Farm exports surge to all-time-high, and so do imports

• India’s agricultural exports crossed $50 billion during the FY 2022, While imports also scaling an all-time-high of $32.4 billion.

Previous Statistics

• The previous record for exports was $43.3 billion in 2013-14. That year also saw imports of only $15.5 billion, resulting in an agricultural trade surplus of $27.7 billion.

Impact on Global Food Prices

India’s agricultural trade performance is closely linked to international commodity prices.

• Food Price Index with a base value of 100 for the 2014-16 period, averaged 122.5 points in 2012-13 and 119.1 in 2013-14.
• The last two years have witnessed a renewed boom in global agri-commodity prices.
• The return of demand with index averaging 102.5 points in 2020-21 and 133 in 2021-22, helped Indian agri exports rebound and go past $50 billion.
• High international prices like during late-2010 to 2014, more recently from October 2020 are favourable for exports of farm produce.
• Almost one-to-one relationship between the FAO index and India’s agricultural exports.

India’s Agriculture Export Composition

• Marine products: from $5 billion in 2013-14 to $7.8 billion in 2021-22.
• The real increase has come from rice (specifically non-basmati), sugar and wheat, with their exports breaking all earlier records.
• Basmati rice - from $4.9 billion in 2013-14 to $3.5 billion in 2021-22.
• Buffalo meat - $4.8 billion in 2014-15 to $3.3 billion.
• Oil meals - $3 billion in 2012-13 to $1 billion.
• Guargum - $3.9 billion in 2012-13 to $447 million.
• Raw cotton - $4.3 billion in 2011-12 to $2.8 billion.

Imports Composition

The spike in 2021-22 has been largely courtesy of vegetable oils.

• Vegetable oil imports: worth $7.2 billion in 2013-14 to $19 billion in 2021-22.
• Pulses imports: $2.2 billion in 2021-22.
• Other big import items: fresh fruits (mainly almonds and apples), cashew (basically raw nuts for re-export after processing), spices and natural rubber.
• Spices: India happens to be both a large importer ($1.3 billion in 2021-22) and exporter ($3.9 billion).

Conclusion

FY 2022-23 could be more challenging for Indian agricultural trade, notwithstanding high international prices that are normally favourable for exports while keeping imports in check.

If the Reserve Bank of India’s latest actions and hawkish commentary on food inflation are any indication, the policy push for exports may also not be as intense.

Exam Track

Prelims Takeaway

• India’s agricultural exports
• Imports and Exports Composition
• Inflation and Increased food prices