (NZ) President welcomed the speakers and delegates, while Chandramouli inaugurated the event in the presence of all who were there. The very interactive session brought on-the-spot results, as the Chairperson of FSSAI promised to accommodate the valid demands of oil and food industries, and modify the rules in the Act. The hallmark of the conference was the humility and high talent and amazing expertise, displayed by everyone. Delegates and speakers showed such bonhomie and appreciation for each other that it did not appear to this correspondent being in a conference, but as if in a classroom attending a nice, fruitful discussion. Inaugural Address Emphasizing the need and virtue of the FSS Act, 2006, the Chairperson, FSSAI, said that the Act, which has been in the making for six years, promises less of License Raj, and more space for a coordinated attempt between the Government and Food Business Operators (FBOs). He appealed all the present delegates and every FBO to apply for the license and not fearing about the date-5th August, 2012. “We are very open-minded and ready to accommodate your valid demands”, he said, and told them that this Act is an encompassing Act which has annihilated the multiplicity of laws. It is, Chandamouli said, like a single window process that has ended a reign of confusion. “I have just joined FSSAI, and my first job was to make it simple and flexible, so that FBOs may not face any problem in doing paper works and getting the licenses. The Act takes away much of the powers from Food Inspectors as it promotes self-regulation at every step of the supply chain”, he said amid great attention bestowed by the mature and calm delegates.

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Food Safety

D. Mathur & Ashwani Sharma

Adulteration and contamination cannot be allowed to go, he said. “All FBOs including Rediwalas and Chaatwalas have to get them registered and maintain acceptable standards of hygiene. The overarching Act is not meant to create scare among FBOs, but to inspire them to protect public health”. Accepting the huge challenge of getting registered a mind-boggling number (over 5 crore) of small, medium and large FBOs, he said, “I agree about the huge challenge since India is a big country. This has led us to work on online system of filing for the license. But the Act is unique, as for the first time, there is an Act which includes smallest of the players as well as the biggest ones under one umbrella”. Answering the turbulent questions about the peskiest issue “State Vs Central Licensing”, he said the clear conditions and qualifications have been given in the Act to enable a FBO to know whether he falls under the preview of State or Central Government. To further ease the process, he said, FSSAI has done a revolutionary thing-okaying private food test labs to carry out tests for the FBOs. Giving example of exports, he said that as foreign nations do not accept a food item if it does not meet high global standard, India should also reject imported food items if they do not meet the same standards. “As we import 60 per cent of our oils, and a lot of fruits and other food items that inflate the import bill to Rs 2 to 3 Lakh crore, this Act becomes even more essential for us. And the same standard should be applicable for local food items as everyone’s health is vital”. The purpose of the Act, FSSAI Leader said, is to promote clean health practices

Chandramouli

by following strict standards of hygiene at every step of the supply chain. Hence, even the transporters, re-lebellers and storage owners need to get the license. Allaying the fears of the need of too much documentation, and chances of running from pillar to post for availing the license, he said that he has been personally involved in making everything simple, so that FBOs can get the license in a hassle-free manner. The Chairperson suggested the delegates to make a small group under OTAI and write down their concerns, suggestions and doubts, and give it to him later. So that, the adjustments, whatever are possible, can be made. The delegates, apparently, felt relieved.

Dr. Madhavan

He also promised delegates that some Acts, which are left, would be included in the FSS Act. Vote of Thanks The vote of Thanks was delivered by Ashwani Sharma, who lauded the binding qualities of FSSAI Chairperson. Sharma, who has been instrumental in bringing all the delegates and FSSAI representatives under one roof, and who has contributed a great deal to the advancement of oil industry in India, appreciated the will of both parties to reach mutual understanding, and thanked everyone for investing time in this useful seminar.

Adulteration and contamination cannot be allowed to go, FSSAI Chairperson said. “All FBOs including Rediwalas and Chaatwalas have to get them registered and maintain acceptable standards of hygiene. The overarching FSS Act is not meant to create scare among them, but to inspire them to protect public health” “OTAI can play a catalystic role in this process to let the two parties reach mutual understanding and sort out the issues”, he said. He also added at the end of his promising address that FSSAI has managed to bring down the issues, but the enormity of the sector is bound to create some practical difficulties. “The Act ensures that the food we eat is sanitized, clean and healthy. We have to work under the aegis of the Act to make it work. FSSAI wants you to move forward, not backward”, he said.

Lectures & Interactions Post inaugural address, FSSAI’s Dr Madhavan and DS Yadav spoke on the following topics: *Process of registration for obtaining the license under FSSAI *Quality assurance, maintenance issues for FBOs after getting the license *Quality assurance, regulations and monitoring required for the license under FSSR, 2011 Well-aware, almost knowing all

AgriBusiness & Food Industry w July 2012

Food Safety

Delegates at the Seminar

the nuts and bolts of the Act, the two FSSAI representatives convincingly answered the difficult questions raised by apprehensive oil players, and succeeded to a great extent to remove their doubts. They found appreciation and applause from all the present delegates for showing uncommon brilliance and authority of knowledge about the Act.

following the rules given in the Act”, he said. DS Yadav said that if FBOs keep their units clean they are following the true spirit of the Act. ”It is all about self-motivation, as everything cannot be described in an Act”, he said. But he also added that FSSAI has no problem to make it descriptive, and asked delegates to help FSSAI to make it so.

Transporters’ Concerns They tried to address some of the hardest problems like convincing transporters to get the license, and clearing doubts of the delegates about State Vs Central Licensing issue. The delegates told them that transporters are not convinced and if they will not go for the license. They cannot complete all the formalities and rules. Some delegates also raised concern that it would increase the cost, as a vehicle which is used for carrying food items cannot carry non-food items. Terming transporters segment as ‘grey area’, Madhavan said that FSSAI is open to sort out all issues concerning this important segment of the supply chain. He also said that only those vehicles, that carry milk, oils and meat, would be banned from carrying non-food items.

No License No Business To remove the confusion among delegates, Madhavan made it clear that all the stakeholders in the supply chain (Transporters, Store house Owners, RePackers etc) must have the license. This is the only thing that is truly mandatory, because without it, the purpose of this Great Act will be defeated. But he also acknowledged that difficulties will arise at the time of implementation “Jaisa implementor, waisa implemented”. He used this term to make it clear that the Act can be implemented in its true spirit only when implementation officials are of high caliber and very public-health conscious, as well as cooperative and open to ideas.

Self-regulation Dr. Madhavan said that the Act is all about self-regulation, and it should not be considered as harassment. “In fact, it has been designed in such a way that FBOs will face almost negligible harassment that is usually meted out by Food Inspectors. There is a provision where a FBO can file a complaint about such cases if he thinks his papers are okay, and he is

Flexibility FSSAI representatives also told delegates that leniency will be given wherever it can be. For instance, villages and small towns’ Kachchi Ghani Sarso Oil operators, who cannot afford to install high-value machinery, will be allowed to operate, but they must be held responsible in case of any adulteration. Apprehension about not meeting the deadline--5th August—was palpable at the conference. The representatives and even the Chanmdramouli asked FBOs to apply for the license, and not worry about the deadline, as it is not necessary.

AgriBusiness & Food Industry w July 2012

Friendly features of the Act DS Yadav and Dr Madhvan also used PowerPoint presentations to elaborate on the provisions and rules given in the Act. According to them, the Act warrants less paper works, as the system is also available online. The states that are following it vigorously are Maharashtra, Goa, Gujarat and Andhra Pradesh. Maharashtra alone has issued 1, 60,000 licenses so far. Karnataka is also showing interest in online method. “While central licensing is successful due to online method, many states are not opting for it due to lack of fund, and we have asked Central Government to provide us a sizeable budget to implement this Act. It is expected to be sanctioned soon”, Yadav told the gathering. Unified licensing procedure, common application forms and enabling Gram Panchayats to issue registration certificates to petty FBOs are some of the highlights of the Act. Each district will have a DO (District Officer) to issue the license. All DOs will be under State Food Commissioner. Fee & Time Limit Rs 100 is the annual fee for petty Food Operators, as they will not need to get the license, but only the Registration Certificate. Those availing Central License will have to pay Rs 7,500 annually, while those getting State License will have to give Rs. 3000 to 5000 per annum. And in case, any FBO does not get the license/ registration certificate within 60 days, he can start his business. Central Vs State Licensing All importers must have Central License no matter how much is their turnover. Any FBO having operations in two states should also opt for this license, or those whose turnover is above Rs. 12 Lakh, or daily output is above 2 MT. The turnover or processing capacity will decide the type of license. Yadav said that many documents have been made optional to ease the entire process. Answering a question, he said that re-lebellers must have the NOC from the manufacturers from whom they source their materials; otherwise they will be held responsible for any harm a consumer may face due to consuming his product. Other mandatory rules under the Act include compulsory health check-

Food Safety up of all employees who come in contact with food, and details of qualifications of technical personnel. These two things should be made available by the FBOs at the time of inspection. Inspection checklist is available on FSSAI website. Yadav said that even if inspectors are not satisfied with an FBO, they cannot say “You cannot get the license”. They would advise him to bring changes and provide him an Improvement Notice, so that he may not get discouraged. “Nobody will be denied a license, if he follows the rules”, he said. Provision for Recall The Act’s special qualities are: independent regulation, single window process, less inspection. “It is preventive, transparent, scientific-based system”, Madhavan said. Recall of unsafe food is another new feature of this Act, which means an FBO can recall his food products if he thinks they are not up to the mark. The system is followed by car makers globally. It inspires confidence among customers, enhances brand value, and is a kind of self-regulatory practice. Accreditation of private labs Water will be tested by a lab only if it is used as an ingredient in the processed food. Lamenting the utter inefficiency of Government labs and their sky-high secret fees, Madhvan said that top private labs have been authorized by FSSAI to test the samples. “This move has received big applause from all medium and large FBOs, as these labs’ fees are reasonable, and they deliver the results fast”. Allaying the fears of the harassment by the State Food Inspectors, Madhavan said that they are not allowed to inspect unless authorized by the Central authority. In case they do, FBOs should report the matter directly to FSSAI head office. Food Safety & Management System Monika Rawat spoke on the ‘Role of FSMS in FSS Act’. She, through her power-point presentation, tried to increase the awareness about Food System Management System (FSMS), which is a scientific method to achieve the objectives enshrined in the FSS Act. She focused on health and hygiene and how to make a food processing unit a

safe, germ-free place. ”Adequate control throughout food chain is essential, so that the consumers do not get sick”, she said. She added that there are factors that make it mandatory for India to go in sync with the prevailing global standard. World trade’s need of international harmonization is such a factor. “It is the social responsibility of FBOs to keep their premises, employees and food in clean and healthy sate”, the young lady, who has done around 300 audits, said. According to her, internal audit is more valuable. Regular health check-ups and in-house monitoring is a key to achieve the national health objective. She also elaborated on oil tests such as Nots, crop and metal contaminates and acid value tests. Later Madhavan and DS Yadav spoke on packaging and labeling. Madhavan said that everything should be legible on the food packs and it should not be misleading. A health claim cannot be printed without a scientific support. Correspondent’s Recommendations Everybody has a social responsibility, and so does a journalist. This Correspondent and News Editor of Media Today also gave in written two suggestions to DS Yadav of FSSAI: 1-PET Code, which is printed at the bottom of plastic bottles, should be printed on the main body, accompanied with a minor definition of the code, and whether it is harmful or not. 2-“And other edible oils”, which is printed on the food packs, is wrong. All ingredients of these oils should be mentioned, and whether it has Bt cottonseed oil, as 90 per cent cotton produced in India is Bt cotton. Yadav was responsive to the ideas, and assured this correspondent for the inclusion of the same into the rules of the FSS Act. Battle against Trans Fats Talking about the Trans fats, Madhavan said that Trans fats are more harmful than fatty acids. The acceptable level should come down to 5 per cent. “Slowly, we will achieve this figure”, he said. He also informed the delegates that Trans fats are totally banned in the Netherlands. Delegates’ apprehension about the

fate of their lying old stocks came to the surface, but Madhavan said that the same can be sold up to six months after August 5. A delegate from Haryana raised the issue of loose oils, and how these street-smart manufacturers are using adulteration to sell mustard oil at Rs. 60 per Kg, while genuine oil makers find it tough to procure the oil at even Rs. 80 a Kg. He was supported by other delegates as the issue is a common torturer. Madhavan assured him that due actions will be taken against such predatory players. End Note Dinesh Rathore of Mahesh Edible Oil Industries Ltd read the end note, praising profusely the two representatives of FSSAI for their in-depth knowledge, openness, and their willingness to accommodate the suggestions of the FBOs and oil industry players. But he also added that the task at hand is too big to handle, as each year many lakh new FBOs come to the scene. And so far around 20 lakh players have applied for the license. “I suggest FSSAI to outsource this licensing process, as Indian Government has outsourced passport making to TATA. Government should control only”, he advised. He also praised FSSAI for appointing private labs for food test. He also said that people of India should change, so that brands may change. For this awareness is vital. President’s thanks & thoughts OTAI (NZ) President thanked everyone for participating and making the seminar a roaring success. He suggested FSSAI to allow blending of more than two oils. He also advised that instead of printing nutritional value per 100 gram, it should be printed as per the amount inside the container. And that is a great healthy idea as it would have a psychological impact upon consumers. He also praised FSSAI approach, calling it dynamic, positive and modern. But he also cautioned it to verify a scientific research before following it, as it affects the prospect of entire industry. n

AgriBusiness & Food Industry w July 2012

Food Safety

Dastur Memorial Workshop

impact of Food Safety Act on dairy industry

he impact of Food Safety and Standards Act on food industry, including dairy, was discussed in detail at a Workshop in New Delhi, held in honour of Dr N N Dastur, former Director of National Dairy Research Institute in Karnal. The Workshop, organized by Indian Dairy Association (South Zone), in association with CQM Quality Management Pvt. Ltd, New Delhi, was attended by about 75 participants representing dairy industry along with dairy professionals, members of IDA, students and entrepreneurs.

