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India set to exhaust cold storage for potatoes

India set to exhaust cold storage for potatoes

India is reportedly on the brink of exhausting all of its cold storage space for potatoes. Due to low prices across the country, India’s growers are opting to place their potatoes in cold storage as they wait for the market to rebalance. 

Ashish Guru, senior vice-president of the Federation of Cold Storage Association of India, said, “Arrivals have flooded markets in various parts of the country such as Gujarat, Bengal, Punjab, Bihar and Uttar Pradesh. Most of the arrivals have been diverted to the cold storages.”

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India’s Potato Mission fails

potato india

India’s Potato Mission appears to have been a disappointing failure. The government initiative, launched in 2014, aimed at obtaining self-sufficiency in tuber production and storage capacity within three years. However, with prices rising, only 95,000 tons of additional capacity has in fact been created over the intervening three years.

The project began as it had been noted that up to 40% of its potato production was damaged due to poor handling and storage. In response, the government recommended setting up 112 new cold storages with a combined capacity of 700,000 tons by March 31, 2018. However, the mission only succeeded in raising storage capacity to 212,000 tons, with most coming from the private sector.

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Dutch watchdog fines cold storage firms

The Dutch competition watchdog has fined 4 cold storage firms for allegedly distorting competition in various ways between 2006 and 2009.

The Dutch competition watchdog has fined four cold storage firms a total of nearly €12.5 million.

In a press release, the Netherlands Authority for Consumers and Markets (ACM) said the companies –  Eimskip, Kloosbeheer, Samskip and Van Bon (now H&S Coldstores) – distorted competition in various ways between 2006 and 2009.

During that period, “the companies involved were holding merger talks, but, in those talks, they made arrangements about prices, exchanged competition-sensitive information, and shared customers among each other. As a result thereof, competition in the cold-storage market has been seriously impeded.”

ACM said anticompetitive arrangements were discovered in various emails and competition-sensitive information was frequently exchanged. For example:

  • the managers informed each other about the price for food storage;
  • they told each other the current utilisation rates of their storage facilities, and thus whether or not they were looking for jobs;
  • sometimes they made arrangements about who would get which customer or about what price increase would be passed on;
  • arrangements were made about bids to potential clients, thus it was clear in advance who would get the job.

“Companies in the cold-storage market are a key link in the food transport chain. Many different products are stored, ranging from fruit juices and vegetables to fish and meat. Cold-storage facilities can primarily be found in logistical hubs such as ports.

“In and around the ports, many businesses work closely together in order to be able to work fast and efficiently. However, this may also lead to a situation where it becomes easy to make anticompetitive arrangements. Even to this very day, ACM still receives indications that some businesses do not compete fairly in other segments of the port and transport industry,” ACM said.

“For 2016 and 2017, ACM has this industry on its radar, among other industries. ACM will not just be keeping a close watch on businesses that violate the rules, but will also inform businesses of risky business practices,” it added.

Appeals underway

In a press release, Samskip said it had already appealed the ACM decision to impose a fine on it. During the time Samskip was shareholder of Kloosterboer IJmuiden, Samskip was not in any way involved in, and nor did it have any knowledge of, anticompetitive behaviour by Kloosterboer IJmuiden, it said.

And according to FoodProductiondaily.com, Eimskip is also to appeal.

Satellite image of Europoort, Netherlands via Public Domain: https://commons.wikimedia.org/w/index.php?curid=129495
Image used only as illustrative example of a Dutch port.

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Rotterdam Cool Port gets underway

Kloosterboer and the Port of Rotterdam Authority are investing in the start of a new cold storage cluster on the City Terminal site in the Waalhaven/Eemhaven: Rotterdam Cool Port. Kloosterboer is setting up a new cold store, specialised in the storage and handling of refrigerated and frozen cargo in reefer containers. Complementary services, such as empty depots and food inspection, will be added in the future.

Kloosterboer and the Port of Rotterdam Authority are investing in the start of a new cold storage cluster on the City Terminal site in the Waalhaven/Eemhaven: Rotterdam Cool Port.

Kloosterboer is setting up a new cold store, specialised in the storage and handling of refrigerated and frozen cargo in reefer containers. Complentary services, such as empty depots and food inspection, will be added  in the future.

“We are extremely proud about the start of Rotterdam Cool Port. We, as a port, have much experience in the cold storage sector and Rotterdam Cool Port is a valuable expansion of operations in this field,” said Ronald Paul, COO at the Port of Rotterdam Authority.

“As this location has many multimodal connections with the container cluster on the Maasvlakte as well as all surrounding Greenports and the final destinations in Europe, Cool Port will make a real contribution to the sustainability and efficiency of the supply chain for fresh produce,” he said.

Operational in 2017

Construction is due to start early next year on the cold store and the layout of the Kloosterboer site. The company is purchasing 5 ha with the option to expand in the future. The terminal is expected to become operational in the course of 2017, with a capacity of 40,000 temperature-controlled pallet spaces to handle at least 400,000 pallets a year.

There is an additional 14,500 m2 approx. to accommodate various services such as packing, sorting and cross-docking. “We are very pleased to have the opportunity to set up business at Cool Port. Here, we want to offer our clients the highest possible level of service in the perishable goods sector, via a state-of-the-art terminal,” said Kloosterboer CEO Hans Kroes.

Unique combination

The combination of location and cold storage facility makes Rotterdam Cool Port attractive, the port said in a press release. “Thanks to the location, shippers will no longer need to transport cargo from the terminal to the cold store, so that import and export costs can be substantially reduced. As Rotterdam Cool Port is being developed directly adjacent to container terminals, it will be possible to make optimum use of reefer container equipment. In addition, Rotterdam occupies a prominent position in the cold storage sector because the port serves as the first port of call in Europe for many shipping companies. Speed is crucial for perishable goods. Consequently, a whole range of specialised firms and temperature-controlled storage facilities have established themselves in Rotterdam and the surrounding area through the years,” it said.

Redevelopment

The Province and the Municipality have both granted a subsidy for the redevelopment of a large part of the Eemhaven, with the cool port considered a good use of the newly vacant land. The Province is also contributing towards the access-related infrastructure, in the interests of the Greenports. In addition, it will have a positive impact on employment in the area. It is expected that about 100 people will be working there by 2017.