Indian agricultural exports recover from Covid-induced fall

Date:10-21-2020

India’s agricultural exports, a crucial source of farm earnings, have recovered from a pandemic-induced decline, but some high-value segments, such as livestock and marine products, continue to shrink, according to an analysis of government data.

Exports of major farm products stood at ₹53,000 crore in the five-month period between April and August 2020-21, a rise of 14.8% compared to the corresponding period of 2019-2020, the export data show.

However, between April and June, or the first quarter, widespread trade disruption globally because of the pandemic and a lockdown caused exports of major farm products to fall 2.8% in value terms from the year-ago period. Exports turned positive following a pick-up from July onwards.

Overall, the farm-export earnings data is a mixed bag. During the April to August period, farmers gained from higher exports of rice, wheat, sugar, but their incomes have taken a hit from a 17% fall to ₹8,919 crore in livestock exports as well as a 15% fall to ₹8,616 crore of marine products.

Exports of basmati rice, a big-ticket export item among cereals, during April-August rose 8.2% to ₹13,660 from the year-ago period, while the value of non-basmati rice exports grew 91.3% to ₹11,570 crore, the data show.

To be sure, the latest data available is for six scheduled farm product categories and excludes many smaller items as well as some commercial crops such as cotton. The scheduled categories for which data are available with the Agricultural and Processed Food Products Export Development Authority are (a) floriculture and seeds (b) fresh fruits and vegetables (c) processed fruits and vegetables (d) livestock products (e) cereals and (f) others (includes items such as alcoholic beverages).

When looked at in dollar terms, which helps in neutralising the effects of currency depreciations, the fall in livestock products is steeper at 21.9%.

Buffalo meat exports fell 16% to ₹7,609 crore, while goat and sheep meat shipments plunged 62.9% to ₹122 crore. Farmers benefited from a 43% rise in pulse exports to ₹1,039 crore.

An agriculture ministry statement on October 10 said exports rose 43.4% in the April-September period. The agriculture ministry statement showed higher growth because it took a narrower basket which did not have categories such as livestock and marine products.

“We hope that worst is over. The FAO Food Price Index in September 2020 was up 2.1% from August and now 5% higher than its value a year ago,” said Abishek Agrawal of Comtrade, a commodities trading firm.

Yet, India’s agricultural exports are nowhere near their peak, witnessed prior to 2014-15, and this fall has been a major reason for poor returns in the farm sector.

India’s agricultural exports grew five times from about $8.7 billion in 2004-05 to $42.6 billion during 2013-14 on the back of a rise in global commodity prices. This fell sharply to $33 billion in 2016-17. The country’s net exports (i.e. exports minus imports or the agricultural trade surplus) fell to $7.8 billion in 2016-17. Exports have been muted since.