Inaugurating the Workshop, Dr A.K.Srivastava, Director, NDRI Karnal, stressed that food safety is the requirement of all consumers, and it should not be construed as being relevant only to products meant for export. While elaborating on the importance of quality and food safety, he described milk as complete natural food. Getting deeper insights into the Food Safety and Standards Act becomes vital, he said, and hence the present Workshop is highly relevant and most timely. Dr Satish Kulkarni, Chairman, IDA SZ, welcomed the dignitaries and the participants. He said that IDA South Zone has been organizing the

AgriBusiness & Food Industry w July 2012

Endowment / Memorial lectures since last year in honour of dairy doyens, and this was the third in the series. He pointed out that Dr Dastur was a towering personality in the field of Dairy Science and hence the Association thought it appropriate to organize a Workshop in his honour. Dr PA Shankar, Former Director (PGS), KVAFSU (Karnataka Veterinary, Animal and Fisheries Sciences University), Bidar & Chairman, Programme Sub-Committee of IDA â&#x20AC;&#x201C;South Zone, gave a brief profile of Dr N.N. Dastur highlighting his professional accomplishments and contribution to dairy industry. Dr Shankar stated that

Food Safety Inaugurating the Workshop, Dr A.K.Srivastava, Director, NDRI Karnal, stressed that food safety is the requirement of all consumers, and it should not be construed as being relevant only to products meant for export

Dr Dastur was a renowned Dairy Scientist in the field of Dairy Chemistry and quality assurance and the Workshop organized in his memory and honour is a befitting tribute to him. Dr G. Srinivasan, Deputy Director, Food Safety & Standards Authority of India (FSSAI), Chennai delivered the keynote address on the topic â&#x20AC;&#x2DC;Relevance of Food Safety and Standards Act 2006â&#x20AC;&#x2122; in the functioning of food industry in the domestic & international context. Raghu Guda, General Manager, NISG, Hyderabad made an interesting presentation focused on licensing and registration process in the context of FSSA 2006. Ujjwal Kumar, Country Head, CQM Quality Management Pvt. Ltd., New Delhi, presented useful information pertaining to FSMS, Food recall plan and product approval process. Alok Malik, Consultant, IRQS, New Delhi gave a detailed account of the role of certifying agencies in FSSA and functioning of IRQS. The presentations were followed by interaction of participants with the speakers for clarification. Dr A.K. Srivastava, NDRI Director, in is concluding remarks, appreciated the efforts of the organizers in holding such an important Workshop. He was all praise for the excellent presentations of the various speakers. Dr P.K. Dixit, Secretary IDA South Zone, proposed vote of thanks, while Dr B. Surendra Nath, EC Member of IDASZ, was the Compere for the event. S. Jafar Naqvi, Chief Editor, Media Today Group that is organizing DairyTech 2012 in Bangalore was also present. He distributed to the participants some of Media Today publications and informed them about the forthcoming event to be held on 25, 26 and 27 August, 2012 in Bangalore.

AgriBusiness & Food Industry w July 2012

Food Safety

Expert view

Public health is more important than taste & cost, says Vijay Sardana Vijay Sardana, who has recently been conferred with the Special Award for his extraordinary contribution to commodity markets in India, spoke to AgriBusiness & Food Industry about the necessity and implications of the new Food Act. Excerpts:

First of all, Media Today Group congratulates you for winning the Special Award from Pranab Mukherjee for your contribution to the advancement of commodity markets in the countryâ&#x20AC;Ś... Our first question is about your illustrious, experience-rich, and two-decade long journey from CFTRI to now as Chief Operating Officer (COO) with large industrial house. How do you feel about such a rewarding career and way forward for agriculture space in India? At the outset, let me convey my thanks and heartiest gratitude to my teachers, parents, family, friends and well-wishers for their constant support and guidance. They all provided me intellectual inputs, encouragement and moral support to pursue career in this non-glamorous sector of Indian economy. Whenever I undertook challenging assignments and tasks, they were instrumental in enhancing my knowledge, skills and capabilities. It was tough with many challenges but enriching and satisfying journey. This recognition gives confidence that the path was right and give encouragement to do more and because still long way to go.

Since 1984, I am associated with agribusiness universe in various capacities. Started by journey as student and performed my responsibility as Extension Worker, Production Executive, Sales Engineer, Head of Departments and Head of Organization. I worked with NGOs, Cooperative sector, Government Policy Making Bodies, Industry bodies, Consumer bodies, Farmer Groups, Private Sector Firms and International Development Agencies like UN Bodies, Large Multinational Organizations in India and aboard. It was clear from the day one that business and market is a dynamic place, one must constantly upgrade knowledge base and skills to remain relevant with changing times. I was continuously acquiring qualifications in technology, law, various aspects of management like human resources management, finance management, economics and policy making from some of the best institutes in the country. I also travelled to every state of India and extensively around the world to have first-hand experience of ground reality in every aspect of agribusinesses and food world. After spending more than 25 years in agribusinesses in various capacities, it is

AgriBusiness & Food Industry w July 2012

clear that agriculture and agribusiness needs extra dedication and is very critical for political and social stability in India. As a country with very high population density and poor agriculture productivity, it will always be challenging to ensure food security to masses and employment to unskilled workforce. Unless we develop an action plan at state level and district level to address these two biggest challenges of India, the political and social stability of India cannot be ensured for too long. Unfortunately, agriculture and agribusinesses are not getting due attention in terms of technology intervention and financial and intellectual resources to create infrastructure and human resource suitable for agriculture and agribusinesses. This will create serious problem with growing population and shrinking nutrition availability. We are running out of time because time lag between planning and execution will take three to five years and by then this will complicate the situation on ground. I wish more and more media houses, private sector and policy execution bodies will devote more time and resources to address the economic, social, political and foreign policy

Food Safety aspects of agriculture, food security and agribusiness space because this sector will decide the peace and prosperity of India. I must thank Zee Group for organizing this award for recognizing commodities and agribusiness space and brought this vital economic and social space in public domain. They have dedicated very informative and contemporary show called “Mandi Live” for agri-food-commodity space. FSS Act has come to protect public health. But small and marginalized Food Business Operators (FBOs) like Mithaiwalas and chaatwalas are apprehensive about the rules that might not only stop them from using certain ingredients, resulting in taste loss and poor sales, but also may shut their shops. Licensing is another big issue. As a food technocrat, what is your opinion to protect the interests of such small players as well as maintaining health standards? Please suggest, what is the alternate to safe food? Food Safety and Standards Act is instituted to protect public health from unsafe foods. It is the fundamental right of every citizen to have access to safe food. It is the duty of the government to ensure safe food. As a country we have to decide what is more important, safe food to eat to protect public health or survival of unhygienic shop on road side and employment and earning of shop owners? One shop can make hundreds of people sick. If our Parliament has passed this law it means our policy makers and peoples’ representatives want safe food for masses. Why every change is taken as negative development by various stakeholders? Why, as a society, we don’t want to change for better and safer future? Why affected parties feel their commercial interest is more important than public health? How much it cost to ensure clean water, clean utensils and clean and proper storage of ingredients used in mithai shops and namkeen shops? Consumer is willing to pay for clean and safe food. Look around, you will find Hygienic shops do better business then dirty shops. It means to provide safe and hygienic food is always better business strategy. No one wants unsafe food at discount, because no one wants to be sick, not even those who oppose new safe food laws. Safe food never reduces business and shut shops. It is a mindset issue.

It is very well known fact that about 80 per cent diseases are due to bad water and bad food. Most of the small scale food operators use traditional skills and knowledge in making food items which is typically traditional concepts of indigenous fast foods of India like mithais and namkeens. If prepared hygienically, many of them are better in nutrition in comparison to their western counter parts. Unfortunately, in traditional shops, hygiene is not important parameter. The major focus is cost i.e. profit or taste i.e. sales and not food safety. Many of these shopkeepers do use ingredients to keep cost low and taste good in mind like synthetic non-food grade

bad and contaminated food. If we are progressing in that direction, why so much opposition? I agree and fully support that there must be a mechanism which is fast, fair and hassle free. There must be space and level playing field for Indian traditional food preparations. Any delay at any level only brings bad business practices into play. All the license fees collected should be used to improve the system, infrastructure like testing laboratories and to train the small players and if possible support them by training and provide facilitation services to ensure food safety and hygiene in their operations. There is no alternative to safe

If anything which is used by FBO is unsafe, even if it is adding taste or look of the product, it must be stopped and banned. Public health and safety is more important than taste and cost. No civilized society will ever support unsafe food and Courts will stop sale of such products, even if authority will permit such products. So, best option is focus of safe and good food colours, excessive artificial flavors and sweeteners, water from unhygienic source, utensils are washed with unclean water, leftover food is reprocessed or frying in polymerized and oxidized oils to save cost, workers’ personal hygiene is never considered. Location can be on drainage systems. These are just few of the examples. Unhygienic foods are biggest concern for public health. Have you ever seen any statistics indicating food positing cases in India or sickness due to bad food in India? You will not get these figures because hospitals and doctors don’t maintain such records. FAO report says 30% population in developed world suffers due to bad food. Can you imagine what will be the situation in developing country like urban India and underdeveloped rural country like Bharat? Licensing is required basically to ensure that there should be minimum food safety requirements with every food business operator. After all Government is accountable for public health and there must have check on who is supplying what, to consumers. In America, there is Bioterrorism Prevention and Preparedness Act, because food can be misused and can be infected to create public health crisis of unpredictable level. Every country is changing their laws to save public from

food and food safety. Employment and economic considerations can be addressed within food safety parameters. Major Challenge is only Mindset and desire to change. What is the way forward for mithai and namkeen shops? If there are any items or ingredient which mithai or namkeen shops association wants to add to food, if not permitted, they can make representation to FSSAI with the justification for use in food items. If required, under Right to information they can ask on what basis Food safety Authority has rejected their demand. FSSAI will provide the decision of the committee and with relevant facts. So I don’t think it is such a big issue. But yes, if anything which is used by FBO, which is unsafe, even if it is adding taste or look of the product it must be stopped and banned. Public health and safety is more important than taste and cost. No civilized society will ever support unsafe food and Courts will stop sale of such products, even if authority will permit such products. So, best option is focus of safe and good food. (Views expressed here are personal. Author has no mandate to represent any association or organization on these matters)

AgriBusiness & Food Industry w July 2012

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Achievement

FM honours Vijay Sardana for contribution in commodity markets

ijay Sardana, a wellknown name in Indian commodity markets, has been conferred with the Special Award for his contribution in growth of Indiaâ&#x20AC;&#x2122;s commodity markets. The award is also an acknowledgement of his constant efforts to make commodity markets better. It was presented by Pranab Mukherjee, Finance Minister of India, in the presence of Subhash Chandra, Chairman of the Zee Group, during 3rd Financial Markets Conclave, and on the occasion of Indiaâ&#x20AC;&#x2122;s Best Market Analyst Award-2012, on 16th

June, in Mumbai. Vijay Sardana is a Post Graduate from IIM-A, CFTRI and ILI, and is also Management Committee Member of Solvent Extractors Association of India (SEA), besides members of other important associations and professional bodies. He is currently Chief Operating Officer (COO) and Director of Jaiprakash Agri-Initiatives Company Limited, Noida, and Director, Achieversâ&#x20AC;&#x2122; Resources, New Delhi. He has experience of more than two decades in various leadership positions, and committed himself for the development of efficient and fair commodity markets and globally

AgriBusiness & Food Industry w July 2012

competitive agribusinesses through his knowledge, experience, insight and determination. He has contributed extensively for the development of commodity markets and value addition in agro-commodities by implementing the concept of global competitiveness by with the deep and insightful understanding of complex interrelation between social, economic, technical, legal and political aspects of commodity markets and value added agribusinesses. The visionary man has travelled more than 20 countries, and worked on wide range of issues affecting agrocommodities and agribusinesses from almost all agro-climatic situations on various aspects with wide range of business houses, international development organizations and policy making bodies around the world. He has also contributed through his projects, trainings, writings, researches, critical analysis for various stakeholders, and had interactions with various committees of policy making bodies, institutions and publications and was invited to many national and international forums. His understanding of complex dynamics of commodity markets and agribusinesses is a great asset for investors, professionals, executives, farmers and policy makers. He is among the few whose in-depth knowledge and hand-on professional work and views are well recognized in commodity trade and agro-based industries. n

AgriBusiness & Food Industry w July 2012

Agri Affairs

Spare a thought!

Let’s protect migrant farm labourers who feed us — Sanjeev Chopra

Your columnist was told that there were at least one million agricultural workers of South Asian origin in Italy alone, and that substantial work in the crop, horticulture and dairy sector was performed by these workers, who were working at starvation wages, often in the range of five to ten Euros per day. However, as they do not have any work permits, they cannot seek redress from courts

While the FAO and the global community connected with agriculture and food security have rightly drawn that attention of governments and civil society towards the need to strengthen tenure rights for small landholders, and their access to land, forest and water bodies for agriculture and fisheries , there is one aspect that has escaped the radar, and but for this columnist’s personal involvement in a situation involving a class fellow, it may have taken many more months for this issue to get the attention it deserved. It is well known (though not well documented) that agriculturally prosperous states like Punjab and Haryana are now critically dependent on migrant labour from Bihar and eastern UP for even the most critical sowing and harvesting operations. As long as the migration is ‘seasonal’, and within the country, the impact is manageable. In fact, with the introduction of MNREGA, the wage differentials throughout the country have been rationalized, and we are witnessing the growth a pan –India labour market. Labour moves to regions and areas of intensive industrial and agricultural activity, and is in a position to negotiate and demand fair wages, living conditions, and in several cases, a share in produce and profits. The political voice – both in the constituency of the origin as also the constituency of work –coupled with the presence of large number of NGOs, trade unions ,civil society activists and a competitive medias , and most importantly, the demand –supply scenario gives a bargain platform for the

AgriBusiness & Food Industry w July 2012

agriculture worker. However, unlike a shop floor or a commercial establishment where norms are clearly laid out, by the very nature of agriculture work leaves much of it in the domain of the nebulous. The issue gets aggravated when we see the global agri production scenario, especially Europe where farmers are not as big as the US farmers to have gone in for complete mechanization, or as small as in SE Asia or Africa to depend primarily on labour of the self and family. Like the post Green Revolution prosperous farmers of Punjab, the medium to large family farms in Europe, including dairy farms, are now dependent of ‘hired labour’ – but because of the extremely high wage rates in Europe, they are dependent of migrant labour – often of the illegal variety, as this is available at a fraction of the cost of European labour. Your columnist was told that there were at least one million agricultural workers of South Asian origin in Italy alone, and that substantial work in the crop, horticulture and dairy sector was performed by these workers, who were working at starvation wages, often in the range of five to ten Euros per day. However, as they do not have any work permits, they cannot seek redress from courts, or are also reluctant to talk to their own Embassy officials who are also legally bound to send them back to their country with an endorsement on the passport which makes it impossible for them to travel abroad again. It’s a tough and grim human story for those who are caught in these situations – and for their family members – many of whom have borrowed funds or sold their assets in the hope of finding a better

Agri Affairs life abroad. The workers are caught in a Catch 22 – they have nowhere to come back to, and their own situation is desperate for they are denied even the most basic human rights. The time has come for the global community to at least take stock of this situation. In the first instance, countries which are signatories to both the FAO and the ILO must agree to undertake to take an internal assessment of the conditions of work for agricultural workers, determine a fair and decent wage, and take steps to issue voluntary guidelines on these aspects as a prelude to their legal enforcement. If Voluntary Guidelines can be issued on land tenure as also Agriculture Outsourcing, it is imperative that this aspect is also taken on board. A joint working group of the FAO and ILO with representatives

from EU, Asia and Africa group must be established immediately to at least take stock of the situation. Before any remedial steps can be suggested, at least an empirical study is in order. It must be mentioned here that the problem is not confined to Europe alone. Several farms in North East are critically dependent on workers from Bangladesh and Nepal and they are playing an important role in agricultural production. True, there is resentment among a section of population against their dominant role in production system; there is no escape from the reality that without them, the prices of vegetables and farm products would become unaffordable. In fact, hundreds of hectares of land in Kerala are left unploughed because the wage rates are so high that farm operations havebecome

unviable. One solution is that work permits for agricultural work should be issued liberally, and they should be treated as professionals and treated at par with professionals in other sectors. Before concluding, it must be said that this exploratory essay is to draw attention to the critical aspects of food production and workers engaged in this sector. When we eat food, we should also be able to spare a thought for all those who are engaged in the production process, and ask questions on whether those who produce it get adequate recompense for their labour. (The author is Joint Secretary & Mission Director, NHM & NMMI, Union Ministry of Agriculture)

Govt makes labeling of GM foods compulsory

onsumers in India can now make “informed choice” on whether they want to buy packaged food products that are genetically modified or contain genetically modified ingredients. The Ministry of Consumer Affairs, in an extraordinary gazette notification, has made an amendment to make labelling of every package containing genetically modified food mandatory from January 1, 2013. The move will impact the imported GM foods that are flooding the markets. The notification published on June 5, 2012 says: “Every package containing the genetically modified food shall bear at the top of its principal display panel the words ‘GM.’” Awareness With a moratorium on Bt Brinjal, India does not produce any GM food. However, it is suspected that GM foods are imported in several forms. The Rules leave it to the importer to declare that the

food commodity entering the country contains GM products or have GM ingredients and several officials confirm that rarely is any voluntary declaration made by the exporter or importer. Also, even if the declaration was made at the borders, there are no credible labs to test for genetically modified ingredients in a food product. Consumer Affairs Secretary Rajeev Agrawal said that the government’s intention in introducing GM labelling was to “educate consumers and make them aware of GM products, much in the manner that there is labelling to distinguish non-vegetarian food from vegetarian.” Overwhelming response The move came after the Parliamentary Committee on Cultivation of GM Food Crops, Prospect and Effects recommended that GM foods be labelled. The Ministry took the views of the State government and received an overwhelming response in favour of the move, Ministry sources said. “While this will go to some extent in

letting us make informed choices when it comes to imported food products with GM ingredients and also in all cases where cotton seed oil is being used from within India [most of which is Bt cotton seed oil], this is no solution to food produced within the country as a lot of consumption is in non-packaged form. Also, how the Ministry will enforce this is to be seen,” said Kavitha Kuruganti of the Alliance for Sustainable and Holistic Agriculture. Global discussion While the government maintains its intention is limited to creating consumer awareness, the question of labelling GM foods has been under global discussion for almost two decades with activists pressing for labelling and producers opposing it. The notification is silent on whether the amendment is applicable to primary GM foods or processed foods.

