50% fall in Guargum exports results in 2.7% decline in farm goods shipments

Written by Sandip Das | New Delhi | Updated: Aug 15 2014, 08:26am hrs
Exports of agricultural and processed foods have declined marginally in the first quarter of the current fiscal compared with the same period last fiscal on account of a sharp fall in the guargum shipment to the US.

According to latest data by Agricultural and Processed Food Exports Development Authority (APEDA), an export promotion body under the commerce ministry, agricultural goods worth of Rs 33,649 crore were shipped in Q1 against Rs 34,581 crore in the same period last fiscal, a fall of 2.7% y-o-y.

A commerce ministry official told FE that the export of guargum, mostly used by the US-based oil exploration company, fell more than 50% in first quarter of the current fiscal to Rs 2,316 crore from Rs 4,634 crore in the year-ago period.

However, there was an increase in exports of agricultural goods such as Basmati rice, groundnuts, processed vegetable and fruits besides buffalo meat in April-June 2014 period.

Mostly driven by a rise in demand from Iran and Saudi Arabia, and West Asian countries, India's aromatic long-grain Basmati rice shipment grew more than 8% to Rs 8,400 crore in the first quarter in the current fiscal from Rs 7,757 crore in same period last year. Non-Basmati rice exports grew marginally to Rs 3,353 crore compared with last fiscal.

Last fiscal, India exported Basmati worth of Rs 28,000 crore while total rice exported was more than Rs 40,000 crore.

After the restrictions on exports of non-Basmati rice was lifted in 2011, the demand for Indian rice has gone up globally, especially in Africa, European Union and West Asia. India has retained its biggest rice exporter tag with shipments of 10 million tonne in the last two fiscal.

A commerce ministry official said the demand for Indian buffalo meat in international market has seen a sudden rise and the buffalo meat dominated the animal products' exports with a contribution of over 86%.

In April-June 2014, India exported buffalo meat worth of more than Rs 5,742 crore against Rs 4,634 crore in the previous fiscal which is an increase of more than 17%.

Key destinations for Indian buffalo meat and other animal products are Vietnam, Malaysia, Thailand, Saudi Arabia, Egypt and the UAE.

Other key agricultural products that saw a rise in shipment in the current fiscal include groundnuts (34%), cocoa products (144%), processed vegetables (38%), poultry products (35%)

Some of the key commodities which witnessed a decline in shipment include wheat (24%), pulses (16%) and dairy products (19%). Due to stringent quality and packaging measures put in place by the government, India's agricultural good exports have risen from Rs 36,294 crore in 2008-9 to Rs 1,36,920 crore in the last fiscal.

Indian agriculture seems to have a greater comparative trade advantage than manufactured goods. This has been possible as the sector has responded by undergoing a structural transformation, a paper by the Commission for Agricultural Costs and Prices (CACP) former chairman Ashok Gulati had stated recently.