The devaluation of the Indian rupee – to nearly Rs 69
per dollar – has not only caused the import of processed foods to drop
by 37 per cent, but also forced a number of importers to either turn
exporter or shut shop. Consumers too have been bearing the brunt as they
have to shell out more money now.
The situation is explained by a senior official from the State Trading Corporation (STC) Ltd, which is engaged in export and import of processed foods among other things, on the condition of anonymity. He says, “Due to the devaluation of the rupee, it has become very difficult for both small and big importers to import processed foods.”
He adds, “The import of processed food items has come to a standstill. Though their prices in the international market have fallen, Indian traders are unable to import owing to the lack of parity.”
The official further states, “Another reason for the hike in the prices of almost all essential food products is that the demand is more, but the supply is not up to the mark. In order to book profits, importers will obviously pass on the burden to the consumers.”
Amit Lohani, chief executive officer, Max Foods, Delhi, and convenor, Forum of Indian Food Importers (FIFI), talks of decelerating imports and accelerating price rise. He states, “The import of packaged foods has declined by 37 per cent owing to the devaluation of the rupee.”
He points out, “Another factor contributing to our woes is the new set of safety regulations imposed by Food Safety and Standards Authority of India (FSSAI), which are very stringent and have contributed to the deceleration in the rate of imports by approximately 5-7 per cent.”
He further states, “In the last month-and-a-half, the maximum retail price (MRP) of most of the imported products has skyrocketed twice. A month ago, it increased by 60 per cent, and just two or three days ago, it shot up again by approximately 50-60 per cent.”
He adds, “Currently, the hike in the MRP of a number of imported processed foods (including dairy products, chocolates, pasta, cooking oil and juice) is the range of 30-33 per cent. For instance, olive oil imported from Spain and Italy used to cost 60 euros earlier, and now costs 80 euros.”
Lohani informs, “Of the 300 registered importers of foreign food products, nine have already downed their shutters, and if the situation continues to worsen in the coming months, at least 20 more importers will shut shop.”
Mohit Khattar, director, Godrej Nature's Basket, hints at an impending price rise. He comments, “The weakening of the rupee over the last quarter has put immense pressure on the cost of imported processed foods. When we run out of lower-priced stocks and the fresh stocks come in, we can see the increase in their prices.”
He observes, “As retailers, we don't have a choice but to pass the burden on the shoulders of our consumers. Fortunately, even after the weakening of the rupee, our business for the quarter ended June 2013 and the months following it has remained rock-steady.”
Anil Chandhok, director and owner, Chenab Impex Pvt. Ltd, Mumbai, agrees with Khattar. He says, “The MRPs of all essential products will increase by 20 to 30 per cent. The situation has made both importers and consumers price-conscious.”
He opines, “The increase in the MRPs of processed food items will obviously burn a hole in the pocket of the common man, who would have to shell out more money for them,” and talks of a tighter situation, “The situation appears to be favourable for those importers who have already stocked the goods, but as far as new orders and shipments are concerned, things may become difficult for the importers.”
Chandhok adds, “Now it is the responsibility of the government to tackle the problem. It must take business-friendly steps in the interest of both importers and the common man. But I do not think the situation will improve before the forthcoming elections. It will improve only if a stable government comes to power in the next poll.”
Rosilint Joseph, director, Duke Thomson's International, Kolkata, says, “The devaluation of the rupee in comparison with the dollar is making the import of processed foods very difficult for us. The impact will particularly be on the companies which deal in bakery products, edible oils and juices, and there will be a 20 per cent hike in the prices of all processed foods.”
She informs, “The government should take some concrete steps to stop the rupee from weakening further. Unless some concrete steps are taken by the government, both the common man and industries will bear the brunt.”
While most importers are still analysing the situation and finding out ways and means to cope with it, Ruchit Kothari from Ahmedabad has simply opted out of the business. He details, “The weakening of the rupee has made importers skeptical about the future of the import business, and therefore some have become exporters.”