AgriBusiness & Food Industry w July 2012

Cereals

Global Grains World rice output touches new high: FAO Besides predicting a rise in world rice production, the IGC report said, “Despite a further expansion in world use, to 459 million tonnes (449 million), the global 2011-12 carryover is expected to increase to 99 million (96 million). “The projected rise is largely due to increases in key exporters, namely India and Thailand, as well as in China.”

elped by record rice production in India, world output of the key staple rose by 2.6 per cent to all—time high of 480.1 million tonnes (MT) in 2011, United Nation’s body Food and Agriculture Organisation (FAO) has said. Global rice production stood at 468.1 MT in 2010. “With the rice season virtually completed, the latest estimate of 2011 world rice production has been lowered slightly to 480.1 MT, still pointing to a 2.6 per cent or 12 MT, increase from 2010 and to an all time high,” FAO said in its latest Food Outlook report. The downward revision in the 2011 world estimate resulted from adjustments in the output especially in Bangladesh, Mali, Pakistan, Senegal and Venezuela, it added. “The increase in world output in 2011 was principally fostered by outstanding results in India, which on the back of a favourable monsoon, experienced a 7.4 MT expansion to 103.4 MT, breaking the 100 MT landmark for the first time,” it noted.

According to the India’s Agriculture Ministry estimates, the country is pegged to have harvested a record 103.41 MT of rice in the 2011-12 crop year (July—June) as against 95.98 MT in the previous crop year. “Considerably more rice was also harvested in Asia by China, Pakistan and Vietnam. Further sizable gains were achieved by Cambodia, Malaysia, Nepal

AgriBusiness & Food Industry w July 2012

and the Philippines,” it said. However, a series of setbacks including floods, excessive rains and diseases depressed output in Indonesia, Myanmar, Sri Lanka and Thailand, FAO pointed out. Outside Asia, the 2011 season concluded positively in Argentina, Australia, Brazil, Egypt and Uruguay, while poor growing conditions were partly behind disappointing crop results in Madagascar and in countries of West Africa, especially Mali and Senegal, it said. IGC Reports on Asia -- production, stocks and trade In its reports on global production and consumption, the International Grains Council (IGC) said in its Grain Market Report, rice is breaking records. Although demand is covered, causing a rise in ending stocks, there have been enough bullish factors in the market to keep prices mostly firm. “Rice export markets in Asia strengthened in March, with values supported by logistical issues in India, unexpectedly heavy buying by China and ongoing support measures in Thailand,”

Cereals Besides predicting a rise in world rice production, the report said, “Despite a further expansion in world use, to 459 million tonnes (449 million), the global 2011-12 carryover is expected to increase to 99 million (96 million). “The projected rise is largely due to increases in key exporters, namely India and Thailand, as well as in China.” It forecasts a fall of 5% in world trade to 32.7 million tonnes because of reduced Asian imports. In its World Agricultural Supply and Demand Estimates report, the U.S. Department of Agriculture (USDA) reduced production and consumption predictions for 2011-12. “World rice production is reduced 1.7 million tonnes to 463.7 million tonnes, still a record, largely due to lower projections for Burma, Colombia, Egypt and Indonesia, which are partially offset by increased projections for Bangladesh, Thailand and Vietnam,” it said. “Global consumption is reduced 4.1 million tonnes to 458.8 million, still a record, largely due to reductions for Burma, Egypt, India, Pakistan and Thailand, partially offset by increases for China, E.U.-27 and Iran.” Wheat rules in Pakistan Referring to Pakistan, IGC report noted that rice is vital to Pak economy, but the staple at home is wheat. Water, whether it’s too much in the form of floods or shortages when it’s needed for irrigation, is a major issue. The report put Pakistan’s total grain production for 2011-12 at 28.2 million tonnes, up from 27.8 million the year before. Its wheat crop is estimated at 24 million tonnes, up from 23.9 million. The sorghum crop is put at 200,000 tonnes, up from 100,000 tonnes. The Council predicts a fall in the wheat crop for 2012-13. “Seasonally warm weather and light precipitation benefited the crop in Pakistan, where output is projected at 23.5 million tonnes,” it said. Total grain imports in 2011-12 are put at an unchanged 100,000 tonnes. Wheat exports are put at 1.2 million tonnes, down from 1.3 million. Rice production in 2011-12 is put at

US grains fall sharply due to slow economy

S grains fell sharply in the beginning of June with wheat dropping more than 1 per cent to a two-week low, as a surging dollar and mounting concerns over Europe's debt crisis triggered a broad commodities sell-off as investors fled risky assets. Corn and wheat futures declined despite a larger-than-expected downgrade in US crop conditions, while soybeans tumbled to their lowest in a week on news that top soy importer China was unlikely to pass a stimulus package. The US dollar index, which measures the strength of the greenback against a basket of currencies, rose to its highest since September 2010 amid the euro zone banking crisis and slow growth in China, making dollar-priced commodities expensive for importers. The dollar typically has an inverse price relationship with commodities, which are priced in dollars. So for importers a stronger US currency makes commodities cost more. "It's a risk-off attitude," said Citigroup grains analyst Sterling Smith. "Pick a country in Europe and pick a problem. The Spanish banking crisis seems to be the most acute issue and that is creating a situation where commodities in general are selling off along with equity markets." Wheat for July delivery was off 9 cents at $6.47-3/4, declining for the second straight day at the Chicago Board of Trade, while July corn was down 6-3/4 cents at $5.55-3/4 and

7.2 million tonnes, up from 4.8 million, a low figure which was affected by floods, while rice exports are put at 3.7 million tonnes, up from 2.8 million, enough to make Pakistan one of the world’s leading rice exporters. The USDA’s attaché, also predicting a fall in wheat output in 2012-13, noted a declining trend in area, down by 5% in two years. Last year, the Government of Pakistan procured 6.4 million tonnes of

July soybeans 19-1/4 cents lower at $13.67-1/2. Weakness in other commodities, especially crude oil and metals, also pressured the grains complex, analysts said. "We are seeing something of a tugof-war each day between the depressed micro economic environment and weather conditions especially in the Black Sea region and the US," said Rabobank analyst Erin FitzPatrick. Russia's Grain Union gave an upbeat picture of the country's upcoming crop and exports. Traders were keeping a close eye on weather forecasts after wheat prices came under pressure after reports of rain in dry southern Russia in early June, with Russia's state forecaster predicting more rainfall. "We do have some improved weather forecasts for the US this week but the longer-range forecasts are still not very positive," FitzPatrick said. The US Department of Agriculture's weekly crop progress report said that 72 percent of the crop was in good-toexcellent condition. US corn and soybean crops now need an urgent round of rain and there are some forecasters calling for showers in the Midwest. Rain is also seen in portions of the lower Midwest, providing critical relief to stressed corn crops in those areas, although more will be needed to foster development. Traders said rain was unlikely to penetrate the dry subsoils that were slowing soybean emergence.

wheat from the local production, the attaché’s annual report noted. “Trade sources estimate that Pakistan exported 1.5 million tonnes in MY (Marketing Year) 2010-11 and around 800,000 tonnes in MY 2011-12.” The report also said that Pakistan’s wheat exports in 201213 are forecast at 300,000 tonnes, mainly to Afghanistan. The attaché’s figure for

AgriBusiness & Food Industry w July 2012

Cereals

Iran Trade Delegation visits India for wheat imports

delegation from sanctions-hit Iran arrived in India on Tuesday to explore the possibility of importing wheat from the south Asian nation, which has huge stocks and wants to reduce its trade imbalance with the oil exporter, government sources said. Food shipments to Iran are not targeted under Western sanctions aimed at curbing Iran's nuclear programme, but payments remain difficult because of financial sanctions, even though India has just won a waiver from Washington on the strictures. India, Iran's second-biggest crude client, hopes it can reassure Tehran on quality and secure wheat sales to help settle part of its $10 billion a year-plus oil import bill through a barter-style mechanism using rupees. But an Iranian bank has just stopped payment guarantees for importers using this mechanism

because not enough rupees have been deposited in its account to back them. "The delegation will be in India for seven days, visiting warehouses and laboratories in three leading wheat producing states," one government source said. The delegation from Tehran will primarily see whether India's wheat meets the quality norms of Iran, another government source said, with actual deals unlikely to emerge at this stage. Iran has not been buying Indian wheat since the mid-1990s because of concerns about Karnal bunt, a fungal disease. India has plenty of wheat to sell if Iran is convinced. On June 1, India's wheat stocks at government warehouses surged to a record 50.2 million tonnes, well above the official target of 4.0 million tonnes for the quarter ending June 30.

Pakistan’s rice production in 2012-13 is 6.8 million tonnes. “The estimate of Pakistan’s rice exports in MY 2010-11 has increased 28% to 3.2 million tonnes, mainly due to the increased demand and better prices in the world market,” the report said. “Pakistan’s rice exports also got benefited from India’s ban on rice exports, earlier in the marketing year.” “MY 2011-12 rice exports are estimated at 3.7 million tonnes, 3% higher than last year’s export estimate. Rice exports in MY 2012-13 are projected at 4 million tonnes based on the expectation of a good harvest,” the attaché said. In a separate report, the attaché explained how oilseeds production in Pakistan has been left behind as the government has made wheat a priority. “In an attempt to ensure food security, Pakistan’s agriculture policy is largely focused on the enhancement of wheat production,” it said. “Oilseed production typically receives less attention compared to crops like wheat, rice, cotton and sugarcane.”

Why Iran is less keen on Indian wheat? – Tejinder Narang

vents of the last four months confirm that Iran is not keen to buy Indian wheat. It appears that Iran's estimated demand for three or four million tonnes of

Indian wheat is an overestimation. The lack of demand for Indian wheat is due to sanitary and phyto-sanitary issues, and not disparity in prices. Since February 2012, Iran contracted about three million tonnes (mt) from

AgriBusiness & Food Industry w July 2012

its preferred origins — US, Canada, Australia, Russia and Kazakhstan — despite a rupee payment mechanism agreed on a bilateral basis. (On humanitarian grounds, US sanctions are not applicable on food supplies to Iran.) India's wheat exports were freed in September 2011 (after prohibition in 2007) and have touched 0.9 mt, mostly to the Middle East Bangladesh, with nothing to Iran. Iran buys Indian rice, tea and soyameal — but not wheat. Iran's GTC (Government Trading Corporation) generally imports 2 million tonnes of wheat per annum, barring exceptional years like 2008-09 when peak tonnage touched 8 million tonnes. The last Indian wheat deal with Iran was executed in 1996 under the Asian Clearing Union (ACU) system. Though India exported about 14 million tonnes of wheat in 2001-05 at the cheapest prices

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Cereals globally, to the geographical arch from S. Korea to Yemen, not a single tonne was sourced by Iran. Exaggerated Fears Iran's NPPO (National Plant protection Organisation) has embargoed Indian wheat due to the presence of tillitia Indica (Karnal Bunt or KB) as a fungal infection and ‘Striga species' as a parasitic weed in the grain. Though Iran itself has KB, this phytosanitary issue has inhibited the bilateral wheat business. KB can adversely affect yield when it is a part of seeds used for sowing. But it will have no implication for milled flour when present in insignificant percentages. The existence of ‘Striga species' has been completely ruled out officially by Indian authorities. KB, too, is absent in the central and western Indian crop, while its negligible presence in the North West has had no impact on Indian wheat production, which increased from 48 million tonnes in 1990 to 91 million tonnes in 2012. Indian plant quarantine authorities cannot issue a ‘nil' certification for KB, and any marginal tolerance has to be defined in quality terms. The ghost of KB has, however, not affected private exports to other quality-conscious countries, as the shipped grain is used for milling, and not for seeding. India relaxed some SPS issues over “weeds” in US, when it imported six million tonnes in 2005-2007. The US had responded by lifting the ban on Indian mangoes. Can't the same approach be applied in the case of Iran? Zero tolerance Problem Resolution of the current SPS conciliation with Iran also requires political will at the highest level, rather than discretionary decision-making by plant quarantine authorities. Certification like “wheat not sourced from KB regions” or “substantially free from KB” or with “maximum limit of 0.2 per cent” can be agreed upon. But “zero tolerance” can expose Indian shippers to arbitrary rejection of cargo. Pakistan may have also failed to sell wheat to Iran due to similar stringent requirements. Why has Iran not relaxed SPS

conditions since 1996? Why did Iran not procure any wheat from India in 2001-05, despite prices then being the lowest? The reason is that well-entrenched traders of US Australia and EU zealously guard their markets. These countries do not pursue flip-flop, “on and off” export policies. In 1996, Indian cargo met with resistance from these origins. Now, they can blow out of proportion a non-issue like KB in Iran, scuttling any favourable decision for India. Recently, India gifted 100,000 tonnes of wheat to Afghanistan via the Iranian south-eastern port of Chabahar. Since Afghanistan is terribly short of milling capacity, the bulk of flour production may have been carried out in Iran on behalf of the Government of Afghanistan. This is in a small way an acknowledgement of Indian wheat being imported via Iran without any negative implications. The added advantage of export of wheat to Iran in break bulk cargoes through Chabahar port will also facilitate or enhance India's wheat trade with Afghanistan in the long term. Iranian insistence of zero tolerance for KB is inconsistent with the use of wheat for milling. India consumes 80 million tonnes as flour annually, and KB has never been an issue. All American/ foreign food chains operating in India, like Pizza Hut, McDonalds, Pepsi foods, Hindustan Lever (subsidiary of Unilever), Britannia Breads, and so on, use Indian flour without any reservations. Meanwhile, some precautions for ensuring enhanced quality of wheat flour can be agreed upon. Iran is dragging its feet on the KB matter, while meeting its needs from elsewhere. We must seek to settle the issue at the earliest, even as the prospects of a deal on this front in the immediate future do appear too bright.

