Processed food exports jump 194%

India's total exports of processed food jumped 194 per cent in the last four years to ¤13.8 billion in 2006-07 from ¤4.7 billion in 2002-03, a KPMG-FICCI report said.

The Ministry of Food Processing Industries (MOFPI) aims to increase India's share in the global processed food trade to 3 per cent in the next eight years from 1.6 per cent at present.

Being a strong agricultural base, India is in a ideal position to take advantage of the growing food trade and become a sourcing hub for food products.

The domestic food processing industry is estimated to grow at 9-12 per cent in the near future. Fruit & vegetable processing, which is currently around 2 per cent of the total production, is likely to increase to 10 per cent by 2010, and further to 25 per cent by 2025.

Value-addition in food products is expected to increase from the current 8 per cent to 35 per cent by the end of 2025. Higher sales growth, increased earnings of the companies, rising exports of agri-processed foods and government policy 31 initiatives have set the stage for a buoyant performance by the food processing industry.

In spite of being the world's second largest producer of fruits and vegetables, the country's performance on the exports front, especially on processed food, remains lacklustre because of age-old technology and lack of adequate infrastructure.

According to industry estimates, the processed food market accounts for 32 per cent of the total food market valued at ¤67.9 billion.

With private equity players joining in the action, foreign direct investment (FDI) in the food sector is poised to breach the ¤2.1 billion market. In the last year alone, FDI approvals in food processing have doubled, according to the report.

According to a Venture Intelligence Report, while the food and beverage sector witnessed PE investments of ¤ 4.2 million in two deals last year, this year has already seen 11 deals worth ¤ 106.4 million.

There appears to be high scope for consolidation in a fragmented market, with most businesses promising good and sustainable returns. In fact, companies are recording higher growth rate from this sector compared to the home and personal care segment.

Large investors and corporations, both Indian and international, are capitalising on the Indian agribusiness as an emerging market with twin opportunities - to cater to the growing Indian middle-class and to export premium processed food.

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FOOD FIR THOUGHT

Ministry of Food Processing Industries (MOFPI) aims to increase India's share in the global processed food trade to 3 per cent in the next eight years

Food Processing Industry is estimated to grow at 9-12 per cent in the near future

Fruit & vegetable processing, which currently acounts for around 2 per cent of the total production, is likely to increase to 10 per cent by 2010