Diminished Presence
India's role as key global grains supplier has shrunk in 3 years, says USDA
This story was originally published at 18:24 IST on 16 August 2024
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NEW DELHI – India's role as a key supplier to the global grains market has diminished over the past three years as strong domestic demand and government policies keep domestic supplies within the country, the US Department of Agriculture said.
"From (trade year) 2020-21 to 2023-24, corn exports are estimated to decline 86%, rice exports 20%, and wheat exports 90%. India is exporting half the volume of grains compared to record shipments in 2021-22," the USDA said in its "Grain: World Market and Trade" report.
The US agency said India is set to lose its tag of being a net exporter of corn for the first time since 2000. "A surge in demand for feed, primarily from India's poultry sector, along with domestic policy incentivizing corn for ethanol production have largely kept supplies in-country and spurred India to begin importing for the first time since 2019-20," according to the report. A 15% on-year decline in global corn prices has made Indian corn exports less competitive and further supported imports, USDA said.
India recently revised its 2018 National Policy on Biofuels to include corn as a feedstock, offering price incentives for corn-based ethanol. The country also has a target of meeting 20% blending of ethanol with petrol by ethanol supply year 2024-25 (Nov-Oct). In July, oil companies bought 604 mln ltr of the biofuel and achieved 15.8% blending with petrol, a tad down from 15.9% the previous month.
As far as rice is concerned, India's policies to ban exports of certain types of rice and apply taxes to other rice shipments have disrupted the global market, USDA said. "When India implemented the ban, rice prices spiked before eventually easing as competitors increased exports. Despite large stocks, the ban on regular white rice exports remains in place, prompting importers to shift to other suppliers such as Vietnam and Thailand," it said.
India has had negligible wheat exports since May 2022 when it banned shipments of the staple grain. "The ban was implemented to quell high prices, prioritise domestic consumption after a surge in exports and a smaller crop, and stabilise stocks," the US department said. "Countries like Benin, Mozambique, and Madagascar, where India was the sole supplier, have turned to buying from Pakistan and Thailand." End
Reported by Sayantan Sarkar
Edited by Tanima Banerjee
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