India & Australia to fight grain insects

three-year collaborative research project “Ensuring food security: Harnessing Science to protect food grains from insect threats” between India and Australia has been sanctioned by the Department of Science and Technology, Government of India to the Tamil Nadu Agricultural University in Coimbatore. Dr E.I. Jonathan, Director, Centre for Plant Protection Studies (CPPS), TNAU, said that the University would work with University of Queensland and the Department of Employment, Economic Development & Innovation (DEEDI), Australia for evolving new methods to enhance the efficacy of phosphine fumigant. The Principal Investigator of the project and Professor (Entomology) at TNAU, Dr S. Chandrasekaran, said that within India, TNAU would work jointly with Central Food Technological Research Institute (CFTRI), Mysore, Indian Agricultural Research Institute (IARI), New Delhi and Indian Institute of Crop Processing Technology (IICPT), Thanjavur, on this project. The outcome is expected to assist the country in modernising its postharvest management and research capacity; enable rational management of fumigant resistance, a major issue for the large scale grains storage at Food Corporation of India (FCI), Central Warehousing Corporation (CWC) and State Warehousing Corporation (SWC). “Globally, grain-handling organisations rely on phosphine for controlling insect infestations in stored food grains. But the high-level of resistance to phosphine in storage insects is an acute and growing problem in both India and Australia. This seriously threatens the long-term security of stored food grains. Therefore, the immediate challenge is to develop sustainable strategies that will enhance the efficacy of phosphine to control the storage insects effectively,” Dr Jonathan said.

Courtesy: HinduBusiness Line

AgriBusiness & Food Industry w July 2012

Cereals

‘BlackSeaGrain-2012’

Growing role of Black Sea countries in global agri business (including futures) that are running on the Ukrainian stock exchanges. Balitsky replied that activities of Agrarian Exchange and CME Black Sea wheat contract are in different non-overlapping sectors. A question about perspectives of Ukrainian futures was addressed to E. Patimova who supported idea that in the nearest future, futures contracts operations in the Ukrainian agri market seems unrealistic.

he Black Sea Grain conference has become perhaps the most representative agricultural forum of the region, and proof of it was the presence of about 700 participants representing more than 400 companies producing cereals and oilseed crops at this event. Besides farmers, traders and brokers, representatives of investment banks, insurance and consulting companies from 52 countries worldwide attended the 9th annual international conference -- “BlackSeaGrain-2012: Market Maker” -- held on April 18-19 in Kyiv, Ukraine. Three years ago, the number of participants was much smaller Black Sea Wheat Futures During the two-day conference, CME Group, which is managing commodity exchanges in Chicago (CBOT) and New York (Nymex), announced the launch of new Black Sea Wheat Futures. The standard futures contract involves delivery of 5 000 bushels (136 MT) to the Black Sea port of Ukraine, Russia, Romania on a FOB basis. The start of Black Sea Grain Futures trading is scheduled for June 6. According to CME Group, demand for Black Sea wheat futures can be

contributed by international grain traders as well as by large agricultural producers from Ukraine, Russia and Kazakhstan (agriholdings) which are into exporting activity. In the first half of marketing year, demand for Black Sea grain futures may be supported by the dominance of Black Sea grain in the wheat pricing, and in the second half of the season, by importance of coming harvest for global market. However, not all the participants shared this optimism. According to a representative of NYSE Liffe (UK) Elena Patimova, among the necessary conditions for a normal functioning of commodity derivatives market (including futures) are: non-interference (or projected adjustment) of the commodity market by the state and volatility in grain prices. In Ukraine, due to the absence of the first condition classic futures cannot operate. E.Patimova also said that other factors needed for the full functioning of commodity derivatives market are absent too: little or no potential hedgers (large export companies operating in Ukrainian grain market tend to hedge price risks in Europe) and absence of a relevant trading platform. The issue of the CME Group futures triggered an active discussion. In particular, Deputy Director of Agrarian Exchange, Constantine Balitsky, was asked if he sees any competition of new futures contract to existing contracts

AgriBusiness & Food Industry w July 2012

Management of farm holdings On the first day of the conference presentations were made on agricultural holdings that demonstrated high performance. According to a representative of Grain Aliance, Eugene Radovenyuk, issue of land ownership did not play and does not play a decisive role in creation of effective management. The company currently handles about 40 thousand hectares of land and successfully solves management problems as it complies with a number of conditions, among which are transparency, staff training and application of the best international practice. To date, the results are very positive - a significant rise in performance, while maintaining the same level of production costs. Representative of the Industrial Milk Company, Oleg Todchuk, believes that creating an effective business model allows the company, whose land bank amounts to 64 hectares, achieve a significant reduction in production costs. In particular, cultivation cost of one ton of maize amounts to $ 80 while an average cost in Ukraine is $ 143. At the end of 2010 the company successfully passed the IPO, selling 24% of the shares on a Warsaw Stock Exchange. The proceeds of $ 30 million were invested into development of production. The company possesses a storage capacity of 24 thousand tons, 7.5 million heads of cattle and produces 18 thousand tons of milk (2011).

Cereals Asian countries’ role in global consumption On the second day of the conference, presentations were made on the prospects of global production and consumption of agricultural products. There was agreement that Asian countries would play a key role in the global consumption and Black Sea region can make a good profit on it. Opening the first session, "Global economic performance and agricultural markets" UBS representative, Wayne Gordon, drew attention to the growth trends in food consumption in the Asian region. According to him, growth of import of agricultural products to these countries will continue. Imports of soybeans to China are estimated at 156-157 million tons. The speaker also drew attention to a gradual decline in corn stocks in the U.S. (traditionally - the largest global producer of corn) and a significant increase in corn production in China. According to forecasts of USDA, corn harvest in China may reach 190 million tons per year. On food consumption growth in Asian countries, .Nicholas Higgins, Rabobank International (UK), noted that volume of China's corn imports will exceed the volume of corn harvest in Ukraine. He said the trend of increasing consumption in China would lead to an increased production of this crop in Ukraine, Russia, Bulgaria and Romania. Export growth in Black Sea region According to General Director of IKAR (Russia), Dmitry Rylko, total exports of grain from Russia, Ukraine and Kazakhstan in recent years came to the same level as exports from the United States (Gulf of Mexico), and "there is a tendency of exports growth from the Black Sea region." General Director of UkrAgroConsult, Sergey Feofilov, spoke on Ukrainian export potential. He estimated that the main factors to determine the country's market in the nearest future are: stability of export regime, high export capacity (due to corn), expansion of sunflower

and maize acreage and a growing role of feed grains in export structure. The main problems of exporters, unfortunately, are likely to stay. Among them, according to Feofilov, is a slow return of export VAT, uncertainty in the regulation of markets, problems with registration of relevant documents and a sharp rise in prices for transportation. The potential for grain export, according to Feofilov, is 18-19 million tons in 2012, and 20-21 million tons in 2013. An expert of UkrAgroConsult, Elizaveta Malyshko, noted that corn is a key crop for Ukrainian grain exports and in 2012 its volume may reach 12.5 million tons. Elaborating the potential of Russian oils and fat sector, Vladimir Petrichenko, MICEX, RTS Russia, drew attention to reduction in Russian sunflower acreage with an increase in canola and soybean acreage. If in 2011 sunflower area was at 7614 thousand hectares, soya area - 1229 thousand ha and rapeseed area - 893 thousand hectares, in 2012 the corresponding figures were 7103, 1370 and 982 thousand hectares. Representative of KazAgroMarketing, Zhanna Baytemirova (Kazakhstan), emphasized that farmers in Kazakhstan are traditionally oriented to wheat production due to a lack of technological readiness for other crops cultivation. The country’s wheat acreage amounts to 13 million hectares out of total of 15-16 million ha. Over the past 5 years wheat exports did not exceed 9 million tons per

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year. Price-maker in world grain market The conference closed with was a session on "Measuring impact of Black Sea region on global S&D”. President of Ukrainian Agrarian Confederation, Leonid Kozachenko, underscored the growing role of Black Sea countries as grain exporters. Sharing this optimism, Dmitry Prikhodko, FAO, stated that Black Sea region is now a price-maker in the world grain market. Representative of SGS Group Management (Switzerland), Gennady Shulga, spoke about work of inspection companies in the field of safety and quality of production. According to him, about 10% of world’s grain harvest may be lost due to pollution, insects and so on. Inspection companies not only help to save a crop, but also offer consumer a range of services. Among them are: fumigation certificates, DNA analysis of the products, market research and so on. In an earlier session, Alexander Artiushin from SwissRe Insurance Company, reported about experience in the field of risk reduction in value chain of agribusiness. He said profitability is influenced not only by risks of price volatility but also by interest rates, exchange rates fluctuations etc. The speaker also said his company insures many of these risks, including the risk of not getting the crop. n

3rd

Gayathri Vihar, Palace Ground, Bangalore, India AgriBusiness & Food Industry w July 2012

Consumer Behaviour

Internet Marketing

The need of the time for food processors & retailers – Kangna Chawla

Internet marketing ties together the creative and technical aspects of the internet, including design, development, advertising and sales. Both consumers and companies agree that internet marketing improves the brand image of the company or products or both, and it is a great revenue earner. But reliability of the company is very important for the success of internet marketing

ince the advancement of internet, retail sector has been using online route to attract and bring customers to their units. Food is no exception. According to Chuck Ellis, President of Restaurant Sciences, an online presence is critical to the success of any food or drinking establishment. Large number of restaurants and food retail chains are aggressively using net as a tool to woo their target consumers. As the presence of smart phones is gathering momentum, internet marketing has become an indispensable part of the overall picture. It is impossible for a food brand not to be present on Facebook or Twitter, apart from having its own individual site with attractive, inviting blogs.

What is it? Internet Marketing, also known as ‘web Marketing’, ‘Online Marketing’, ‘Webvertising’, or ‘E- Marketing’, is referred to as the marketing (generally promotion) of products or services over the internet. It is considered to be broad in scope because it not only refers to marketing on the ‘Internet’ but also includes marketing done via e-mail and wireless media. Digital Customer Data and Electronic CRM (E-CRM) systems are also often grouped together under Internet Marketing. Internet marketing ties together the creative and technical aspects of the internet, including design, development, advertising and sales. Both consumers and companies agree that internet marketing improves the brand image of the company or products or both, and it

AgriBusiness & Food Industry w July 2012

is a great revenue earner. But reliability of the company is very important for the success of internet marketing. Many of the 3rd party internet marketing provide only junk traffic which has a negative impact on the growth of internet marketing. Consumers and companies agree that online support is an important factor to make internet marketing a success. They also agree that more user friendly, better key word matches would drive the future search engine marketing. But at the same time, consumers and companies disagree that internet marketing would fully takeover traditional marketing in their company. Tips for Deciding What to Sell Online What a Merchant sells online has a significant effect on that merchant’s

Consumer Behaviour success, including profitability and longevity. New e-commerce entrepreneurs should choose products wisely. Certainly many factors go in to making a profitable business- hard work, capital, and creative marketing are examples – and product selection is among them. What follows are three tips for choosing which products to sell online: 1. Find your Niche: There are companies that are making large profits online, selling mass products like DVDs, iPads, books or even Levi’s jeans, but for the most part these businesses tend to be either brick or click sellers with established physical locations or very large concerns capable of investing millions in to marketing. Certainly, it is possible to compete with these types of large e-commerce firms. But doing so may require a significant financial investment or a truly innovative business model. Instead, it may make sense to seek out a niche market that big box stores and everything-to-everyone e-commerce giants tend to under serve.

To identify these niche markets, an entrepreneur may want to look at personal hobbies, skills, and interests or even news headlines. Whenever possible, he should seek to sell exclusive or unique products in a unique way. 2. Know Your Market: New Online merchants should seek to serve a market they understand well. This means finding and selling products that appeal to known customer demographics with measurable and predictable buying habits. In effect, knowing the market to which a product appeals brings balance to choosing a niche product, since market knowledge may help a startup avoid selling products for a niche that is too small or that tends to acquire products for a niche that is too small or that tends to acquire products in a different way. So, choose products that fit a known and predictable demographic. 3. Know Your Margins: New e-commerce businesses should choose to sell products that have enough margins – i.e profits – to be successful.

A new online business may not have so many different products to sell. So it is important to select products that have a sustainable margin. As a rule, a merchant can survive on smaller margins if more total units are sold. Don’t forget to consider shipping costs when looking at a prospective product’s likely margin. The Future What a retailer sells certainly impacts his or her success. Choosing to sell products that fit a niche, serve a known demographic, and earn a reasonable profit can go a long way toward success. Companies and Consumers agree that the awareness of internet marketing trends is mandatory to be known for the company. Both also agree that internet marketing will surely grow, and reliability of the company is very important for the success of internet marketing. (The author is Asst Manager, Flowcon Auto Systems Pvt Ltd)

AgriBusiness & Food Industry w July 2012

Press Release

Asia Fruit Logistica 2012

Focus on Fruit and Vegetable Marketing in Asia

his year, top supplier nations are set to make big impressions at ASIA FRUIT LOGISTICA by significantly increasing their exhibition space to accommodate growing ambitions in Asia. The USA and Egypt have reaffirmed their commitment to increasing their fresh produce trade business in the lucrative and exciting Asian market. The event will take place in Hong Kong from 5 to 7 Sep, 2012. The USA’s USDA-endorsed pavilion is set to be one of the biggest country pavilions in terms of sheer size this year, with well-established global players Driscoll’s and The Washington Apple Commission upping their game and increasing their space. USA Pears, California Table Grapes Commission and US Apple Export Council will have a joint US Fresh Fruit Booth, and North Bay Produce and Wahluke Produce will be joining the pavilion for the first time, looking to make the most of the business potential on offer at the prestigious trade show. “The main aim of the USA companies participating in ASIA FRUIT LOGISTICA 2012 is to establish new contacts and leads, particularly in China,” says Sharon Wong project manager at B-FOR International, organisers of the USA pavilion this year. Egypt is also looking to up its market share in Asia’s fruitful fresh produce trade and sees ASIA FRUIT LOGISTICA as a good starting point to achieving this. “We have almost doubled the number of participant companies in our pavilion to 15 exporter companies in total,” says Manar Nasr from the Egyptian Agricultural Export Council, which is organising this year’s pavilion. “Our aim of participating in this fair is to penetrate the Asian market by obtaining new

AgriBusiness & Food Industry w July 2012

importers, retailers and wholesalers to expand in the main Asian countries.” “The organisers of ASIA FRUIT LOGISTICA have a great deal of experience in this field - they know how to make sure the exhibitors get the most out of the fair. I therefore believe” Nasr goes on to say “that in the long-term Egypt will obtain a good market share, through good access in Asia, as a result of exhibiting at ASIA FRUIT LOGISTICA.”. Asia’s leading fresh produce trade show, ASIA FRUIT LOGISTICA, is taking place on 5-7 September 2012 at its new home, the larger, state-of-the-art AsiaWorld-Expo in Hong Kong. To take advantage of Asia’s growing opportunities and ASIA FRUIT LOGISTICA’s ability to offer the best of these under one roof - book a stand or buy your ticket today!

