Impact of War on Indian Baking Industry

Amid the ongoing war between Russia & Ukraine, not only has there been loss of lives but it also impacted the economy across the world. The Black Sea port region—an arterial supply route for trade from former soviet states to parts of the globe has also witnessed disruption in operations.

The war has also had a negative impact on equity markets, leading to a surge in prices across industries and commodities like crude oil, base metal, and agricultural products. This further impacts the baking industry, economically and operationally. 

Given that the Russia-Ukraine region is one of the major exporters of agricultural products globally, there is a huge gap and spike in prices of items like wheat, oils & fats, food additives, multigrain seeds, and much more. This further affects the supply of staple products like pasta, flour and bread, making them more expensive in India. 

Impact on manufacturing of baking products:

Being a bakery expert and India’s leading ingredient supplier, Director of ARS Group, Mr. Akshit Gupta is concerned about the future of the Indian Baking Industry. Here’s what he thinks and predicts — 

• Due to hurdles and difficulties in supplies coming in from Russia and Ukraine, there will be a time when reserves will also not be enough to sustain the needs of a country like India with a huge population. 
• There will be a significant impact on tier 2 and tier 3 manufacturers of baking items like biscuits, breads, dry cakes and more. 
• An increase in the price of raw materials and ingredients like refined flour, oils & fats and others is going to lead to an increase in MRPs of finished products like dry cakes, fresh cakes, biscuits and more bring inflation at such times in the economy.

An outlook from the other side of the table — being an Indian producer

Even though there has been a lot of ifs and buts, back & forth of calculations for the future that awaits us, there is also a positive side that Mr. Akshit Gupta speaks of. He says —

1. India can regain the position of being a leading agricultural land and exporter for the world by exporting the majority of wheat, which leads to an increase in domestic prices and coming at par with international levels. 
2. We can predict a reduction in subsidy on food bill as now FCI will not have to buy wheat from farmers. Exporters can now directly purchase it from farmers which helps the farmers get their due directly. 
3. We can foresee an increase in consumption of alternative staple crops like rice, corn, barley, and others. 

“With a robust customer base and demand forecast of bakery ingredients, we at Asha Ram & Sons support the industry and humankind, and pray for a better, peace loving world.” says Akshit.