While commodities and other asset classes have been taking a hit due to the coronavirus, the food industry also has taken a hit in the Indian as well as global markets. There have been concerns over the APMC market and mandi’s being open and hence could be carriers of the virus.
Countries globally are encouraging contactless delivery when it comes to food catering. In India, the walk-in for restaurants and malls is down to nearly 10-20 percent.
Sanjay Kumar, MD & CEO of Elior India said, “India on the curve for the spread of the pandemic is still lagging the rest of the world which is good news. But having said that, it is probably a given that we will see an increase in the number of cases in the coming months.”
The India food industry is much less regulated than the rest of the world and if there is a very large outbreak, then there would be a crisis.
“The bigger concern would be for the small and medium enterprises to which banks traditionally have not lent money. So, we are going to see a huge working capital crisis in the small and medium enterprises because work from home has kicked in most offices and that has resulted in a significant drop of sale of food at the office cafeteria,” he added.
“Most corporate offices are seeing between 20 to 30 percent of the normal volume of business that they would have been seeing even three weeks ago. So the hit across the food services space is going to be significant,” Kumar said.
Speaking about industry expectation from the government, he said, “What the food industry would expect from the government is more on the fiscal side which is to enable consumption, bring in the input tax credit which was abolished about 2 years ago so that the value chain becomes more organized compared to what it is currently.”