Subdued global offtake hits Apr-Dec 2018 agri exports

Export of agricultural commodities fell 46% in volume terms during the period

Exports of agricultural commodities nosedived by upto a staggering 46 per cent in volume terms due to supply glut in the international market.

This prompted stockists to defer their purchase plans amid expectations of further price fall.

Data compiled by the Agricultural & Processed Food Products Export Development Authority (Apeda) showed that the country’s wheat exports slumped to 135,284 tonnes ($35 million) for the period between April and December 2018 compared to 249,702 tonnes ($72 million) in the corresponding period last year.

Similarly, non-basmati rice exports from India fell by 14 per cent in volume terms and 16.4 per cent in value terms due to the global supply glut. Basmati rice, buffalo meat, groundnut and fresh fruits also posted decline in their exports 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. This may lift India’s overall agri commodities’ exports in the coming quarters.

“India’s agri commodities’ exports declined for the ninemonth period ending December 31, 2018, due to weak global prices. With the global commodities, prices have already started recovering and agri exports from India are all set to move up in the future,” said Anup Wadhawan, secretary, department of commerce, on the sidelines of an event here on Friday.

Barring of a couple of commodities, realisations from almost all agri commodities have declined due to a sharp fall in global prices. Average realisation for wheat fell from $288 a tonne for April-December 2017 to $257 a tonne for the same period this year. Average realisation from groundnut also fell from $1,057 a tonne to $966 a tonne.

Meanwhile, the Food and Agricultural Organisation (FAO) last week forecast world cereal production at 2611.4 million tonnes for 2018-19 compared to 2658.8 million tonnes in the previous year. With massive carryover stock spilled over from the previous year, total availability of cereal in the world is estimated to remain higher than the utilisation estimated at 2657.5 million tonnes.

The sharp decline in realisation from agri commodities indicates a proportionate fall in their prices in the global markets. Similarly, prices of agri commodities have fallen proportionately in India also.

By contrast, prices of globally traded commodities have started recovering in the international markets. FAO, in its latest report, said global the Food Price Index went up by 1.8 per cent to average at 164.8 points in January 2019, but is still 2.2 per cent below the corresponding month last year.

After three successive months of relatively stability, the increase in January was largely driven by a sharp rebound in dairy prices as well firmer prices of vegetable oils and sugar.

“India’s potential on 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, global price rise would not help much,” said Madan Sabnavis, Chief Economist, Care Ratings.