The Hindu : Andhra Pradesh News : Experts see vast potential for food-processing sector

Online edition of India's National Newspaper
Monday, Jun 13, 2005

Andhra Pradesh

Andhra Pradesh

Experts see vast potential for food-processing sector

By Y. Mallikarjun

Call for major infrastructural interventions to become globally competitive; stress on increasing exports

HYDERABAD: With only 2-3 per cent of vegetables and fruits grown in the country being processed, a report on `technology mapping in Indian food-processing industry' has forecast huge growth potential for the sector and called for a common food law and major infrastructural interventions to make it globally competitive.

Analysing the current trends in the global food processing industry vis-à-vis the opportunities and constraints for Indian sector, it says the extent of value addition (through processing) is only 7 per cent in India, compared to 23 per cent in China, 45 per cent in the Philippines and 188 per cent in the UK.

"India maintains this low level of value addition, even though it is the world's third largest food producer, biggest producer of milk and the fifth largest producer of eggs. It also produces 50 per cent of world's mangoes and 19 per cent of banana," says the report.

Global food trade

Pointing to India's marginal role in international food trade with its share of exports being 1.3 per cent, it says that while India is considered the second largest producer of fruits and vegetables, only 2-3 per cent is processed in the country as against 30 per cent in Thailand, 78 per cent in Brazil, 76 per cent in Argentina, 65 per cent in USA and 54 per cent in China. Seven countries share 40 per cent of the world's processed food products export market with US, Germany, France and the Netherlands capturing a major portion.

Rise in demand

Calling for a concerted effort to increase exports, the report, which has been commissioned by the Union Government and prepared by Thilotham R Kolanu and Jayakrishna, says that India is on the verge of assuming an important position in the global dairy industry with the market expected to grow by 20-30 per cent annually. Similarly, export of fisheries products could be increased by $ 3 to 4 billion in the next five years.

Referring to the huge potential of the sector, it points out that the demand for processed food is rising with growing urbanisation and income levels. An average Indian spends about 50 per cent of household expenditure on food items. "It is estimated that the wastage in the horticulture sector is Rs. 23,000 crores which itself is a major opportunity for food processing sector to exploit and convert into value addition."

The limited attention paid to the food-processing sector is a part of the reason for the loss of 30 per cent of fruits and vegetables during various post-harvest stages. However, in spite of barriers, the industry has achieved a growth rate of 8.7 per cent in terms of value and 10 per cent in volume terms.

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