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Press Release

The Green Planet of the Fruit and Vegetable sector

acfrut is an internationally renowned show of the fruits and vegetables sector-from the field to the finished product. The exhibition will take place in Cesena, Italy on September 26-28. Italy is one of the most important countries for producing high-quality fruits and vegetables. The exhibition is growing from strength to strength e a c h year. A clear proof of the interest in Macfrut 2012 is the overwhelming number of registrations of exhibitors. Domenico Scarpellini, President of Macfrut, said, “We are receiving many requests for registration every day from main companies across various sectors. Many big players have already confirmed their presence at the show”. He added that moreover we have already received many requests for larger exhibition areas. This shows that the number of participants at the exhibition will be quite large in a period when economies of many countries are experiencing many problems such as the contraction of consumption (from the food to the car sector). One of the positive aspects of Macfrut is that it was conceived in the mid-Eighties to “showcase” the fruit and vegetable sector, but as a matter fact the show did more than just exhibit fruit and vegetables, and the latest varieties or technologies. Macfrut has become a reference point for the whole sector, because the Italian peninsula is at the crossroads between the North, the South, the East (also the Far East) and the West. Producers and buyers of modern retailing are stopping off at the show along with researchers and business personnel of the emerging countries. Macfrut has two “pluses” which make it a fundamental event for the sector: high-level conferences (with the participation of many foreign experts and businesses personnel and researchers of prestigious Italian institutes and universities), and more than 350 B2B meetings between Italian and foreign companies, which were programmed beforehand according to the specific needs of participants. It is no coincidence that the 2012 edition of the show has this new slogan: Macfruit is the Green Planet of the Fruit and Vegetable sector. Even the data of 2011 confirm many vitalities of the exhibition: 22.3% of professional visitors came from 102 countries, with 82 official foreign delegations and 19.8% of foreign exhibitors. This success is the reason why business houses value Macfrut so much and come to Macfrut, as they know that this is not going to be a useless investment. It encourages contacts with buyers and businesses, at the same time giving the chance to expand the awareness about a company’s activities worldwide. At the 2012 edition, there will be a very important event,

AgriBusiness & Food Industry w July 2012

for the first time ever, on September 25. Sala Europa will house the International Symposium of the strawberry, with the participation of the most important international researchers and scientists who work with this plant. To achieve international presence, Macfrut has gone many steps ahead. “During our mission abroad (Hungary), we had the chance, for the first time, to present Macfrut to Hungarian business houses via the main Hungarian fruit and vegetable association, FRUITVEG”, said Luigi Bianchi, Coordinator of Macfrut. He added that we had the proof of the strong interest of Hungarian companies in our show, as these business houses, which visited our show for many years, expressed their interest in taking part in the event with an exhibition area. This is mainly due to the fact that people seem to like a lot the format of Macfrut, which integrates the exhibition part with technical guided tours. These tours, he said, are extremely important for training and innovation. “We are using the same format this year also”. Another important mission took place in Israel, where the Head of the International Office of Macfrut, Valentina Piraccini, took part in the Agromashov fair. This was one of the many “stages” of the internationalization process Macfrut has been working for many years. The stand, organized with the cooperation of the Emilia Romagna Region, is a way to present this show. It is an exhibition space for important companies that are interested in having a direct relationship with the country of the agri-food exhibition that they decided to visit. Also Agromashov showed a strong interest in Italian technologies and productions and the willingness to come back to Macfrut in 2012. Two important events were the visit of Luigi Mattiolo, Ambassador in Israel, and of Roberto Della Rocca, Vice President of the Chamber of Commerce Israel-Italy. As to the show that will be held in Cesena, there will be a meeting in order to present and discuss (among the different components of the sector) the data of the Observatory of fruit and vegetable consumption of Italian families, a tool that has been used by Macfrut since the early Nineties to constantly provide monthly data, monitoring the more than 26 million Italian families. In 2011 Italian families spent 13.4 billion euros for fruit and vegetables, 6.2 billion euros for fruit, 7.1 billion euros for vegetables and 224.9 million euros for deep-frozen vegetables. Finally, this year too the exhibition will host the Macfrut OSCAR for innovation, a way to present to the fruit and vegetable sector the new products (that are already in the market) of four categories: machineries and technologies for sorting and packaging, packaging and packaging materials, seeds and fresh fruit and vegetable produce, logistics and services.

www.macfrut.com

AgriBusiness & Food Industry w July 2012

Retail

News Bharti Walmart’s losses may dent its image

harti Walmart's accumulated losses have dented its net worth as on the last day of December, 2011, even as the wholesale firm more than doubled its sales last year by adding around a dozen new stores. "The accumulated losses of Bharti Walmart as at December 31, 2011 amounting to Rs 765 crore has resulted in erosion of net worth as on that date," the joint venture between world's largest retailer Walmart and India's largest mobile operator Bharti Enterprises said in its latest filing to the Registrar of Companies (ROC). During the year, Bharti Walmart posted 143 per cent increase in sales at Rs 1,876 crore, but its net loss rose 66 per cent to Rs 277 crore. The company, which operates 'Best Price Modern Wholesale' cash-and-carry stores, also raised around Rs 500 crore in shortterm loans from banks including Citibank, BNP Paribas and HSBC. Walmart India spokeswoman said Bharti Walmart is investing on logistics and back-end supply chain system, in addition to opening Best Price stores to service their members. "These require significant investments and have a long gestation period," she said, adding that the company's overall business performance and consequent loan drawdowns are in line with its plans. Industry watchers too are not alarmed by Bharti Walmart's accumulated losses. "As a percentage of sales, losses has been declining over the years indicating that the business is on track and loss has been primarily due to new store additions and supporting infrastructure," said Piyush Kumar Sinha, Professor of Marketing at Indian Institute of Management, Ahmedabad. Two analysts also said that Walmart can afford to be in the red for a few more years as both their partners Bharti Enterprises and Bentonvillebased parent company have deep pockets and are investing for future growth. India does not yet allow foreign investment in multi-brand retailing. Several multinational retailers are entering the fast-growing Indian market through cash-and-carry wholesale operations that sell products to retailers. The world's second largest

retailer Carrefour opened its first cashand-carry store in India in December, while established players Bharti Walmart and Metro AG are on expansion drive. Bharti Walmart opened ten Best Price Modern Wholesale stores last year, doubling the total number of outlets. While retail firms in the country including Aditya Birla Retail, Reliance Retail and Star Bazaar owned by Tatas have been in the red for the last five years, their combined losses have come down over the years. Yet, several of these players have charted out their wholesale plans, which analysts say is a low-risk game. "While retailers wait for FDI to open, cash and carry is an excellent format to understand the demand of consumers in the country," Debashish Mukherjee, partner and, headfoods, Asia, at consulting firm AT Kearney said. "The format is also amenable to lower overhead costs and operates in low margin, high inventory cycle model," he said. Reliance Industries, which is already in the retail business through Reliance Retail, entered the wholesale business last year. Both Reliance and Carrefour plan to open many more stores in the next few years. Bharti Walmart, which has overtaken German firm Metro Cash & Carry, the country's largest cash-and-carry operator, meanwhile, has seen some big exits. COO Andrew Levermore, chief ethics officer Nandita Luthra and vice president (general merchandising) Ganesh Subramanian left the firm since last year. Vishal Chowla, vice-president of store planning, and Manoj Kumar, head of operations, too have put in their papers, industry insiders said. Both Walmart and Bharti have been lobbying for opening up of multi-brand retailing to foreign companies for some time, so that the US giant can pick up a stake in Bharti's front-end retail chain Easy Day. Bharti's mainstay telecom firm Airtel has been battling falling profits since the last nine quarters and the company is keen to sell majority stake in retail business to Walmart.

AgriBusiness & Food Industry w July 2012

Devyani International to expand its Swensen’s & Vaango brands

SR (quick service restaurant) chain Devyani International plans to grow its Swensen's and Vaango brands through a market saturation strategy rather than expand rapidly across the country. Swensen's is a US-based luxury icecream retailing brand, while Vaango is a South Indian food retailing brand. DI is the master franchisee for Pizza Hut, KFC, Costa Coffee and Swensen's ice-creams in India, while it owns the Vaango chain of South Indian food outlets. The company plans to add around 140 stores at an investment of about Rs 200 crore in the current fiscal across its five QSR brands. Swensen's, known for its sundaes, currently has seven outlets in Bangalore and plans to enter Chennai and Hyderabad during the next financial year. Similarly, Vaango, which has seven outlets in Delhi will be taken to other regions only after the current fiscal, said Virag Joshi, CEO and President, Devyani International. “We want to achieve operational excellence and better control before expanding to other markets,” he explained. The company plans to invest about Rs 100 crore on expansion of Swensen's chain in the next five years. DI Ltd is an associate company of RJ Corp which has interests in bottling, icecream, healthcare, real estate and education.

AgriBusiness & Food Industry w July 2012

Retail

News Carrefour aims to capture West, South

rench retailer Carrefour is planning to grow its footprint in India. After marking its presence in four locations in North India, the world's second largest retailer is reportedly eyeing Pune and Bangalore to set up shop next. Carrefour plans to have over 3,00,000 sq feet of retail space under its retail umbrella by 2013. The new stores will give the company a deeper foothold in the Indian cash and carry business. Land has been identified at both the locations and work will commence soon. The stores will be ready for operation by early 2013,” sources close to the development said. Carrefour has two

stores up and running in India — in Delhi's Seelampur area and Jaipur. Its stores in Meerut and Agra, the other two northern cities, will start operations later this year. “Carrefour is gearing itself up for opening up of the multi-brand retail sector. Also, with the economic crisis in Euro zone deepening, Asia would make most profitable business for the company both for retailing and sourcing,” sources said. Harminder Sahni, Managing Director, Wazir Advisory said, “The market potential is huge. Carrefour should focus on building supply chain and backend infrastructure. If the company is making such an investment it will help the sector grow.” In December 2010, Carrefour had set up its maiden outlet in Delhi's Seelampur area. The 56,000 sq. ft. store houses over 10,000 stock-keeping units. The Pune and

Bangalore stores will have more or less the same retail area as the Delhi store. In contrast, German retailer Metro has 10 stores including an outlet in Delhi, while Wal-Mart has 17 stores largely in the West and North. Both Wal-Mart and Metro have on separate occasions said that they want to expand their reach in the country. A Technopak study says that retailers from semi-urban and rural locations travel about 40-50 km to the nearest wholesale market for sourcing. Sources note that Carrefour is also looking to step up its vendor base and sourcing from India. The company has about 600 vendors. It sources and exports products worth $200 million from the Indian market. These include field fresh vegetables and garments among others. Carrefour is the second largest retailer in the world, with revenues topping €90 billion (over Rs 6,25,000 crore).

FDI in multi-brand retail can lift economy: Kaushik Basu

hief Economic Advisor to the Union Finance Ministry Kaushik Basu said that a couple of big bang reform moves such as allowing foreign direct investment (FDI) in multi-brand retail could lift the mood of investors even if the economy is showing signs of slowing down. “It (FDI in retail) may not be the last word on reforms, but an announcement like that can cause the mood to shift,” said Dr. Basu. Dr. Basu explained that announcements such as these could

address “negative investor sentiment,” as opposed to specific policy instruments such as interest rate cuts, which could be used to address macro-economic variables such as inflation or overall economic or industrial growth. “Since a large part of the problem (of economic slowdown) is not because of the economic fundamentals but because of the negative mood, an announcement such as allowing FDI in multi-brand retail could play a big role,” argued Dr. Basu. Citing data on economic growth, Dr. Basu pointed out that India “has not lost its position in the pecking order among the BRICS countries.” India is still ranked second among the 41 big countries in the world, according to the Economist magazine, he said. “It is just that India has slowed down with the whole world,” he said. “I am not denying that we may have taken a few missteps, but by and large it is a global problem,” Dr. Basu, said.

Mark your dates 25-26-27, August 2012

www.graintechindia.com

AgriBusiness & Food Industry w July 2012

Referring to the crisis in Europe, Dr. Basu said Europe would face its next big test in 2014-15 when the $1.3 trillion that was extended to more than 800 banks came up for redemption. Investors were averse to investing in anything other than U.S. Treasury Bills, German Bunds (Federal bonds) or in gold, even though they offered low rates of return, he observed. “Of course, we need to do some firefighting, but we also need to do some rethinking and (design) big strategies,” Dr. Basu said. India, he said, needed to “reposition” itself. “When the world comes down in two years as a result of the crisis in the eurozone, can India come out on top?” “This can be done by investing in fundamentals such as education and human capital.” “China has realised this. Every day you hear of stories about Chinese universities raiding American universities and taking talent back to China,” he said.

3rd

Gayathri Vihar, Palace Ground, Bangalore, India

Corporate

News HUL to integrate UFS with OOH to drive food portfolio

i n d u s t a n Unilever Ltd (HUL) is integrating its food services business, Unilever Food Solutions (UFS), with the Out of Home (OOH) arm. This, the company feels, will help drive the foods portfolio by creating new opportunities to push packaged food brands like Knorr and Kissan. "The integration will enable us scale up with speed and have an aligned portfolio and innovation-driven pipeline across the retail and institutional business," said an HUL spokesperson. OOH will also be able to leverage UFS' expertise with category and channel strategies, talent and training capabilities and learnings across markets," he added. The game plan is to extend OOH's reach beyond institutional vending into the food & beverage (F&B) consumer retail space-think cafes and ice cream parlours -- and leverage the portfolio of HUL's F&B brands. The restructuring is the first revamp of the foods business since Geetu Verma, HUL's first external executive director (foods), came on board in September 2011 from PepsiCo. Company insiders say

HUL is implementing Unilever CEO Paul Polman's suggestion made a year ago on an Indian visit of driving OOH growth to ramp up revenues of the foods business. Polman is keen to drive growth of foods in emerging markets - which today are more successful in home & personal care (HPC) - thereby reducing the over-dependence on the sluggish developed economies. HUL, whose foods sales grew in single digits in fiscal year 2012 - personal care was the primary driver with 17% growth - is still hunting for that magic recipe. Said Kannan Sitaram, operating partner at India Equity Partners, a private equity firm, who had spent more than two decades with Unilever: "HUL has yet to chalk out a clear foods strategy. It needs to replicate the incubation strategy it followed in personal care -- with hand wash, body wash, conditioners and the like -- in foods, and scale up promising categories that are small now." In fiscal year 2012, the foods portfolio grew by 8% and contributed 18% to HUL's bottom line of Rs 21,154 crore. For Unilever, the global foods portfolio contributed 52% to turnover in 2011 although volume

growth did dip a bit. Along with inadequate scale, profitability too is a concern for HUL. In the quarter ended March 2012, profit margins at the before interest and tax level in beverages fell by 124 basis points and in packaged foods by 253 basis points. "As of today HUL is only interested in growing the top line; it is not a big profit centre for the company yet," said Anand Shah, equity analyst tracking fast moving consumer goods at Elara Capital. "The company needs to get into new categories but the Unilever portfolio has its limitations in India," added Shah. Indeed, some of the power brands in the Unilever foods portfolio - like Hellmann's (mayonnaise) and Blue Band (margarine) -- would have limited traction in the Indian mass market. So, other than relying on Unilever labels like Lipton and Knorr, HUL also has to count on home-grown brands like Annapurna (salt and atta) and local categories like idli-dosa mixes to push growth.

