After displaying some revival within the final couple of years, India’s agricultural exports are faltering once more. Total farm exports throughout April-September, at $ 17.29 billion, stood 9.1% decrease than the $ 19.02 billion for the identical interval of 2018-19.
The worst hit has been uncooked cotton, with shipments within the first half of 2019-20 practically 76% down over the degrees of April-September 2018-19. Moreover, the worth of exports, at $ 226.6 million, is beneath the imports of $ 990.6 million, that are up 136%. This is the primary time since 2004-05 that the nation has turned web importer of the pure fibre.
Cotton exports from India had peaked at $ 4.33 billion in 2011-12 and fell to $ 1.62 billion by 2016-17, earlier than recovering a tad to $ 2.1 billion in 2018-19 and now crashing once more. The bleak prospects for commerce – world benchmark Cotlook ‘A’ Index costs are ruling at about 75.5 cents per pound, as in opposition to 86.5 cents presently final yr and the all-time-high of 244 cents reached in March 2011 — comes even farmers have began bringing their harvested kapas (uncooked un-ginned cotton) to the markets. Kapas in Rajasthan’s Sriganganagar mandi traded at a median of Rs 5,100 per quintal on Wednesday, beneath the federal government’s minimal assist worth of Rs 5,450 for medium-long staple size varieties.
The different main product to publish a pointy decline is rice. In 2017-18, India shipped out a file 128.75 lakh tonnes (lt) of rice. That included 88.18 lt of non-basmati (value $ 3.64 billion) and 40.57 lt of basmati ($ 4.17 billion, beneath the 2013-14 excessive of $ 4.86 billion). However, the present fiscal has seen a dip in each basmati and non-basmati earnings, with the slide extra pronounced for the latter (see desk 1).
India’s basmati rice goes principally to West Asia (Iran, Saudi Arabia, United Arab Emirates, Iraq, Kuwait and Yemen), United Kingdom and the US. The locations for non-basmati are the comparatively poorer African nations (Nigeria, Benin, Togo, Ivory Coast, Liberia, Guinea, Senegal, Somalia and Djibouti), Bangladesh, Nepal and Sri Lanka. In basmati, the current slowdown has primarily to do with fee issues arising from the US commerce sanctions on Iran, which accounted for $ 1.56 billion out of India’s $ 4.71 billion exports throughout 2018-19. In non-basmati, too, China is flooding the African markets by way of launch of its huge extra public shares — in addition to elevated worth competitors from Pakistan and Vietnam (in white rice) and Thailand (for parboiled) — is posing challenges. The non-renewal of a 5% MEIS (Merchandise Exports from India Scheme) profit after March 25 hasn’t helped both.
India, in 2011-12, emerged because the world’s largest rice exporter and in addition got here near being the No. 1 in cotton (after the US). In 2014, the nation even turned the most important bovine meat exporter. But now, it has dropped to No. Three in cotton (behind US and Brazil) and bovine meat (behind Brazil and Australia). Buffalo meat exports, which surged from a mere $ 341.43 million to $ 4.78 billion between 2003-04 and 2014-15, have since slipped to $ 3.59 billion in 2018-19 and continued their slide this fiscal. Even marine merchandise, which had a superb journey and touched $ 7.40 billion in 2017-18, have misplaced momentum.
A comparable story holds for guar-gum (a thickening agent utilized in shale oil/gasoline extraction) and oilmeals, whose exports at this time are a pale shadow of their 2012-13 peaks of $ 3.92 billion and $ 3.04 billion, respectively. The results of it are additionally mirrored in realisations for growers. On March 21, 2012, on the peak of the shale growth, spot costs of guar-seed in Jodhpur scaled Rs 30,432 per quintal, in comparison with the present Rs 4,050 or so! Soyabean charges in Indore, at Rs 3,500 per quintal, are additionally nowhere near their May 2014 common of 4,584.
The only two agri-commodities to have registered important progress in 2018-19 in addition to the present fiscal are sugar and spices. Sugar exports in 2019-20 are on track to match their earlier 2011-12 file of $ 1.84 billion — thanks largely to a subsidy (“lump sum assistance for expenses”) of as much as Rs 10,448 per tonne (it was roughly Rs 11,500 within the 2018-19 season).
Spices are an fascinating case. The interval after 2013-14 has witnessed a rise in each their exports and imports. The prime export gadgets inside spices in 2018-19 had been chilli (Rs 4,058.72 crore), mint merchandise (Rs 3,471.09 crore) and cumin (Rs 2,924.73 crore). On the opposite hand, exports of pepper and cardamom (together with their oils and oleoresins) had been only Rs 1,017.70 crore and Rs 482.31 crore, whilst imports of those conventional plantation spices amounted to Rs 875.36 crore and Rs 291.92 crore, respectively. Import of cheaper pepper from Vietnam, Sri Lanka and Indonesia has additionally led to costs within the Kochi market plunging beneath Rs 300 per kg for the primary time. They are additionally a lot decrease than the landed minimal import worth of Rs 500/kg for black pepper fastened by the Narendra Modi authorities in December 2017. In cardamom, too, Guatemala has displaced India because the world’s preeminent exporter.
During 2003-04 to 2013-14, a interval coinciding with the earlier United Progressive Alliance regime’s tenure, India’s agricultural exports had soared from $ 7.53 billion to $ 43.25 billion, mainly on the again of a worldwide commodity worth growth. The collapse of that growth, nearly when the Modi authorities had taken over, resulted within the nation’s farm exports nose-diving to $ 39.08 billion in 2014-15, $ 32.81 billion in 2015-16 and $ 33.70 billion in 2016-17, whilst imports rose from $ 15.53 billion in 2013-14 to $ 21.15 billion, $ 22.58 billion and $ 25.64 billion within the following three fiscals. In the method, an agricultural commerce surplus of $ 27.72 billion in 2013-14 was lowered to $ 8.05 billion by 2016-17.
Subsequently, exports did get well to $ 32.90 billion in 2018-19, alongside a fall in imports to $ 20.92 billion, led primarily by pulses and edible oils, whereas additionally helped by an element reversal of the Modi authorities’s earlier exhausting anti-inflationary and strong-rupee coverage stance. That restoration has suffered a renewed setback, although, amidst sturdy world commerce headwinds.