Graphically Speaking

Why cold chains are in hot demand

There is an urgent need for cold storage facilities across the country and COVID-19 just added its own twist

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Published a month ago on Nov 06, 2020 Read

With a prayer, you open a carton of mangoes in August, days after the prime season has passed, hoping that the vendor’s assurance proves true. Surprisingly, you find ripe golden mangoes ready to be devoured for one last time, before the long wait for next summer begins. These mangoes are the lucky few to have made it through our country’s scarce cold storage infrastructure. In India, there is a supply gap of 99.6% in pack houses, 91% in ripening chambers and 85% in reefer freight, all three major components of a cold chain.  

Currently, the overall cold storage (CS) capacity in India stands at about 37 million-39 million tonnes, according to a report by real estate consultancy CBRE. This capacity is used to store food and grocery (F&G) items, and healthcare products such as generic medicines and vaccines. Following the pandemic outbreak, the CS segment is witnessing robust demand on the back of surge in online grocery and fresh food sales. 

However, India seems underprepared. A key reason behind this is the haphazard distribution of CS facilities across states. Almost all of it, that is 91% of the total CS capacity, lies in 10 states. This results in considerable transportation delay, which ultimately leads to spoilage.

According to the report, CS facilities in India are typically meant for single-purpose storage, and thus, remain idle for six months due to seasonality of the produce. In direct contrast, during seasons, these facilities cannot meet the exponential growth in demand. As a result, India witnesses an annual post-harvest loss of agricultural produce worth about $13.16 billion. And, at least 25% of the vaccines expire before reaching doctors and patients. 

In 2018, the government granted the coveted ‘infrastructure status’ to the segment, making it easier for players to avail loans under Priority Sector Lending (PSL) for construction of CS facilities. However, to propel growth, more steps need to be taken, suggests CBRE. This includes – introducing single-window clearance for approvals; giving incentives for product-specific CS facilities; increasing R&D investment; and conducting training programmes among farmers and labourers about handling temperature-sensitive products.

At the current pace, the report estimates overall CS capacity to reach 70 million-75 million tonne by 2023. But, with cold storage of COVID vaccines now coming into the picture, will that be fast enough?