Twenty eight Indian Companies participate in ‘Lankapack 2012’

ndian packaging firms, which represented at a packaging industry expo in Colombo, said that there was “significant interest” during the three-day meet for them to continue their engagement with firms in Sri Lanka. “We have received about 200 enquiries,” said V. Sreeram, Assistant Vice-President (Marketing), Hindustan National Glass and Industries, when asked about the quantum of business enquiries. In all, while more than $30 million worth of enquiries have been generated over the three-day meet, many industry insiders feel that this figure is misleading.

“Sometimes one enquiry will materialise. Sometimes multiple enquiries translate into business,” said Kishen Agarwal of Paper Pack Industries, Chennai. He said that he was not merely looking to sell, but also to buy materials from Sri Lanka. As many as 28 Indian packaging firms were represented in the expo that had presence of international Packaging players and a B2B event. It was organised by the Sri Lanka Institute of Packaging. There were two firms from China too. The firm will hold its Chennai edition of the packaging expo from July 13 to

15. Later this year, it will also hold a similar expo in Kenya, from September 17 to 19. Sri Lanka is seeking the help of Indian companies, in a bid to enter the vast Indian and Chinese markets. “I believe our packaging industry can now open itself to the Asian region,” said Rishad Bathiudeen, Sri Lankan Minister of Industry and Commerce, at the inauguration of the expo. The global packaging market is estimated at $696 billion in 2011. Over the next five years, it is expected to touch $800 billion.

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Corporate

News

Bank Parsian stops payment guarantees, trade in jeopardy

ran's Bank Parsian has stopped issuing payment guarantees for Iranian importers who buy Indian goods, because its account that was set up to skirt Western sanctions does not have the necessary funds in rupees. India, exempted from the latest U.S. sanctions against Iran's disputed nuclear programme after cutting crude purchases from Tehran, is the world's fourth-largest oil importer and the second-biggest customer of the Islamic republic. New Delhi and Tehran in January had agreed on a barter-like system to settle 45 percent of their $10 billionplus a year oil trade in rupees, which are not freely traded internationally, and use them to repay Indian exporters of other goods. In this arrangement, letters of credit (LCs) would have guaranteed payments and smoothed trade, which could have helped Iran's economy as sanctions squeeze its oil sales and revenues. India's only other means of payment to Iran currently is in euros through Turkey's Halkbank, after a clearing mechanism in dollars was closed by the Reserve Bank of India under pressure from Washington in

December 2010. "We have decided to stop opening letters of credit because we are committed to pay beneficiaries when they present (the shipping documents for) the goods," Bank Parsian's vice-president for international affairs, Mohajeri Tehrani said. "From two, three months we are waiting to receive funds from them (Indian oil firms). But unfortunately they have not paid so far to our account with (India's) UCO Bank," Tehrani said. Indian refiners are waiting to make payments into the account at UCO Bank until New Delhi implements a planned exemption for them from a hefty local tax, which was announced in March and can take up to 60 days to be put into effect. Tense Exporters Indian exporters had hoped to boost sales under the rupee scheme and create a new market for their goods in Iran, which has reduced imports from western countries under pressure from sanctions, and they are now rethinking their business plans. India is keen to step up exports of food and other items allowed under sanctions such as engineering goods to strengthen its own economy and fix a trade imbalance tilted in favour of Iran.

"Bank Parsian has stopped issuing LCs ... leading to a huge backlog in payments. We are requesting the Indian government to step in and help us," M P Jindal, president of the All India Rice Exporters' Association, said. Jindal said Iranian importers now owe Indian rice exporters about 10 billion rupees ($179.3 million). India, the world's second-biggest rice producer, exports about 1 million tonnes a year of mostly basmati to Iran, a leading importer of the aromatic grain. Parsian's Tehrani said Iran had offered to deposit about 10 million euros ($12.5 million) in the bank's account with UCO bank to settle the dues of Indian exporters. "Unfortunately they (New Delhi) did not accept our request," he said. "We have LCs worth 20 million rupees under negotiation with UCO Bank, but it's been over a month and we have not got a payment," said Pankaj Bansal, a partner at engineering goods maker TMA International. He said there had been discussions over new business worth 50 million rupees, but added: "Now we are thinking whether we should produce the goods for Iran or not ... As per the current scenario I am apprehensive whether this system, not working now, will work in future."

Mexico wants to export avocado to India

he Mexican ‘King Avacado' (fruit) could soon be available in India. Buoyed by huge demand, Mexico is now trying to push avacado exports to India. “We are working on the logistics aspects with the Government of Karnataka, and hope to use the State's knowledge or solution to reduce the transit time of shipments,” Aldo Ruiz, Investment and Trade Commissioner, Ministry of Economy, Mexico, said on the sidelines of the Global Investors' Meet in Bangalore.

Avacado is a fruit native to Mexico, and is largely exported from there. It is very difficult to send fresh product exports to India because the transit time is long, he pointed out. “We are looking for better connectivity to India through Karnataka,” he said. Currently, shipments from Mexico's Veracruz port take 44-50 days to reach Nhava Sheva container terminal in Mumbai. “We are trying to route shipments from Singapore to Mangalore port in Karnataka,” he said.

The preferred transit time would be 30-32 days, added Ruiz. Other challenges in India would include cold storage facilities, which are not yet very well developed, and also ground transportation time which need to be reduced too. Though Ruiz declined to quantify the demand for avacado in India, he said that top retailers from India have shown interest in getting the fruit to the country and have been in touch with Mexican exporters and distributors.

Best Foods’ M P Jindal becomes President of AIREA

ohinder Pal Jindal, Chairman, Best Foods Ltd. has been nominated President of the All India Rice Exporters Association as of 3rd June 2012. Jindal was announced President in waiting by the

AgriBusiness & Food Industry w July 2012

Patron of the Association, B.M. Bhatia in June 2010. The nomination was unanimously endorsed in the Governing Body Meeting of AIREA on 2nd June 2012.

AgriBusiness & Food Industry w July 2012

F&B

News OTA wants Indian Railways to have dedicated ‘Vegetable Wagons’

he Indian Railways should allow a dedicated ‘vegetable wagon' to be attached to each passenger train so that vegetables can be transported from one part of the country to another, according to the Organic Trade Association (OTA). This move will help soften prices by 10-15 per cent for organic produce and 30 per cent for conventionally produced vegetables. This proposal comes when retail inflation shot up to 10.32 per cent in April on substantial rise in prices of vegetables, edible oils and milk. OTA, a Jaipur-based trade body of organic food producers, farmers, retailers and suppliers, plans to take up the ‘vegetable wagon' proposal with the Railway Ministry. “Everyone has the right to have good food.

However, organic food is considered the food of the rich as it is expensive. “We want to break this notion. Hence, we need the Government's support,” said Mukesh Gupta, OTA President and Executive Director of the Morarka Foundation, a nonprofit organisation that promotes organic agriculture and product development. Gupta said that ‘vegetable wagons' will bridge the gap in demand and supply of vegetables. Trains would be able to carry about 300 tonnes of vegetables a day with wastage being reduced to 2 per cent compared with the estimated wastage of 60 per cent in the current scenario. At present, logistics and cold storage are major concerns for the food industry. Gupta pointed out that transporting vegetables from Jaipur to Mumbai by truck costs around Rs 20 a kg, which by train will be less than Rs 5.

Perfetti to set up 4th plant in India

onfectionery major Perfetti Van Melle India is planning to set up a fourth plant in the country. It currently has three facilities in Chennai, Manesar (Haryana) and Rudrapur (Uttarakhand). With all three running to full capacity now, the candy maker is looking to set another facility. Sameer Suneja, Managing Director of the company, however, said, “It will be a little premature to say where, when and how much we will invest in the facility. At present, we are evaluating various options.” Perfetti, which offers eight brands of candies (Alpenliebe, Mentos, Chlormint and Fruitella) and gums (Big Babool, Center Fresh, Happydent

and Centre Shock), closed the calendar year 2011 with a turnover of Rs 1,500 crore. Gums and candies contributed equally. “We have grown more than 20 per cent over the previous year,” said Suneja. On how the company manages input cost pressure, he said that Perfetti is constantly launching newer variants at higher price points, and keeps introducing higher value packs such as bottles and flip-tops. “This helps us save substantially in packaging costs.” The company is also expanding its retail presence by augmenting its reach in rural markets. Snack Entry The candy maker has recently diversified into the Rs 8,000-crore snack category, eyeing a bite of the non chips segment with its ‘Stop Not' Golz. It is an indigenously developed wheat-based product. “We are currently test marketing it in select pockets,” said Suneja. In its category, Stop Not will compete with brands from the stables of ITC, Parle and Haldiram's. Asked whether the company was looking at acquisitions in this category, Suneja said that Perfetti believes in building brands on its own. “Inorganic growth is simply not in our DNA,” he said.

AgriBusiness & Food Industry w July 2012

Speciality Restaurants to open Italian cuisine restaurant chain

peciality Restaurants Ltd is planning to open an Italian cuisine restaurant chain under the name Mizuna. A pilot project in this regard has already begun at Pune. The restaurant is expected to be operational by December 2012. Mizuna will be a bar-cumeatery following a “breakfast to dinner” format. “Based on the response in Pune, we will look to take up projects across the country including Kolkata,” Anjan Chatterjee, Managing Director, Speciality Restaurants, told newspersons here on Wednesday at its IPO road show. Kolkata-based Speciality Restaurants has 82 restaurants across 21 States in the country and one restaurant in Dhaka. It owns six restaurant chains and a confectionery chain. According to Chatterjee, the company will also set up a food plaza in Rajarhat in West Bengal at an expected cost of Rs 17 crore where it will have all the restaurant brands under one roof. Speciality, he said, already has one acre of land for the project and has applied for obtaining necessary clearances. “We expect to start work on the project in another eight months,” Chatterjee said.

F&B

News Malaysia’s Navis buys Kuckreja’s shares in Nirula’s

alaysia-based private equity Navis Capital Partners has taken complete control of homegrown fast food chain Nirula's after buying out its co-owner Samir Kuckreja's stake. Kuckreja confirmed his exit. "I am exploring business opportunities within the hospitality sector...nothing has been finalised yet," Kuckreja, whose association with Nirula's lasted six years, said. A person close to the company said Kuckreja was holding a minority share of less than 10 per cent in the restaurant chain. This could not be verified. Commenting on Kuckreja's exit, Navis Capital Managing Partner Nicholas Bloy said in a statement: "Samir has been an integral part of the company, and was instrumental in growing the brand." Nirula's was among the first fast-food chains in the country which made 'big

boy burgers' and 'hot chocolate fudge' famous. It also pioneered the concept of family-style restaurant when it opened its first outlet in Delhi in 1934. However, over the years, it could not capitalise on its first-mover advantage and began losing ground to multinational fast food chains such as Yum Foods' Pizza Hut and McDonald's, which started investing heavily in the country. Navis bought Nirula's for close to 90 crore in 2006. Post-acquisition, it invested Rs. 30 crore directly, while another Rs. 20 crore was infused by the franchisees for store rollouts, equipment and kitchens. The organised restaurant industry is estimated at Rs. 7,000-8,500 crore, according to a white paper by the National Restaurant Association of India, with organised players accounting for a meagre 2-3 per cent of the overall business. The study estimates that industry size will escalate to Rs. 28,000 crore by 2015, fuelled by increasing disposable incomes and global restaurant companies investing heavily in expanding in India and China. With sales estimated at Rs. 100 crore, the 77-year-old Nirula's operates largely on the franchisee structure, mainly in the Northern states. The chain's 80-odd

stores include dine-in restaurants, pastry shops, ice-cream parlours, hotels and coffee shops. Navis has been backing Nirula's expansion into II and III tier cities such as Meerut, Mussoorie andPatna. In mid-2007, India Hospitality Corp (IHC) had almost acquired Nirula's from Navis, but the deal fell through. Three years ago, Navis had appointed merchant bankers to scout for potential buyers for Nirula's, but found no takers because of high valuation. At that time, it was learnt that Nirula's promoters had pegged a valuation of over Rs. 300 crore. The average holding period for most PE investments is six years and Navis will complete the duration this year. But in an interview with ET last year, Bloy had said that Navis "would not exit Nirula's in a hurry." Admitting that Nirula's had made some 'immature moves' before 2006, Bloy had said that Navis was taking the restaurant chain through a process of 'continuous investments'. Kuckreja, meanwhile, continues to hold the post of president of the National Restaurant Association of India.

Amul to make large chocolate bars

mul India plans to rejig its chocolate portfolio. On the cards is focus on larger bars of over 100 grams to shore up topline and ramping up of chocolate production capacity at Anand. Currently chocolates account for less than two per cent of the group's Rs 12,000-crore turnover. According to Jayen S Mehta, General Manager of Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), the smaller packs targeted at the price-sensitive mass market are found “unviable” in the existing market conditions. Priced between Rs 5 and Rs 20 such packs are witnessing constant reduction in grammage to accommodate the rising input cost.

“The small bar segment is no more competitive. We will be following the international trends (for selling larger bars),” he said adding that the company would, however, maintain a presence in the segment. Amul enjoys 8 to 10 per cent share in the Rs 1,500 crore chocolates

market in India. Though he did not divulge investment details, Mehta said would ramp up production at Anand. The unit, at present, has a capacity to produce 20 tonnes of chocolate a day. In addition part of its requirement is also sourced from Campco Ltd — a joint venture between the State governments of Karnataka and Kerala. “We would look to shore-up our chocolate production capacities in the next six to 12 months. But before that we have to prepare the market for it,” he said on the sidelines of the launch of Amul's chocolate-based malt beverage, Amul Pro.

AgriBusiness & Food Industry w July 2012

F&B

News Costa Coffee to engage customers with fun activities

offee chain Costa Coffee is planning to use everything from live comedy shows to book readings and music concerts to “engage” with customers, as competition heats up in the coffee business. Laughter, music, books and art are the four new consumer engagement verticals created by Costa Coffee to sustain double digit growth in a competitive environment. With separate sub brands under these four

verticals, the Rs 100-crore coffee chain hopes to ‘delight' its consumers besides simply serving them their cup of coffee. Santhosh Unni, CEO, Costa Coffee said, “In a competitive environment we have to delight our customers and so we have developed a consumer engagement strategy across verticals such as music, books, art and laughter.” Costa Coffee has drawn up activities such as comedy shows (Costa Laughaccina) at some of its large sized outlets. This would be followed by other activities like book readings, poetry sessions and music clubs called Rhythm & Brew. “Our next vertical for consumer engagement would be music and we are already talking to music companies who are on the verge of releasing their albums. In book reading, we would be associating with publishers and expect all these activities to dovetail into our coffee business,” said Unni. Rising costs have not helped. “On an average we have taken a price hike of 12 per cent in a year but not all of it has been passed on to the consumer,'' he

added. The UK-based company entered the Indian market by appointing Devyani International (part of the Rs 3,000 crore RJ Corp) as an exclusive master franchisee in 2005. Since its entry, a host of other premium coffee chains have come up and there is also the impending entry of Starbucks. “While there is competition, there will not be a squabble with more coffee chains coming in. The entry of Starbucks will only add strength to the category as it is the number one player while we are the second largest coffee chain. We expect our pricing to be almost similar to that of Starbucks,'' added Unni. In fact, coffee retail will continue to be at the premium end of the market. “There is nothing like a mass segment in the café segment today,” he said. With plans of adding another 50 outlets this year, Costa Coffee is also exploring new locations such as airports, highways and hospitals as potential locations. “We would be spending about Rs 35 crore this year on the new outlets and expect to sustain growth rates at 20 per cent,'' said Unni.

