According to a latest report by the Centre for Monitoring Indian Economy (CMIE), lower demand from major importing countries like Bangladesh and Saudi Arabia, besides stiff competition from other countries, particularly Pakistan, exports is anticipated to have yet another setback this year. In 1997-98 and 1998-99 exports had declined by 3.4 per cent and 12.7 per cent, respectively compared to the export performance of $6,868 million in 1996-97.

Consumption of agricultural and allied commodities, especially basmati rice, non-basmati rice, coffee, guargum meal, oil meal and tea which had contributed over 50 per cent to the total exports of the group in 1998-99 showed a major decline during April-October 1999. Exports of thesecommodities during the seven months period ended October 31, 1999 had fallen by a whopping 39 per cent to $1,037 million, as against $1,702.7 million in the corresponding period of 1998.

Stiff competition from neighbouring countries resulting in lower unit value realisation for these products has relatively affected the performance of exports of the sector, says a CMIE report.

Because of rich harvest of rice in Bangladesh, imports from that country had fallen by over 80 per cent. This drastically had affected the overall exports of basmati rice from India to Bangladesh by about 70 per cent, during the first seven months of the fiscal 1999-2000.

Besides this, owing to the fact that basmati rice from Pakistan was comparatively cheaper, exports to Saudi Arabia, the second largest consumer, had also declined. Two-thirds of basmati rice from the country normally is exported to Saudi Arabia and during the year 1998-99, the report says, exports were at 28 per cent.

In the case of coffee which had majormarkets in Italy, Russia, Germany, Spain and Belgium, exports during April-October were at $188.7 million, 33 per cent less compared to $283.2 million in the previous year. Same is the case with tea were exports declined by nearly 20 per cent from $325.1 million.

With the same trend persisting and with not much of change expected in the first three months of the millennium, it is feared that the sector would experience a downswing once again.