“Fueled by increasing agricultural production levels and support from Government, Indian Agricultural Cold Storage Industry promises a bright scope in the long term”.
Being an agrarian state, agriculture is a widely spoken subject in India. Around 58% of population is dependent on agriculture for its livelihood and agriculture contributes ~18-20% to annual GDP of the country. With ~60 soil types of the world, 1,284 mm of annual rainfall, 60+ agriculture export zones, India is poised as a leading producer of agriculture and horticulture produce among its global peers. Moreover, it is pertinent for an agrarian country to possess the right quantity and type of post-harvest management infrastructure to improve accessibility of produce to consumers and avoid wastages and economic losses. An estimate shows that India incurs an annual loss of INR 90,000-100,000 crores every year in wastage of agricultural and horticulture produce owing to poor post-harvest management policies, with 35-50% such economic loss is incurred due to lack of required cold chain infrastructure at farm-gate and hub level.
Cold chain infrastructure includes integrated pack-houses (located near to farm-gate and used for sorting, grading, packing and pre-cooling of produce), cold storage units (for cooling produce as per scientifically recommended temperatures) and reefer transport (for transportation of produce to different distribution hubs). Not only cold chain infrastructure helps in increasing the shelf life of produce, it also minimizes post-harvest losses, ensure better price discovery to farmers and acts as an enabler to food processing sector by assuring streamlined supply in off-seasons of crops.
India had a total cold storage capacity of 32 Mn MT in 2015 (against the requirement of 35 Mn MT, as per study by NCCD and NABCON) and has augmented capacity considerably to 37.4 Mn MT in 2020 with further capacity addition of 6.5 Mn MT expected by 2025. The strong government support in the form of subsidies, financial grants of upto 50% capex coupled with growth in end-user industries of diary & food processing, surging exports of fruits and vegetables and prevalent inefficiencies at grass-root level has intrigued firms to enter this space.
Further, the past decade has also witnessed the entry of many Agri-tech startups focusing on solving industry problems including lack of irregular electricity supply, fixed structures of cold storages and some sector specific challenges as well. The below tables provide a snapshot of few start-ups working in this direction.
While the industry ecosystem is maturing with incumbents focusing on backward integration and augmented value chain ownership, industry also faces certain headwinds in form of high operational expenditure, fluctuations in all-round availability of electricity, unavailability of skilled labor in certain areas, outdated existing infrastructure, lack of controlled atmosphere technology equipped facilities and presence of small unorganized players unwilling to take expansion activities. Further, the impact of COVID-19 restrictions – temporary closure of Mandis, unavailability of labor during harvest, supply chain restrictions for inter-state movement of goods also took a toll on occupancy rates of cold chain units.
Analysts at Ken Research believe that such challenges and risks are short-term in nature and a robust positioning focused on gaining value chain ownership emanating from strong partnerships within ecosystem could yield sound results for firms in the long-term.
Key Topics Covered in the Report: –
Snapshot of Agriculture in India (State wise Production statistics of Cereals, Horticulture, Meat, Livestock and Poultry)
Situation of Farmers in India (Profile of Farmer, Role in Value Chain, Problems and Issues faced in storage of produce)
Overview and Segmentation of Cold Storage Units (By Storage Temperature, Technology, Regional & State wise Distribution)
Demand side and Supply side Indicators of Cold Storage Solutions
Growth Drivers and Challenges to growth of Cold Storage Industry
Cold Storage Demand-Supply Profile of Key States – Uttar Pradesh, West Bengal, Gujarat, Punjab and Andhra Pradesh, Maharashtra, J&K and Himachal Pradesh
Trends and Developments
Union and State Government Support to Cold Storage Sector
Impact of COVID-19 and Future Outlook of Industry
Business Attractiveness at Farm gate level
Recommendations for operating Sustainable Business
For More Information, refer to below link: –
India Agricultural Cold Storage Industry
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Ankur Gupta, Head Marketing & Communications
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