Winning consumer confidence back may take 12 to 18 months: Cargill India chief

T V Jayan New Delhi | Updated on March 31, 2020

Cargill helping smoothen inter-State supply chain disruptions

Even though the Centre, State governments and local authorities are trying their best to ensure the continuity of supplies, including food, following the Covid-19 outbreak, there are still some challenges around transportation, particularly regarding inter-State movement of raw materials, ingredients, packaging material and finished goods, Simon George, Cargill India President, said on Monday.

The global economy could take a while to recover, even after the coronavirus has run its course, as the focus would be on winning back consumer confidence. This could take anywhere between 12 and 18 months, he said.

The Cargill India chief said the firm worked with government authorities last week to smoothen supply chain disruptions and hoped that things would become even better this week.

This needs immediate attention to ensure that factories operate smoothly and logistics operations are not hampered, he added. Across the country, Cargill has 12 manufacturing locations for producing food and non-food items.

“We are working hard to keep our operations running, as we supply essential commodities like edible oil, wheat flour, feed for dairy, poultry and aqua farmers in India, which are critical to feed people and animals,” said George.

Food service demand down

According to him, the situation is rapidly changing as the pandemic unfolds. “We are witnessing a surge in consumer demand which we are trying to supply to. People want to ensure food safety in this time of crisis and rightly so,” he said.

On the other hand, food service demand is significantly down. If there is a deflation, it will certainly create a pipeline risk and would increase carrying cost. Most importantly, it would create risk aversion on the part of players to carry required inventory to the service market.

Besides, Cargill has halted many non-essential operations. Production of bio-industrial solutions, native starch used by the paper and textile industry as well as liquid glucose, majority of which goes into confectionery products, has been stopped temporarily.

Another business of Cargill that has taken a hit is poultry feed. “It is very unfortunate that poultry farmers and the entire poultry supply chain is facing this unprecedented decline due to a rumour that has no scientific rationale (rumour that chicken/egg consumption can spread Covid-19),” George said.

Published on March 31, 2020

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