Farm goods’ exports to hit fresh record in FY23

NEW DELHI: India’s farm trade, which recovered smartly in FY22, will likely hit a record this fiscal, with both exportsandimportsscalingnewpeaks.

Agricultural exports are expected to hit a fresh peak of $50 billion and imports, too, may touch $34-35 billion, official and trade sources told. Farm trade thus remains more unsusceptible toaglobaleconomicslowdown.

Thesedatadon’tincludeexportsand imports of cotton, often considered part ofthetextilesandgarmentstrade.

Without the ban on the outbound shipment of wheat, broken rice and wheat flour, and curbs on sugar, farm exports would shoot up to about $54-55 billion in FY23 and widen the net trade surplus in this segment, some of the sources said. The export restrictions were imposed by the government earlier this fiscal to tackle elevated inflationarypressure.

According to the latest official data, farm exports grew 12.6% on year until December this fiscal to $38.5 billion, higher than the 10.2% growth in the overall merchandise exports. Such imports rose 11.1% to $26 billion, lower than a 24.9% jump in total goods imports. Vegetable oils, comprising mainly edible oil,accountedfor62%oftheseimports. However, such exports may come under pressure in the coming months once the full impact of the restrictions, imposed in different months, start to hurt after a time lag, analysts said. Wheat exports, for instance, were allowed in limited volumes this fiscal against the letters of credit already issued before the ban; these despatches are now completed. Moreover, the government had banned exports of wheat products on August 27 and broken rice on September 8, the fallout of which will be captured in the trade data in the coming months. Easing commodity prices may also impact

exportrealisation.

Farm exports until December this fiscal were driven by a 40.3% jump in despatches of basmati rice to $3.3 billion; non-basmati rice supplies inchedup3.4%to$4.7billion(thesewere up 13% until August). Exports of plantation crops, especially tea and coffee, rose 14.6% to $1.5 billion, and those of unmanufactured tobacco climbed55%to$677million.

Wheat exports in the first nine months of the fiscal inched up 3.9% to $1.5 billion (mainly due to massive despatches before the ban was slapped).

Farm exports had hit a record $47.4 billion in FY22 (including cotton they hit $50.2 billion), defying supply-chain woes in the wake of the pandemic. These were buoyed by a resurgence in despatches of marine products and a sustained rise in non-basmati rice supplieslastfiscal.