Farm exports defy total development in 2020, see 9.8 per cent development

While India’s total merchandise exports have fallen 15.5% year-on-year throughout April-December, the identical interval has seen its farm exports register a 9.8% development. This is because of agricultural manufacturing being comparatively unaffected by the Covid-19-induced lockdown, and to a steep surge in international commodity costs.
Commerce Ministry information present the nation’s exports of all items throughout April-December 2020 stood at $201.30 billion, down from $238.27 billion in April-December 2019. In distinction, exports of agri-commodities rose from $26.34 billion to $28.91 billion for this era. With imports concurrently contracting 5.5%, the agricultural commerce surplus widened from $9.57 billion in April-December 2019 to $13.07 billion in April-December 2020 (see desk on web page 2).
The enhance in agri exports is basically courtesy beneficial world costs. The United Nations’ Food and Agricultural Organization Thursday launched its Food Price Index (FPI) for January. That quantity, at 113.3 factors (base yr: 2014-2016=100), was the best since 116.4 in July 2014. Between May 2020 and January 2021, the FPI soared from a 48-month-low to a 78-month-high.
International costs have risen because of each the regular normalisation of demand, with most nations unlocking their economies after May, and the restoration of provide chains post-Covid not protecting tempo — making exports of many farm merchandise from India aggressive. That consists of non-Basmati rice, sugar, oilseed meals, cotton and even wheat and different cereals (primarily maize). In truth, the nation was a major exporter of wheat and maize final in 2013-14.
The present export revival is equally a results of dry climate circumstances seen by main producers corresponding to Argentina, Brazil, Ukraine, Thailand and Vietnam. Russia (the world’s largest wheat exporter) and Argentina (No. 1 in soyabean meal and No. 3 in maize) have even introduced momentary suspension of taxes on grain shipments in response to excessive home meals inflation.
Global costs have additionally been buoyed by Chinese stockpiling. The latter had stepped up imports of all the things from maize, wheat, soyabean and barley to sugar and milk powder to construct strategic meals reserves amid geopolitical tensions.
India, however, hasn’t confronted critical climate points; each 2019 and 2020 recorded surplus monsoon rainfall together with well timed onset of winter. Farmers harvested a bumper rabi crop throughout April-June, enabled by the federal government exempting agriculture-related actions from lockdown restrictions. They look set to repeat the efficiency within the coming season as nicely, on the again of absolutely recharged groundwater tables and low temperatures which might be conducive for prime yields of wheat, mustard, chickpea and lentils. That must also assist exports — however the continued farm protests in opposition to the Centre’s latest agricultural reform legal guidelines.

The nation had skilled a sustained farm export increase throughout the earlier UPA regime. Between 2003-04 and 2013-14, these zoomed from a mere $7.53 billion to $43.25 billion, principally driving on a bull run in international commodity costs. With the collapse of that increase, nearly when the Narendra Modi authorities took over, exports had nosedived to $32.81 billion in 2015-16. They had recovered considerably to $39.20 billion by 2018-19, earlier than falling once more to $35.60 billion in 2019-20.
The present revival, if it sustains, will help prop up crop costs when the following rabi harvest is due from March. And which may be politically helpful within the context of the present farm unrest.