And sums it up, “I started a business of importing processed food recently, but due to the weakening of the rupee on a regular basis, I incurred losses and eventually switched to banking. There is a meagre increase of ten per cent in earnings now, but the expenditure of the common man is rising by 30-40 per cent.”
The situation is explained by a senior official from the State Trading Corporation (STC) Ltd, which is engaged in export and import of processed foods among other things, on the condition of anonymity. He says, “Due to the devaluation of the rupee, it has become very difficult for both small and big importers to import processed foods.”
He adds, “The import of processed food items has come to a standstill. Though their prices in the international market have fallen, Indian traders are unable to import owing to the lack of parity.”
The official further states, “Another reason for the hike in the prices of almost all essential food products is that the demand is more, but the supply is not up to the mark. In order to book profits, importers will obviously pass on the burden to the consumers.”
Amit Lohani, chief executive officer, Max Foods, Delhi, and convenor, Forum of Indian Food Importers (FIFI), talks of decelerating imports and accelerating price rise. He states, “The import of packaged foods has declined by 37 per cent owing to the devaluation of the rupee.”
He points out, “Another factor contributing to our woes is the new set of safety regulations imposed by Food Safety and Standards Authority of India (FSSAI), which are very stringent and have contributed to the deceleration in the rate of imports by approximately 5-7 per cent.”
He further states, “In the last month-and-a-half, the maximum retail price (MRP) of most of the imported products has skyrocketed twice. A month ago, it increased by 60 per cent, and just two or three days ago, it shot up again by approximately 50-60 per cent.”
He adds, “Currently, the hike in the MRP of a number of imported processed foods (including dairy products, chocolates, pasta, cooking oil and juice) is the range of 30-33 per cent. For instance, olive oil imported from Spain and Italy used to cost 60 euros earlier, and now costs 80 euros.”
Lohani informs, “Of the 300 registered importers of foreign food products, nine have already downed their shutters, and if the situation continues to worsen in the coming months, at least 20 more importers will shut shop.”
Mohit Khattar, director, Godrej Nature's Basket, hints at an impending price rise. He comments, “The weakening of the rupee over the last quarter has put immense pressure on the cost of imported processed foods. When we run out of lower-priced stocks and the fresh stocks come in, we can see the increase in their prices.”
He observes, “As retailers, we don't have a choice but to pass the burden on the shoulders of our consumers. Fortunately, even after the weakening of the rupee, our business for the quarter ended June 2013 and the months following it has remained rock-steady.”
Anil Chandhok, director and owner, Chenab Impex Pvt. Ltd, Mumbai, agrees with Khattar. He says, “The MRPs of all essential products will increase by 20 to 30 per cent. The situation has made both importers and consumers price-conscious.”
He opines, “The increase in the MRPs of processed food items will obviously burn a hole in the pocket of the common man, who would have to shell out more money for them,” and talks of a tighter situation, “The situation appears to be favourable for those importers who have already stocked the goods, but as far as new orders and shipments are concerned, things may become difficult for the importers.”
Chandhok adds, “Now it is the responsibility of the government to tackle the problem. It must take business-friendly steps in the interest of both importers and the common man. But I do not think the situation will improve before the forthcoming elections. It will improve only if a stable government comes to power in the next poll.”
Rosilint Joseph, director, Duke Thomson's International, Kolkata, says, “The devaluation of the rupee in comparison with the dollar is making the import of processed foods very difficult for us. The impact will particularly be on the companies which deal in bakery products, edible oils and juices, and there will be a 20 per cent hike in the prices of all processed foods.”
She informs, “The government should take some concrete steps to stop the rupee from weakening further. Unless some concrete steps are taken by the government, both the common man and industries will bear the brunt.”
While most importers are still analysing the situation and finding out ways and means to cope with it, Ruchit Kothari from Ahmedabad has simply opted out of the business. He details, “The weakening of the rupee has made importers skeptical about the future of the import business, and therefore some have become exporters.”
And sums it up, “I started a business of importing processed food recently, but due to the weakening of the rupee on a regular basis, I incurred losses and eventually switched to banking. There is a meagre increase of ten per cent in earnings now, but the expenditure of the common man is rising by 30-40 per cent.”
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