18-feb

Growth in exports of Agri product slides

1)      Reasons :

                                i.            Decline in commodity prices

                              ii.            glut in global markets

                            iii.            import ban by several countries

2)      The year-on-year growth in agricultural exports has reduced considerably in 2012- 13 and 2013-14.

3)      Though in absolute terms, agri products exports have increased to Rs.1.96 lakh crore in 2013-14 from Rs.1.74 lakh crore in 2012-13, it is significantly lower than 68.4 per cent growth (y-o-y) registered in 2011-12 (Rs.1.33 lakh crore in 2011-12 against Rs.78,854 crore in 2010-11).

4)      Data until December, 2014, indicate a negative growth in exports of a number of agricultural products, including tea, cereals (except non-basmati rice), spices, fruits and vegetables, tobacco and oil meals

5)      Besides decrease in global demand for certain commodities, exports have been significantly affected by factors, including inferior quality and presence of pests and chemicals. Recent ban by Saudi Arabia and the EU has had a negative impact.

6)      A decline in trade might have a significant impact on production levels as well as on the income of farmers.

7)      The decline in growth is a concern from the point of view of forex earnings. Agri exports account for around 12-14 per cent of our total exports and, hence, they are critical from our balance of payments position.

8)      Exploring more markets is the way out. Russia’s decision to open its markets for Indian agricultural products can be a game changer.