{"id":182869,"date":"2022-05-05T20:56:28","date_gmt":"2022-05-05T15:26:28","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=182869"},"modified":"2022-05-05T20:56:28","modified_gmt":"2022-05-05T15:26:28","slug":"agri-trade-beyond-the-ukraine-war","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/agri-trade-beyond-the-ukraine-war\/","title":{"rendered":"Agri trade beyond the Ukraine war"},"content":{"rendered":"\n<p><strong>Context<\/strong>: <span class=\"p-content paywall\">The conflict in Ukraine has created an opportunity for India\u2019s agricultural exports, particularly wheat.<\/span><\/p>\n<p>But, India&#8217;s chances of becoming a stable supplier of wheat are limited in the absence of a long-term policy on foodgrain exports.<\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><span class=\"p-content paywall\">Out of the around 200 million tonnes (mt) of global wheat exports, <strong>Russia and Ukraine<\/strong> export 60 mt. India exported nearly 7 mt in 2021. <\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h5><span class=\"p-content paywall\">Is India facing a pressure on its wheat stocks this year?<br \/>\n<\/span><\/h5>\n<p><span class=\"p-content paywall\"> Yes. Presently, India&#8217;s wheat stocks are facing pressure due to the following reasons: <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>A possible decline in production and procurement:<\/strong>\u00a0<\/span><\/p>\n<ul>\n<li>P<span class=\"p-content paywall\">roduction could be lower by more than 10 mt due to the heat wave in the second half of March.<\/span><\/li>\n<li><span class=\"p-content paywall\"> Due to a decline in production and private sector purchases, the government procurement of wheat this rabi season is expected to be around 20 mt or less (it was 43 mt last year). Govt needs<br \/>\n<\/span><\/li>\n<\/ul>\n<p><span class=\"p-content paywall\">An increase in public distribution and the rise in exports<\/span><\/p>\n<h5><span class=\"p-content paywall\"> Can India become a stable supplier of foodgrains beyond the Russia-Ukraine conflict?<\/span><\/h5>\n<p><span class=\"p-content paywall\">An analysis by experts shows the following &#8211;<br \/>\n<\/span><\/p>\n<p><span class=\"p-content paywall\">The<strong> prospects for sustained wheat exports by India are limited<\/strong><\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>&#8211;<\/strong> India can substitute only a small part of the 60 mt of wheat exports by Russia and Ukraine. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Exporting for a year and then banning exports is bad for trade relationships.<\/strong> <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Non-price factors<\/strong> like food safety, quality and the variety of wheat may also constrain exports. <\/span><\/p>\n<p><span class=\"p-content paywall\">Similarly, <strong>wheat may not be competitive globally<\/strong> in most years for exports. Although India is competitive in the cost of production, it may not be so if we consider the minimum support price, which is 50 per cent over cost and other <em>mandi <\/em>charges.<\/span><\/p>\n<h5>What is the overall situation wrt agricultural exports by India?<\/h5>\n<p><span class=\"p-content paywall\">India has exported more than 17 mt of <strong>rice<\/strong> both in FY21 and FY22. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Wheat export<\/strong>s were 2.1 mt in FY21 and 7 mt in FY22. <\/span><\/p>\n<p><span class=\"p-content paywall\">The country has done well in total agricultural exports in the last few years. As per data, <strong>agricultural exports have grown by 20%<\/strong> during FY22 to touch $50 billion. This higher growth was achieved in spite of logistical challenges posed by the pandemic.<\/span><\/p>\n<h5><strong>Way forward<\/strong><\/h5>\n<p><span class=\"p-content paywall\"> It is possible to be a stable supplier of rice and wheat to other countries if there is a <strong>long-term policy on exports of foodgrains<\/strong>. Of course, the environmental costs of these crops must be considered, particularly in the production of rice.<\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Imports of edible oils<\/strong> <strong>and the rise in prices.<\/strong> India is the biggest importer of edible oils. Palm oil constitutes 60% of the imports (9 mt) followed by soyabean and sunflower.<\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>&#8211;<\/strong> The prices of sunflower oil increased due to the conflict in Ukraine, while soyabean oil prices rose because of dry weather in South America. <\/span><\/p>\n<p><span class=\"p-content paywall\">India will face higher food inflation in the near future. This is an opportunity for farmers to increase their incomes. But vulnerable consumers have to be protected with<strong> safety nets like in-kind and cash transfers.<\/strong><\/span><\/p>\n<p><span class=\"p-content paywall\">What are the policies needed to improve edible oil production, reduce imports and prices? <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Short term<\/strong><\/span><\/p>\n<p><span class=\"p-content paywall\">&#8211; India is planning to engage with Indonesia on palm oil imports as there are limited alternatives. It is also trying to reduce cess charged on edible oil imports to soften prices. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>&#8211;<\/strong> The government is promoting the production and productivity of oilseeds through the <strong>national Food Security Mission: Oilseeds (NFSM-Oilseeds)<\/strong> from 2018-19 onwards in all districts of India. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>&#8211;<\/strong> In August 2021, the prime minister announced the <strong>National Mission on Edible oils-Palm oil<\/strong> to make India self-sufficient in cooking oils. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Alternative sources have to be found<\/strong> to reduce dependence on palm oil imports.<\/span><\/p>\n<p><span class=\"p-content paywall\">In the medium to long term, there is a need to have <strong><em>atmanirbharta <\/em>in edible oils,<\/strong> as the demand for them will rise with urbanisation and increase in incomes. <\/span><\/p>\n<p><span class=\"p-content paywall\"><strong>Investment in R&amp;D<\/strong> in oilseeds has to be increased for these crops. <\/span><\/p>\n<p><span class=\"p-content paywall\">Similarly, marketing infrastructure, development of value chains, price incentives, etc have to be given to farmers to <strong>shift cropping patterns from rice and wheat to oilseeds<\/strong> in several states, including Punjab and Haryana. <\/span><\/p>\n<p><span class=\"p-content paywall\">Hence, there is a need for a two-pronged strategy of increasing domestic production and engaging with other countries to have reliable imports.<\/span><\/p>\n<p><strong>Source<\/strong>: This post is based on the article \u201c<strong>Agri trade beyond the Ukraine war<\/strong>\u201d published in <strong>Business Standard<\/strong> on <strong>4th May 22<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: The conflict in Ukraine has created an opportunity for India\u2019s agricultural exports, particularly wheat. But, India&#8217;s chances of becoming a stable supplier of wheat are limited in the absence of a long-term policy on foodgrain exports. Out of the around 200 million tonnes (mt) of global wheat exports, Russia and Ukraine export 60 mt.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/agri-trade-beyond-the-ukraine-war\/\">Continue reading <span class=\"screen-reader-text\">Agri trade beyond the Ukraine war<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-182869","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704794701},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=182869"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182869\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=182869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=182869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=182869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}