India's exports of agricultural commodities nosedived by up to a staggering 46 per cent in volume terms due to supply glut in the international market which prompted stockists to defer their purchase plans amid e
xpectations of further price fall.
Data compiled by the Agricultural & Processed Food Products Export Development Authority (Apeda) showed India’s wheat exports slumped to 135,284 tonnes ($35 million) for the period between April and December 2018 from 249,702 tonnes ($72 million) for the corresponding period last year.
Non-basmati rice exports fell by 14 per cent by volume and 16.4 per cent in value due to a global supply glut. Basmati rice, buffalo meat, groundnut and fresh fruit exports also posted a decline during the first nine months of the current fiscal. Experts, however, believe that global sentiment has started reviving towards the end of December 2018 and early January 2019 which may lift India’s overall agri commodity exports in the coming quarters.
“India’s agri commodity exports declined for the nine-month period ending December due to weak global prices. With global commodities prices having already started recovering, agri exports from India are all set to move up in future,” said Anup Wadhawan, Secretary, Department of Commerce, Government of India on the sidelines of an event in Mumbai on Friday.
Barring a few, realisation from almost all agri commodities declined due to a sharp fall in global prices. Average realisation for wheat fell from $288 a tonne in April–December 2017 to $257 a tonne for the same period this fiscal, while that for groundnut fell from $1,057 a tonne to $966 a tonne.
Meanwhile, the Food and Agricultural Organisation (FAO) of the United Nations last week forecast world cereal production at 2,611.4 million tonnes for 2018-19, compared with 2,658.8 million tonnes in the previous year. With massive carryover stock spilling over from the previous year, total availability of cereal in the world is estimated to remain higher than consumption estimated at 2,657.5 million tonnes.
The sharp decline in farm commodity realisations indicates a proportionate fall in their prices in global markets. Prices of agri commodities have fallen in India proportionately.
By contrast, prices of globally traded commodities have started recovering in the international markets.
FAO in its latest report said that global Food Price Index jumped by 1.8 per cent to average at 164.8 points in January 2019, which is still 2.2 per cent below the corresponding month last year. After three successive months of relatively stable levels, the increase in January was largely driven by a sharp rebound in dairy quotations and firmer vegetable oil and sugar prices.
“India’s potential for future exports, however, would depend upon the opportunity in specific commodities under consideration. In commodities like edible oils and pulses, which India is in deficit, the global price rise would not help much. But commodities of surplus availability will certainly help achieve growth,” said Madan Sabnavis, Chief Economist, Care Ratings.
India has made strong inroads in exports of floriculture, processed fruits and vegetables over the past few years. Dairy is one area to have witnessed phenomenal export growth. Exports of specific value-added commodities like guar gum and sugar would continue to grow irrespective of global economic conditions.