Posted on August, 19, 2024 at 08:38 am
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 USDA said in its August 12 Grain: World Markets and Trade publication.
From trade year 2020-21 to 2023-24, corn exports are estimated to decline 86 percent, rice exports 20pc, and wheat exports 90pc.
India is exporting half the volume of grains compared to record shipments in 2021-22.
Government ethanol policy and growing poultry demand for corn, export restrictions for certain types of rice, and an export ban for wheat have all contributed to the change in India’s grain-trade environment, and will continue to impact the outlook for 2024-25.
India has had negligible wheat exports since it implemented an export ban on wheat grain in May 2022.
The ban was implemented to quell high prices, prioritise domestic consumption after a surge in exports and a smaller crop, and stabilise stocks.
With strong consumption, wheat ending stocks in 2023-24 dwindled to the lowest level in over 15 years.
With little growth in supplies, flour millers have requested a waiver of the 40-percent wheat import tariff to enable imports.
The largest shift in India grains trade is for corn.
In 2023-24, India is on pace to lose its position as a net exporter for the first time this century.
A surge in demand for feed, primarily from India’s poultry sector, along with domestic policy incentivising corn for ethanol production, have largely kept supplies in-country, and spurred India to begin importing for the first time since 2019-20.
Additionally, a 15pc year-on-year decline in global corn prices has made Indian exports less competitive and further supported favorably priced corn imports.
The Coarse Grains Market Feature highlights the outlook for India corn trade and its impact on South and Southeast Asia trading partners.
India has been the largest exporter of rice over the past decade.
The government’s decision to ban exports of some types of rice, albeit with a considerable number of exemptions, and apply export taxes to others has disrupted the global market.
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.
Source: Grain Central