Coronavirus Pandemic & Food Processing Industry – Impact, Opportunities and Dynamics

Amid all the fear and despair that has spread, there is a silver lining when fruit and vegetable exports are returning to normal for this time of year. Although most exports via the sea route have been resumed, the flight routes are not yet viable as prices are still too high. So let's take a look at some of the immediate problems that the food industry may face now.

Demand Side: 

Due to declining incomes, fear of spreading infectious diseases, and rumors spreading, people are increasingly dependent on staples like rice, wheat, millet, jowar, and other unprocessed foods. The demand for comforting or processed foods is low, although the demand for government food is high.

Supply side:

A sudden cessation of production activity in the most affected areas causes disruptions in value chains. The inventory has supported the supply for quite some time, but with current production structures from time to time, it is reasonable to assume that the Covid-19 outbreak period has already depleted the inventory. Such an interruption would cause the general closure of the factory due to the lack of intermediate inputs. . Therefore, the effects of interruptions on the supply side can contaminate aggregate demand, strengthening the first channel mentioned above and threatening economic stability. The general flight to liquid assets has already pushed equity markets into the correctional area in the wake of the rise and uncertainty of risk aversion following the Kovid-19 trauma. Heavy debt exporters are likely to be at the forefront of debt-related financial pressures due to the spread of the virus, especially as currency reserves are trending downward.

Brief Impact on different sectors:

Poultry:

The rapidly growing poultry sector of the Indian agroecosystem and the country has created a global footprint (India is the third largest producer of eggs and the fifth largest producer of broilers). The poultry industry in various parts of the country has been hit by rumors that the coronavirus could spread new poultry consumption, with prices falling significantly. The cost of poultry production in India is temporarily Rs 75-80 per kg. All poultry farmers suffer an average loss as the low price is around 20-25 rupees per kg.

COVID 19 has caused concern and uncertainty about national and international closing exports. Exporters cannot transport cargo in port. Manufacturers and exporters are forced to close the processing plants by a local corporation. Filled containers are on the way, waiting for the port to arrive. Exporters are not at risk of shipping containers because they are unsure of many factors such as loading effort, invoice dispatch, invoice dispatch on the boardwalk.

Closing restrictions for moving vehicles are disrupting the supply chain at several points: hatcheries, food factories, poultry farms, and outlets.

Diary:

The dairy industry in West Bengal, Assam, Karnataka, Gujarat, Maharashtra and other states has been halted as farmers have to face closure rules that will severely affect their livelihood. All hotels, confectioneries and restaurants are closed, so wholesalers do not buy milk from farmers. This has affected their daily routine and the transport of milk to wholesale markets, causing farmers to dump thousands of liters of milk every day.

Dairy producers' problems as a raw material for producing livestock feed are running out and food-producing industries have to stop production. The main reason behind this is the logistical and labor problem of dairy food manufacturers, fisheries and ranchers.

Pulses:

Some workers are at risk of working in factories in remote areas, with approximately 40% of factories in remote areas closed due to labor. People cannot travel because there is no transportation in these areas.

Only 20% of workers are working with a double labor rate and transportation costs are also high.

The blockade interrupts the movement of trucks carrying essential goods. Several owners of cold stores and warehouses complained about the lack of labor. Many workers stay home or move home because they do not want to work for fear of being beaten by the police.

Beverage Industry:

Despite MoFPI's explicit advice, they face significant statewide obstacles to delivering routes. If entire states only allow water and juice, then the beverage and processed food portfolio is part of the grocery and food basket.

They must be allowed to operate plants with all the measures of social distance and sanitary security.

Restaurant and Dine Services:

The large decline in online ordering and services from any ineffectiveness has seriously affected the restaurant industry.

Swiggy and Zomato orders fell 60 percent amid the epidemic. Although both platforms work, at least they work with distribution authorities and restaurant partners.

Kitchens face supply problems and labor shortages, forcing many of them to close stores

Inefficiencies and restaurants in shopping malls have been closed for approximately 3 weeks and this has resulted in the inability to pay rent, bills and wages on time.

Food Consulting:

Food processing consultants are in great demand to help industries meet the new requirements.

Previously, only food processing consultants were required to provide formulation, but now there is a high demand for food processing consultants who handle food packaging, healthy handling, and food shelf life.

Food processing consultants are required to develop immunity to food, organic foods, and supplements.

Opportunities during the current pandemic situation

There is a great demand for organic food products. The Kovid-19 outbreak is making consumers pay attention to what they eat.

Online sales increased 30 percent from last month. Breakfast cereals and bars have increased as people have stopped eating in restaurants due to health problems.

With increased awareness among people to eat healthier, organic food processing companies are now at the forefront and relaunch existing products, such as Alabar, Ginger Oats Cookies, and Chia Turmeric Cookies.

Suggestions for measures to be taken by Government

Delivery of essential goods continued to be a challenge after the blockade was imposed, and the industry required the government to uniformly classify essential items across different states.

If the government allows e-commerce to deliver all the necessary items, including food, cement and medical equipment, companies face difficulties in delivering to their customers.

It is difficult for companies to collect passes for their logistics and distribution staff individually for each state

The food industry supply chain is segregated and dependent on the interstate movement of goods; Disruption from anywhere has a ripple effect and the result is a return to agriculture.

It is imperative to completely restore the food supply chain and allow them to work with adequate security measures and police protection.

Require the support of district officials to travel to factory facilities with adequate safety for factory workers; This will help the company start production and ensure a continuous supply of essential packaged foods throughout the country.