Peruvian Ajegroup launches Big Cola in India

eruvian bottler Ajegroup officially launched its flagship no-caffeine cola brand, Big Cola in India on 13 June. "We are in India, and here to stay," said Sorin Voinea, Director of Marketing (Asia Pacific), Ajegroup, who announced a tie-up with Sony Pictures for forthcoming Hollywood movie 'The Amazing Spider-Man.' Big Cola will launch limited editions of The Amazing Spider-Man bottles in three flavours till August.

For a brand that calls itself Walmart of Beverages, Voinea said the focus in India would not be to take Coke or Pepsi head-on. "We don't compete against them. We are definitely a follower, and are thankful to them for expanding the market globally," said 42-year-old Voinea who doesn't intend to rope in cricketers or Bollywood celebrities for endorsing brand. "We are not a me-too brand. Other cola brands have been associated with Bollywood and cricket. So, if we also do that, we would be losing our differentiation," adds Voinea, who reckons football will work better for Big Cola. So what hope does Big Cola - which is banking on its caffeine-free positioning and a price-tag that is 20-30% cheaper than Coke and Pepsi -- have in a market in which the global giants rein supreme? There's room for more cola brands in the country, said Prathap Suthan, Chief Creative Officer of Bang in the Middle, an independent ad agency. "If the market had 20 colas, yes, then we are talking about an overcrowded presence. But that's not the

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case in India." Not everybody thinks the same way. "It's going to be tough for them," said Santosh Desai, MD and CEO of Future Brands. Beverages is a high-spend category in terms of advertising and marketing, and only if you have deep pockets can you be in the game, he added. The brand, interestingly, was born in the midst of guerilla warfare in Peru. During the 1980s, all cola brands had left Peru because of civil war, he adds. Still for a brand coming from a country infamous for guerilla warfare, it's surprising that the company doesn't have any guerilla marketing tactics up its sleeves. "If we have been doing well globally and in the countries dominated by cola giants Coke and Pepsi, it is not because of any marketing tactics but because of our offering," said Voinea. While Coca-Cola remains far and away the No. 1 seller in Mexico with 69% market share, Big Cola has made its presence felt by occupying a distant No.2 position in the pecking order. Mexico is the world's biggest per-capita consumer of soft-drinks.

F&B

News Kirin Mets: World’s first healthy cola

apan, which boasts of the world’s most stringent food regulatory laws, has approved the world’s first cola for being “beneficial to health”. Colas aren’t really known for their health benefits. They are usually packed with sugar and have been fuelling the global epidemic of childhood obesity. However, according to Japan’s Health and Nutrition Food Association, this Foods for Specified Health Userslabeled cola has zero sugar and contains an indigestible form of dextrin — a compound used as a fibre supplement — which restricts the body’s ability to absorb fat while eating. New cola has zero amount of sugar, and contains indigestible form of dextrin – used as a fibre supplement. Dextrin slows body’s ability to absorb fat while eating also helps in digesting food. It also slows down fat absorption and helps in digestion The country’s food regulatory authority has cleared ‘Kirin Mets Cola’ for

the most sought after Foods for Specified Health Users (FOSHU) label. Japan’s Health and Nutrition Food Association (JHNFA) says getting a highly sought after FOSHU certification — that can sometimes take over six months and cost as much as a million yen — greatly boosts the credibility of approved products. “When consumed with a high fat diet like a hamburger, the drink slows down the body’s ability to absorb fat thereby saving you from putting on weight. It also helps in digesting the food easily,” Akira Yabuki, general manager, department of FOSHU at JHFNA, said. Yabuki added, “We are very strict with who is given the FOSHU label. However, this was the first time that a cola was given such a FOSHU tag. It did satisfy requirements to be healthy. The drink doesn’t contain sweeteners at all and tests have shown that the drink keeps levels of neutral fats low after eating.”

Experts say the cola’s target demographic is youngsters who love cola but are worried about their weight, as well as those who have stopped buying soft drinks for health reasons. A study said that aerated drinks increase the chances of heart disease by 20% among those sipping them daily. Also, people who drink diet sodas every day have a 61% higher risk of bursting a blood vessel. Even children, who consume 40–70 ml of soft drinks a day, may put on 3–5 kilos every year as one cola is equivalent to having seven to eight spoons of sugar at a time.

Tea Forum Chiefs to seek PM’s help in declaring tea as National Drink

ith the Union commerce ministry turning down the demand for declaring tea the national drink, tea associations will seek Prime Minister Manmohan Singh's intervention in this regard. Minister of State for Commerce Jyotiraditya Scindia told the Rajya Sabha that a proposal to declare tea the national drink was examined during 2006 but was not pursued further because objections were raised by a few state governments. It was felt that coffee is a competing beverage and declaring one a national drink will likely be at the cost of the other. A joint forum of Assam Tea Planters' Association, North Eastern Tea Association (NETA), and Bharatiya Chah Parishad have argued that declaring tea as the National Drink can in no way be at the cost of coffee. NETA chairman Bidyananda Barkakoty said that 83 per cent of households in India consume tea as per

the ORG India Tea Consumption Study 2008. He said the yearly coffee production in India is at 302 million kg whereas tea production is at 988 million kg. The annual coffee consumption in India is at 108 million k g whereas tea consumption is at 815 million kg. The per capita consumption of coffee in India is 75 gram whereas per capita consumption of tea is 730 gram. He added that Karnataka, Kerala and Tamil Nadu are the main coffee growing regions and 70 per cent coffee is grown in Karnataka alone. But tea is grown across India. Even the tea industry in Karnataka, Kerala and Tamil Badu is

in no way smaller in size than the coffee industry. Nearly 60 per cent of Indian exports of tea are from Karnataka, Kerala and Tamil Nadu.

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Health & Nutrition

News Are you using safe food & beverage containers?

s most of the packaged food and drinks are kept in plastic containers, an awareness drive becomes vital to let consumers know what containers are unsafe or safe for them. While the government is still struggling to ban the use of polyethylene bags that are choking the ecological system as they are nonbiodegradable, most of the people are unaware of another negative and potentially harmful aspect of plastic-its bottles and utensils. Lack of awareness is the main cause for this harmful ignorance. Just like it is spreading awareness about the dangers of tobacco, it would have been better if the health department has been using tools of media to let people know about the ill effects of not only unsafe kinds of plastic, but also of aluminum and uncoated copper utensils, and using aluminum foil, newspaper and any written pages to keep food items, as all these can initiate health complications. For instance, inc contains lead which is highly harmful. Mercury is also lethal. APEDA has mandatory guidelines for grape exporters to export it minus pesticides but here there is no one to stop people selling pesticides ridden and artificially coloured (they give injections into water melons to make it more red) fruits and vegetables. Even in Delhi, municipal workers burn garbage every morning, though it is banned. The garbage contains plastic, aluminum foil and cigarette packets, among other dangerous things that emit toxic smoke. In developed countries, authorities ban and implement it to protect public health, but here authorities can ban such things but there is none to implement it. Loose edible oil is banned, but go to any middle class locality in Delhi and Mumbai and you can see kirana shops openly selling it. Even if awareness drive is implemented, consumers would be able to know a lot of good things. But even that is rare. PET (PolyethyleneTerephthalate) codes are Plastic Recycling Codes. To know what code your bottle or jar has, just see at its bottom side. You will notice a triangle with a single digit

number. Match it with the following facts to know what is best for you and your family. PET 1 It is for one time use only. PET 1 plastic is used to make soft drinks bottles, singleuse water bottles and sports drink bottles. Caution: Extended use increases chances of leaching and bacterial growth. Recycle Rate-23 per cent. PET 2 It is safe to use. Also known as HDPE (high density polyethylene), this plastic is used to make grocery bags, detergent bottles, and milk and juice jugs. Recycle Rate-27 per cent. PET 3 Avoid it. Nicknamed as Poison Plastic, it contains many dangerous toxins. PVC or Polyvinyl chloride is used to make garden hose, cable sheathing, window frames, blister packs, blood bags and meat wraps. Recycle Rate-1 per cent. PET 4 It is safe to use. LDPE (Low density Polyethylene) is used to make heavy duty bags, drycleaning bags, bread bags, squeezable bottles, plastic food wrap. Recycle Rate-1 per cent. PET 5 It is safe to use. PP (Polypropylene) is used to make Medicine bottles, cereal liners, packing tape, straws, and potato chip bags. Recycle Rate-3 per cent. PET 6 Avoid It. PS (Polystyrene) is used to make CD and video cases, plastic cutlery, foam packaging and egg cartons. Caution: It may leach styrene, a possible human Carcinogen, which can be a hormone disruptor. Recycle Rate-1 per cent. PET 7 Avoid it. Dubbed as ‘Other PC’, this plastic is used to make baby bottles, water cooler bottles and car parts. Caution: leaching of Bisphenol A which appears to cause chromosomal damage. Recycle Rate-1 per cent. Useful Tips • Store food and water in glass or stainless steel containers whenever possible.

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• Minimize or eliminate exposure to plastics with code 1, 3, 6, and 7. • Do not use products (especially Baby Bottles) identified with No. 7. • Avoid keeping food items in aluminum foil and written pages. Glass is the most eco-friendly packing material: PEI Study The human toxicity potential of glass packaging is the lowest compared with plastic, metal and paper, says the first-ever lifecycle assessment study of the Indian glass industry. The study was commissioned by the All India Glass Manufacturers' Federation, led by companies such as Hindusthan National Glass, Piramal, AGI Glaspac and Vitrium Glass, to assess the environmental impact of glass as a packaging medium. It collected data from 28 furnaces and covered 72 per cent of the domestic glass production. The assessment, carried out by independent global expert PE International and released here on Monday, says that glass packaging has the highest green potential and the lowest global warming risk, compared with plastic, paper and metal, especially when it comes to processed food and beverages. “Glass is the most suitable packaging medium to retain product quality and is least damaging to the environment. Also, it is endlessly recyclable,' said Juergen Stichling, Global Director, PE International. He said increased use of recycled glass in India from 35 per cent at present to 75 per cent will reduce the industry's carbon footprint by almost 40 per cent. Mukul Somany, President of the Federation, said the industry was planning to take measures to improve the green profile of glass. These include adoption of technology to reduce glass weight from five per cent to 20 per cent, increase recycling from 35 per cent to 50 per cent, and raise the use of natural gas as fuel instead of furnace oil. The country's glass packaging industry's estimated value is over Rs 6,000 crore, with the country among the top 15 markets for glass packaging globally. In India, though, plastic is still the preferred medium for packaging processed food and beverages with 48 per cent share, followed by paper, metal and glass.

Health & Nutrition

News Pizza with Oregano can lessen prostate cancer risk: Study

t may not be low in calories, but eating pizza could actually be good for you — only if you add oregano to it, for a study by an Indian-origin researcher says the seasoning is a powerful weapon against prostate cancer. Supriya Bavadekar and colleagues at Long Island University have found that oregano, a seasoning commonly used in pizza and other Italian food, has the potential to become a powerful weapon against prostate cancer. Prostate cancer is a type of cancer that starts in the prostate gland and usually occurs in older men. Recent data shows that about 1 in 36 men will die of prostate cancer. Current treatment options for patients include surgery, radiation therapy, hormone therapy, chemotherapy,

and immune therapy. Unfortunately, these are associated with considerable complications and/or severe side effects. Baacadekar and her team studied carvacrol, a chemical in oregano. Added to prostate cancer cells in the lab, it rapidly wiped them out. Left for four days, almost all the cells were killed. Tests showed it triggered the cells to kill themselves. The oregano chemical could now be used itself as a treatment against cancer, or as the blueprint for a more powerful drug, say the researchers. Bavadekar, a pharmacologist, said, “Some researchers have previously shown that eating pizza may cut down cancer risk. This effect has been mostly attributed to lycopene, a substance found in tomato sauce, but we now feel that even the oregano seasoning may play role.

“If the study continues to yield positive results, this super-spice may present a very promising therapy for patients with prostate cancer. A significant advantage is that oregano is commonly used in food. “We expect this to translate into a decreased risk of severe toxic effects. “But this study is at a preliminary stage and further experiments are needed to get a better idea of uses in the clinic.”

Old varieties of fruits & Vegetables contain more nutrients: Study

l d e r varieties of fruits and vegetables may be considerably healthier than their modern supermarket equivalents, a new study has claimed. A pilot study found that an unfashionable dessert apple that dates back to Victorian times had ten times more of a disease-preventing chemical than its newer, shiny-skinned equivalents. A team of scientists will now undertake a three-year study, examining older varieties of apples, bananas, onions, mangos and teas. It has already been found that the Egremont Russet apple, which is often used to make cider, contains considerably more phloridzin than modern glossy fruits. The chemical increases the absorption of sugar from the digestive system into the blood, and can reduce the risk of type-2 diabetes. While the Egremont Russet is widely available, the researchers stressed that it has not been intensively farmed for a higher yield and pristine appearance, which can substantially reduce nutrient levels. The scientists at Unilever, Kew

Gardens and Cranfield University in Bedfordshire, believe “pre-domesticated” fruit and vegetables eaten in years gone by had higher levels of hundreds of chemicals that help prevent disease. These include salicylates, which are used to make aspirin and play a key role in fighting cancer. Today, some massproduced fruits and vegetables are stored for months at a time in cold conditions to slow the ripening process. This process depletes the vitamins in the skin. In addition, supermarkets select the best-looking stock when, in fact, plants produce more nutritious chemicals if they have bruises, as these are produced as a defence mechanism against threats. Leon Terry from Cranfield University said a “paradigm shift” was required to promote foods based on their healthboosting properties, not their appearance. “In the Stone Age

people would have eaten 20 or 25 different types of fruit and vegetables every day. Now we tend to eat a few of the same ones all the time,” said Mark Berry, lead researcher of the study.

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Marine

News Fisheries output touches 10 MT mark

isheries output in the country could touch the 10-million-tonne-mark soon, the Minister for Agriculture and Food Processing Industries, Sharad Pawar, has said. From 6.5 mt six years ago, the output increased to 8.4 mt last year. Addressing a gathering to mark the seventh meeting of the governing body of National Fisheries Development Board (NFDB) here on Wednesday, he said that the segment was growing at about 5 per cent. The Government plans to set up hygienic fish trading platforms in cities such as Nellore. Fish markets would come up at Rajahmundry,

The Union Minister for Agriculture and Food Processing Industries, Sharad Pawar and the Union Minister of State for Agriculture, Charandas Mahant chaired the 7th meting of governing body National Fisheries Development Board in Hyderabad

Kulgaon (Maharashtra) and at Salt Lake City (West Bengal). The Government also proposes to set up a National Freshwater Fish Brood

Bank (NFFBB) at the fish farm of the Department of Fisheries at Kausalyaganga in Orissa. It would be managed by NFDB in association with CIFA (Central Institute of Freshwater Aquaculture) at Bhubaneswar. The executive committee of NFDB had given the in-principle nod to establish the bank. During 2011-12, the Government spent Rs 100 crore for development of fisheries through National Mission for Protein Supplements. Under this scheme, cage culture in reservoirs and intensive aquaculture in ponds and tanks were being promoted. This scheme would be continued in 2012-13 with an outlay of Rs 200 crore.

