Commodity Analysis

Demolishing the myths about India’s cold storage shortage

Rajalakshmi Nirmal | Updated on November 04, 2018 Published on November 04, 2018

Pawanexh Kohli, CEO & Chief Advisor, National Centre for Cold-chain Development

India has enough cold store capacity. But many fruits and vegetables, by their nature, can’t be stored beyond a month

There is constant finger-pointing at India’s failure in developing cold storage infrastructure. But Pawanexh Kohli, CEO & Chief Advisor, National Centre for Cold-chain Development, who spoke to Business Line, refutes this. Below are excerpts from his interview that helps clear the air about the bizarre price fluctuations in onions, tomatoes and potatoes.

Is it true that there is not enough cold storage capacity in the country?

No, in reality, we have the world’s largest footprint in cold stores, nearly 37 million tonnes. At an aggregate level, this is what we require, though more could be needed after we organise the back-end aggregation hubs.

Then, where does this impression of the country not having sufficient cold store capacity come from?

People may not fully understand the intricacies of cold chain. The fruit and vegetable production is at about 270 million tonnes. Of this about 200 million tonnes is of produce (including tomato, lettuce, brinjal, lychee, grapes, banana and others) that have a short holding life of less than two to four weeks, even in the best of cold chains. Barring, 5-7 commodities, i.e., potato, dried chillies, carrots, apples, kiwi and certain type of pears, everything else has a far shorter life. So, we currently have sufficient cold storage, if one understands the time matrix and end-use of the goods that flow through it. Managing the throughputs is important. See, though Delhi airport is sized to hold about 15000 people, it is able to throughput 35 million passengers every year. So, when assessing cold stores requirements, we also need to evaluate the utility and bring the overall capacity to efficient use.

So when we have enough cold storage, why don’t we store the commodities?

Barring crops which can be stored for the long term, say, onions, potatoes — which are already being stored — why would you store others with short time spans? Take the example of tomatoes. Even if you stored them and transported them to the market after 15 days, they will not survive the trip. You have to move such fresh produce when it is fresh, young and turgid with water. And one should plan to store them proximate to demand. Such items are not amenable to be stored at source but moved closer to demand.

There is also the complaint that the cold stores are not spread across the country. What do you say about this?

They have been spread as per need…why should it be equally distributed? Why should we have potato cold stores in Kerala, when it doesn’t produce the crop (or others that can be stored for 9-12 months)? Kerala would instead benefit from refrigerated distribution hubs rather than long-holding cold warehouses.

About 90 per cent of the cold stores are designed to warehouse potatoes and dried chillies. So, naturally, they are located where they are produced. These long-holding crops can also be safely transported later on and, hence, be held at farm gate. But greens, leafy vegetables, mangoes or, say, bhindi (ladies fingers), ought not to be stored at farm gate. They need to move fast to distant markets, where demand offers a better price.

Agreed, there are enough cold stores, then why do prices of vegetables and fruits fluctuate every season?

Price is not a factor of production alone; it is a manifestation of both demand and supply. How long can you store tomatoes? Not more than 15 days…and by the 15th day, it is non-saleable. Onions are usually stored in ventilated jalli structures. However, if these are not maintained or the roof is not sufficiently extended, during monsoon, the wind and water can spoil the onions. The price normally rises, post monsoon. If the supply gets disrupted and demand remains high, the price shoots.

What about potatoes?

We have ample storage capacity for potatoes, for domestic demand. However, the production has touched 50 million tonnes, resulting in a huge surplus. Many suggest processing the surplus into chips, but the produce is table ware variety, which cannot be processed, like tomatoes. Table potato has higher sugar and, if processed, can turn black. So, we have to expand into new markets or help farmers opt for crop diversification. India consumes around 40 million tonnes of potato, as per the NSSO household data.

So, how can price fluctuation be countered?

Prices crash when supply exceeds demand; vice-versa results in sharp price rise. As in potato, the single harvest season results in a period of excess supply and, naturally, the price is low. Luckily, the crop can be stored for the long term and, hence, finds its way into cold stores, feeding the consumers until next year’s harvest.

Being highly susceptible to water damage, the price of onion can crash due to water damage or transport failure, impacting supply. An overhang screen in the existing jalli storage structures can ensure that water contact is minimal, while fresh air circulation continues to keep the onions safe. Also, as the supply-chain managers know the onset of monsoon, they could move the onions closer to the market, where it would rain a few weeks later.

In the case of tomatoes, the storage period is limited and it is advisable to keep the inventory dynamic. The fresh produce needs to be pre-cooled and prepared for travel to the market. Luckily, the supply-chain can be organised with more pack-houses and transport system. Tomatoes can’t be moved in gunny bags safely, as they have soft skin and tissue, much like mangoes. They need to be packed in corrugated fibre or cardboard boxes, and the package has to be pre-cooled to buy time to travel longer distances.

For this, pack-houses are needed, as is done successfully for bananas and grapes. After pre-cooling tomatoes to 8-10°C, they are ready for a five-day trip, else, by the fourth day after harvest, they would perish.

What are pack houses? How are they different from cold stores?

The pack-house is like a pooling point to aggregate a viable load. That’s where the produce is sorted, packaged by grade and pre-cooled and, finally, staged and dispatched to the destination. Cold storage receives the packaged goods, buffers the supply line and is a platform for onward delivery. A cold store is designed to only maintain the temperature, after the pack-house brings down the temperature of the goods.

What are the missing links in the market?

We have acute shortfall of aggregation points at the back-end. We have at least two lakh milk pooling points, but merely 450 pack-houses in the country now. As per our assessment, we need 70,000 of those…say, one in every 10 villages, and we have seven lakh villages. However, the government is now moving in this direction by developing GrAMs (Gramin Agricultural Markets), which will function as aggregation and dispatch centres, and thereby feed the cold-supply chain.

This new development will be key to the future of seamless cold-chain delivery systems for fresh produce.

Published on November 04, 2018
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