<p><strong>If you are among those who relish Californian Almonds, Washington Apples, Spanish Olives or Mexican Jalapenos, better be prepared to pay more the next time you buy them. The sharp fall in the rupee against the dollar has made imported food stuff expensive by about 10-15 per cent in the past couple of weeks.</strong></p> <h2 style="font-style:normal"><strong>DOLLAR-PRICED</strong></h2> <p><strong>“Any food item that has a link to dollar pricing has seen a price rise in recent weeks, especially after rupee devaluation,” said a dry fruit trader at Khari Baoli, the wholesale market in Delhi. Thankfully, the impact of the weakening rupee is not that severe on supplementary food products, such as edible oils and pulses, which the country needs to import to meet the demands of the growing population. This is due to the prevailing bearish trend in prices of these commodities at their origins, which has helped offset the impact of the weak currency to some extent. However, complementary food items, such as high-value imported dry fruits, fresh fruits, olives, sauces, beverages and vinegar, which cater to the demands of the burgeoning middle class, are turning expensive.</strong></p> <h1><strong>High value food</strong></h1> <p><strong>“The sliding rupee in a high imported duty environment presents a very difficult proposition for food importers in India, especially those who cater to the complementary market,” said Sumit Saran, Director at the SCS Group, an agri-business consulting firm that represents entities such as Fresh California Grapes and Washington Apples in India. “I think that high-value imported food categories are not geared to take 20 per cent margin falls. What is making the situation even more difficult for importers is the uncertainty of where this slide will end and the general economic slowdown that has reduced discretionary spend,” Saran said.</strong></p> <p><strong>He further added that the importers will be forced to increase prices or cut down imports in the short term, if the situation does not improve.</strong></p> <h1><strong>Demand</strong></h1> <p><strong>The market size for imported food products is estimated at over $2 billion with nuts, dried and fresh fruits accounting for half of it. Rising income levels, dual earning households, increasing exposure to western lifestyles and international cuisines are some of the factors that are driving the demand for imported food stuff. Uday K. Chugh, Managing Director of Vriddhi Speciality Foods Pvt Ltd, which exports and imports food and beverages for institutional and retail use, said the volatile currency has made importers like him turn cautious and plan better.</strong></p> <p><strong>The institutional consumers – such as hotels and restaurants – may take time to adjust to increased prices.</strong></p> <p><strong>“We have been fighting with suppliers to get compensated,” he said.</strong></p> <p><strong>Vriddhi imports products such almonds, peanut butter and jalapeno from the US, vinegar from Italy and wild mushrooms among others.</strong></p> <p><strong>“We plan to reduce our imports by about 25-30 per cent across categories immediately,” Chugh said, adding that the overall situation will be clear August onward, when buying – especially of dry fruits -- picks up.</strong></p> <h2 style="font-style:normal">Pre-orders/gifts</h2> <p><strong>Chugh further said that at present there are not many pre-orders from customers for the forthcoming festive season as they don’t know about their budgets for gifting. Saran believes that increasing product prices, which are anyways high value, because of the 30 per cent plus import duties was never a good option, especially in a sluggish market “Demand will still be there, but India as a destination for marketing and investment especially in the food category is beginning to disappoint global trade analysts and it is a trend that needs to be arrested before it causes further damage,” Saran added.</strong></p> <p> </p>