Govt should promote Seafood Export -- Dr. N.S.INGALE

he fishing industries include any industry and activity concerned with taking, culturing, preserving, storing, processing, transporting, marketing of fish items. It also includes recreational, subsistence, commercial fishing and harvesting. The commercial activity is aimed at the delivery of fish and other seafood items for human consumption. Directly or indirectly, the livelihood of over 500 million people in developing nations depends on fish and pisciculture. Three principal fields: The commercial field: It comprises corporations and individuals associated with wild-catch and pisciculture resources and various transformations of those resources into items of sale for fish industries. It is also referred to as the seafood industries, although non-food items such as pearls are also included among its items. The traditional field: It comprises corporations and individuals associated with fish resources from which aboriginal people derive items

in accordance with their traditions, generally adopted by fisherman. The recreational field: It comprises corporations and individuals associated for the purpose of recreation, sport or sustenance with fish resources from which items are derived that are not for sale but only for advancement purpose of these activities. India has vast undertaking for fisheries from both inland and sea resources. It has large sea items and processing undertaking with varied fish resources along its 8041 -km long coastline, 28000 km of rivers and hectares of reservoirs and brackish water. Fish units mostly exist in the smallscale field as proprietary/partnership firms and fisherman cooperatives. Over the last decade, the organized corporate is becoming increasingly involved in preservation, processing and export of coastal fish. India is trying to triple the size of processed food field to raise its level of processing of perishables from 7 per cent to 25 per cent, value addition from 22 per cent to 45 per cent and share in global food trade from 1.5 per cent to 3.5 per cent by 2025.

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Analysis of Indian Seafood Export Strength: A major exporter Cost competitive Training and Development Initiatives (CMFRI, CIFA, CIFT, CICRI, CIBA) Export subsidies (DEPB, DES etc.) Weaknesses: Poor Technology Poor quality control in production Undeveloped cold chain Inadequate sea and airport infrastructure Threats: Loss of export opportunities Opportunities: EU is an emerging market for Indian fishery products. As India is world's third largest producer of agricultural products and has large production base for a variety of raw materials covering food crops, commercial crops and fibers, removing its weaknesses is vital to put it at the top on to the export map. (The author is a Professor at Symbiosis Institute of International Business, Pune)

Dairy

News Amul’s turnover spikes up

mul has crossed the $2.5billion mark with India’s b i g g e s t dairy brand reporting a turnover of Rs 11,668 crore in 2011-12, ended March 31, 2012, out of which Rs 9,901 crore were paid back to 32 lakh farmer members of milk unions. Announcing the annual results after the 38th annual general body meeting of Gujarat Cooperative Milk Marketing Federation Ltd, which markets the Amul brand, its Chairman, Parthibhai Bhatol, said that the turnover of FY12 was 20 per cent higher than that in 2010-11, Rs 9,775 crore. In 2012-12, GCMMF plans to achieve a turnover of Rs 14,400 crore. At a time when farmers in other States were struggling to make their milk

business viable in the absence of good returns, their counterparts in Gujarat are rejoicing over a 58 per cent increase in their milk prices over the last three years, he said in a statement. Member farmers of GCMMF received a price of Rs 468 per kg of fat for their milk production this year, the highest price being paid to farmers in the country. Last year, GCMMF initiated its largest distribution expansion exercise to extend its reach to smaller towns and semi-urban areas. Apart from the 750 distributors added in dairy and fresh products segment, GCMMF also added 150 super distributors through the implementation of its new ‘hub & spoke’ model, to reach the smaller markets. In 2011-12, 965 new Amul Parlours have been added, taking the total strength to 6,315. Apart from the 170 parlours at railway stations and 303 operating at

various centres of excellence, Amul also has 600 air-conditioned icecream scooping parlours, making it the largest single brand retail in the country. GCMMF will be investing Rs 3,000 crore to set up nine processing units in the next four years. “This would enhance our milk handling capacity from the existing 145 lakh litres per day to 180 lakh litres per day,” Bhatol said. Currently, dairying contributes 26 per cent in agricultural output but still receives only 12 per cent of the public expenditure on agriculture. Exempting income-tax on dairying, as in case of agriculture, and reduced VAT rates on consumer products at 12.5 per cent, would help boost dairy sector and ensure better returns to milk producers and consumers, he added.

Govt removes ban on export of milk powder

mid surplus availability, the government recently lifted ban on export of skimmed milk powder (SMP) to improve finances of dairy firms and help milk producers. The decision to this effect was taken by the Cabinet Committee on Economic Affairs (CCEA). "It has been decided to lift ban on export of SMP," Agriculture Minister Sharad Pawar said. The government had banned SMP exports in February 2011 to contain rise in domestic milk prices. When asked if there was any quantitative restriction on export, he replied in negative. Pawar said the Commerce Ministry has also been asked to provide incentives to the exports of SMP in line with other farm produce. The ministry has also been asked to examine the possibility of imposing import duty on SMP, he added. The dairy industry has been facing liquidity crunch as it could not make profit through sale of skimmed milk powder due to steep fall in domestic prices following surplus supplies. Domestic prices of SMP have declined to

Rs 150 per kg now as against Rs 190-200 per kg in the same period last year. Sterling Agro Industries Managing Director Kuldeep Saluja said, "The move will benefit both industry and farmers. There is excess stock of over one lakh tonnes lying with industry. The export will help improve liquidity." Milk production in India, the world's biggest producer, is estimated at over 120 million tonnes in 2011. Exporters may get subsidy Although, the notification has not mentioned about the quantity to be exported, but it is believed that 60,000 tonnes will be exported. The notification is also silent on the subsidy issue, although there was rumour that exporters might get subsidy in order to compete in the international market. The notification says, “Entry Number 38 in the ITC (HS) Classifications of Export & Import Items has been bifurcated and an entry number 38.01(new entry) “Skimmed Milk Powder” is introduced. Export of new entry namely Skimmed Milk Powder has been made free.” ITC (HS) means

Indian Trade Clarification based on Harmonized System of Coding was adopted in India for importexport operations. This notification follows a decision earlier this month. This decision aims to benefit the dairy industry which is facing liquidity crunch. Meanwhile, according to the notification, exports of milk and cream, concentrated or containing added sugar or other sweetening matter, including whole milk powder, dairy whitener and infant milk foods are still prohibited. Export of skimmed milk powder was banned in February 2011 in order to arrest increasing milk powder. Domestic prices of SMP have declined to Rs 150 per kg now against Rs 190—200 per kg in the same period last year. Milk production in India is estimated at over 120 million tonnes in 2011 which is highest in the world.

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DAIRY

News DKMUL expresses concern about milk disparity on World Milk Day

Ravikumar Kakade, Executive Director, DKMUL, speaking at a function organised to mark World Milk Day in Mangalore

hile observing World Milk Day on June 1 in the district as a celebration of the ubiquitous liquid, the Dakshina Kannada District Cooperative Milk Producers' Societies' Union Limited (DKMUL) expressed concern at the disparity in the consumption and production of milk here. “While the State boasts of surplus milk production, Dakshina Kannada does not and lags behind the rest of the State. Even though we have increased the production to nearly two lakh litres per day, around one lakh litres have to

be brought from unions in other districts to meet the demand here,” Raviraj Hegde, president, DKMUL, told a gathering at the Union's office in Kulshekar. He stressed on the need to increase milk production, which would ultimately benefit the farmers themselves. Another area of concern, he said, was the diminishing consumer interest in milk and its products. “People have started replacing buttermilk with soft drinks. Not many people were aware of the health benefits of the different types of milk available,” said Hegde. Elaborating on the decreasing milk consumption, Ravikumar Kakade, Executive Director, DKMUL, said in terms of per person consumption of milk, south India pales in comparison to north India. “Here, the consumption was 240 ml per person, while in States of north India, it was more than 400 ml per person,” he said. He added that better marketing and packaging of milk and its products would reduce this gap. A step towards achieving this was the development of “Nandini Mango lassi”. Made from mango pulp and milk, officials

of the Union said the product would be commercially available soon. The day began with the distribution of milk to orphanages Bhagini Samaj, Jeppu, Little Sisters of the Poor, Nanthoor, and Mangala Jyothi Integrated School, Vamanjoor. On the occasion, a booklet listing numerous Nandini products, as well as their nutritional benefits was released. Dealers and distributors of milk products were awarded for high sales while those who had won gold and silver coins in the lucky draw organised for consumers of Nandini sweets were felicitated. President of the Dakshina Kannada Milk Producers' Union Raviraj Hegde said on Friday that milk was a better than any other drinks. Inaugurating the World Milk Day function organised by the union at the Manipal Pre-University College, Hegde said the union produced Nandini brand of milk and other milk products, including flavoured milk and sweets. Principal of MPM College Dayananda Shetty, principal of Manipal Pre-University College Vemanarayana, vice-principal Vedavati and officer in the Department of Education Ashok Kamath were present.

Bikaner gets Emu Breeding Centre

fter establishing a quail farming centre some time ago, the Rajasthan University of Veterinary & Animal Sciences (RAJUVAS) in Bikaner has started an Emu Breeding Centre at its veterinary college premises. The initiative is to enhance the subsidiary income of farmers through diversification of farming systems. The university has plans to introduce duck farming as well soon. Initially, 30 pairs of emu birds have been brought to the University for breeding. Emu. These birds are omnivorous and eat leaves, vegetables, fruits, insects and worms. They can be easily maintained on modified poultry feed. RAJUVAS Vice-Chancellor A. K. Gahlot said the university has plans to undertake further research on emu's growth, nutrition, health, management and other aspects so that appropriate technologies in its rearing can be imparted to Rajasthan farmers. Inaugurating the emu breeding

centre, Prof. Gahlot said in due course emu chicks would be made available to farmers. At present the State's farmers have to pay high prices to procure chicks from other States. The University plans to make starter birds to the farmers at low cost. The University would also conduct training programmes for farmers so that new farmers are attracted to take up the practice. “This enterprise will increase the subsidiary income of the farmers as well as introduce a component of diversified animal husbandry in their farming systems,” Prof. Gahlot said. At present a very small number of farmers are engaged in emu farming but the practices they follow are of those of Maharastra or Andhra Pradesh farmers, which may not be suitable for the resource and climatic conditions of Rajasthan. The birds reach their full size by the end of the first year. They grow up to 5.5 to 6 feet with a weight of 40 to 70 kg. Laying period in India starts after 18 to 24 months and eggs are laid during September to

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February. Eggs are dark bluish green in colour with a weight of 450 to 700 gm. RAJUVAS public relations cell convener R. N. Kachwaha said the University also plans to propagate boiled egg or omelette as one egg of emu can provide for the entire family. One bird can lay 20-60 eggs in a season. Incubation period is 50-52 days. The life span is 30-35 years while its productive economic life is of 20-25 years. “Emu meat is healthy with less cholesterol (98 per cent fat free). The meat is lower in fat than chicken, turkey, pork and mutton. At the same time, good quantity of oil can be obtained from a bird,” Dr. Kachwaha pointed out. About 4-6 litre of oil devoid of any colour, taste or odour is available from a bird. The oil has penetrating properties and is effective as an analgesic, anti-allergic and antiseptic. It is used in ointments, beauty creams and lotions, soaps, hair oils, shampoos, perfumes and massage oils. Traditionally emu oil has been used for treatment of muscle and joint pains.

DAIRY

News Fast cooling can increase egg’s shelf-life: Research

aking just a few seconds to cool freshly laid eggs would add weeks to their shelf life, according to a Purdue University study. The rapid-cooling process, developed by Kevin Keener, a professor of food science, uses liquid carbon dioxide to stabilise the proteins in egg whites so much that they could be rated AA – the highest grade for eggs – for 12 weeks. Earlier research showed that the same cooling technology could significantly reduce occurrences of salmonella illnesses. Eggs cooled under current methods lose the AA grade in about six weeks, Keener said. "There is no statistical difference in quality between eggs as measured by Haugh units just after laying and rapidly cooled eggs at 12 weeks," he said. "This rapid-cooling process can provide a significant extension in the shelf life of eggs compared to traditional processing." Haugh units measure an egg white's protein quality. Keener's results, published in the journal Poultry Science, also show that membranes surrounding the eggs' yolks were maintained for 12 weeks when eggs were rapidly cooled. That membrane is a barrier that keeps harmful bacteria from reaching the yolk, a nutrient-rich reservoir that bacteria could use as a food source. "The structural integrity of the yolk

membrane stays strong longer, which may provide a food safety benefit," he said. "The membrane being stronger would be another defense against bacterial invasion, such as salmonella." The rapid-cooling technology takes liquid carbon dioxide and turns it into a "snow" to rapidly lower the eggs' temperature. Eggs are placed in a cooling chamber and carbon dioxide gas at about minus 110 degrees Fahrenheit is generated. The cold gas is circulated around the eggs and forms a thin layer of ice inside the eggshell. After treatment, the ice layer melts and quickly lowers an egg's internal temperature to below 45 degrees, the temperature at which salmonella can no longer grow. Keener's previous research showed that the carbon dioxide in bicarbonate form significantly increases the activity of lysozyme, an enzyme in the egg white that has bactericidal properties. Traditionally, eggs are at more than 100 degrees when placed into a carton. Thirty dozen eggs are then packed in a case, and 30 cases are stacked onto pallets and placed in refrigerated coolers. The eggs in the middle of the pallet can take up to 142 hours - nearly six days - to cool to 45 degrees, Keener said. Keener said a 2005 US government report showed that if eggs were cooled

and stored at 45 degrees within 12 hours of laying, there would be about 100,000 fewer salmonella illnesses from eggs in the nation each year. Rapid cooling could also increase the ability to export eggs to places where this isn't possible today. "You could send eggs anywhere in the world if you could get even eight weeks of shelf life at AA quality. We're seeing 12 weeks," Keener said. "Right now, you can't ship eggs anywhere in the world and expect to retain that quality." Keener said with additional funding he would continue to study the benefits of rapid cooling, including inoculating the inside of shell eggs with Salmonella and examining how other proteins in the whites and yolks of eggs are affected.

World’s first GM dairy calf to give lactose-free milk

hinese scientists claimed to have bred the world’s first genetically-modified calf that would produce low-lactose milk in two years. The calf, named ‘Lakes’, was born on April 24 at a lab of Inner Mongolia Agricultural University. “It is healthy and strong,” lab professor Zhang Li said. In May 2011,

Zhang and his research team extracted fetus fibroblasts from a Holstein cow that was 45 days pregnant and genetically engineered the fetus by transplanting an lactose dissolution enzyme into the cell. The engineered fetus was then transplanted into the womb of a cow in July, and Lakes was born about nine

India's Largest Exhibition on Dairy Products &

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months later, Zhang said. “The enzyme can dissolve lactose — the main sugar found in dairy products — into galactose or glucose to ease digestive disorders among the lactose-intolerant people,” he said. Lakes may, therefore, produce safer milk for lactose-intolerant people.

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