CCT vs. Food Bill It is expected that the National Food Security Bill (NFSB), introduced in the Lok Sabha will impact negatively in the functioning of the grain markets and would adversely impact/interfere in the functioning of these markets resulting in higher leakages. It is reported that the current leakages from the PDS or the […]

About Wrigleys The William Wrigley Jr. Company needs no introduction of its own. Every day we come across several of the products manufactured and marketed by Wrigley consumed by many. Wrigley is a part of food processing industry and was founded on April 1, 1891. At the time of establishment, company dealt in selling household […]

Food prices have increased rapidly in the last 5 years after a long secular decline in food prices relative to world income. Not only have prices of essentials increased but heightened volatility is also being witnessed as stocks have started to run low. Now major organizations like the United Nations and Goldman Sachs are warning […]

Sugar is produced by pressing out the juice from sugarcane & then boiling it into crystals. This process was developed in India around 500 BC. The sugarcane cultivation is believed to have originated in New Guinea, and was spread along routes to Southeast Asia and India. Brazil and India are the largest producer and producer-consumer of sugar respectively. India is the second largest producer of sugarcane next to Brazil. In 2008, the production in Brazil was 645,300,182 tonnes & India was 348,187,900 tonnes. India contributes about 12% of world sugar production and has annual sugar production capacity of 23 million tonnes with a total investment of $11000 million. Presently, about 4 million hectares of land is under sugarcane production. The average yield is around 70 tonnes per hectare. India now has 453 working sugar factories with an average capacity of 3500 TCD (tonnes crushed per day). There has been an increase in the volume of free international trade in sugar, which provides an excellent means of increasing exports. In India over 45 million tonnes of sugar is being traded each year. Sugar production is not the only business of the Indian industry, but it also has a diversified business of power generation and ethanol production. The country has been producing about 1.7 billion liters of alcohol utilizing 75-80% molasses, which is a by-product of sugar production in the country. In 1993, Molasses and alcohol-based industries were decontrolled, but currently are being controlled by state governments.

The Indian food processing industry can be broadly divided into segments like dairy products, meat, poultry & fishes, processed fruits & vegetables, cereals, beverages & confectionery. The demand of processed food is rapidly increasing in the Indian scenario. India is one of the fastest growing economies in the world, this growth is driving income levels to unprecedented levels across all strata’s of society, which has led to high demand of food & a change in the eating habits of people. Also processed food is convenient food, that one can easily have in today’s busy life. The increase in the number of retail food outlets & shopping malls are also a major reason why there has been a gradual shift from the traditionally cooked food to packaged food. The Indian food processing industry was the seventh largest sector attracting foreign direct investment. The beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that.Note most of the FMCG Companies in India are involved in Food Processing as well or are expanding into that area given the massive growth in the future.

The Government on India is proposing to introduce mandatory blending of ethanol in transport fuels to the extend of 5%.This means that the major transport fuel providers like IOC,BPCL and other will have to ensure that 5% of the petrol they sell will be mixed with 5% ethanol.The US is the biggest user of mandatory blending which has recently come under harsh criticism.The reasons given for supporting blending is that it reduces the requirements of fossil fuels which leads to lower carbon emissions,improves energy security and reduces pollution.However none of these advantages are seen in real life.In fact it has the massively negative consequence of increasing food prices which leads to the starvation of the poor globally.The Corn Industry in the USA has become a major lobbying force which makes the US government persist with the policy resulting in sharp increase in corn prices to the detriment of consumers.