Pulses, flour, biscuits, noodles supply hit due to COVID-19 lockdown

BENGALURU | NEW DELHI: There is an acute shortage of staples like rice, atta and dal, and packaged foods like instant noodles, biscuits and snacks in many retail stores and kiranas across the country. This has been caused by a huge surge in demand for these items, combined with low production in factories and severe transport bottlenecks due to the Covid-19 pandemic induced lockdown.

“Atta is in short supply, followed by packaged groceries like instant noodles and biscuits. All FMCG firms are facing similar problems of supply and manufacturing,” said Mohit Kampani, deputy MD and chief executive (hyper markets) at More Retail.

Dal is seeing a shortage as about 75% of the mills in producing states like Madhya Pradesh, Rajasthan and Maharashtra are closed. “The shortage is also because there is no means to transport the product,” Arvind Mediratta, CEO of wholesaler Metro Cash & Carry India, said.

Nestle, maker of Maggi noodles, said it has no comments to offer. But the company had said last month that operations in some of its locations are scaled down or suspended. Other companies like Britannia, ITC, PepsiCo and Parle are also facing similar production problems. Factories of FMCG companies are running at 20-30% capacity because most labourers have moved back to their native towns and villages.

In some states, the government is not allowing the manufacture of packaged foods and beverages, leading to scarcity of chips and other snacks. This is in spite of the fact that such foods are under essential categories according to the definition of food in the Food Safety and Standards Act, 2006.

“The directives of the Centre are not percolating down to all states. For instance, PepsiCo’s plant in West Bengal is not operational. The other two plants are operating at 15% capacity because there is no labour. The existing inventory has a limited shelf life. Therefore, supplies of packaged food are hit,” said a senior industry executive.

Labour shortage is something that has hit all hard. Britannia MD Varun Berry told TOI last week it was operating at 20-30% of its strength. Parle is currently at 25%. In many cases, labourers are threatened with ostracisation by village heads if they go out, leading the government to ask local administrations to appeal to villagers to allow workers to go to factories.

“We have 14 plants across the country but only a few are operational, with 10% production happening,” said Subhashis Basu, COO of Indore-headquartered Prataap Snacks, one of India’s leading snacks makers. Trucks, he said, are stuck with raw materials as well as finished goods. “Supply chain is a big problem. Although things are getting better, this is not going to go away anytime soon,” he said. Biscuit makers like Parle said many of its distributors are not buying from it regularly, while a large chunk does not have the manpower to send it to the kiranas. In many cases, chain retailers are sending their own trucks directly to the factories to procure goods.