Led by a resurgence in marine exports and a sustained rise in non-basmati rice supplies, India’s outbound shipments of farm products will likely hit a record $45 billion in FY22, defying supply-chain woes, a senior government official told FE.
The emergence of the new Covid strain — Omicron — is unlikely to dent farm exports, which have remained largely insulated from the Covid onslaught so far, he added.
Between April and October, farm exports rose 24% from a year before to $27 billion even on a decent base. Despatches of farm products grew almost 18% last fiscal to $41.9 billion, far outperforming a 7% drop in overall merchandise exports in the wake of the pandemic. Sustained growth in farm exports, which have often performed below par, remains critical to the country realising its ambitious merchandise export target of $400 billion for FY22.
“Although supply-chain issues can potentially weigh down physical shipments a bit, demand is very much there. Even with the emergence of the Omicron variety, we don’t expect farm exports to get impacted much,” said the official. “Wider geographical spread, concerted push by the government and bumper farm production have ensured that we will have another year of strong exports,” he added.
Moreover, to soften the blow of a spurt in shipping costs over the past one year, the government has reintroduced the Transport and Marketing Assistance (TMA) scheme, with wider coverage and much larger support, for one year through March 2022. Under this, the government reimburses farm exporters a certain portion of freight charges and offers assistance for marketing of select products. Rates of assistance under the revamped scheme, too, have been raised by 50% for exports by sea and 100% for those by air.
Supported by elevated global commodity prices, farm exports hit a record $43.2 billion in FY14, before witnessing a drop for two straight years. The exports started rising again from FY17 but lost tempo in FY20.
In the current fiscal, marine products, grains and cotton turned out to be the major drivers of farm exports. Between April and October, marine exports reversed last year’s slide and shot up by 37% to $4.6 billion, while non-basmati supplies grew by 47% to $3.5 billion. Similarly, exports of sugar rose by 34% to $2 billion, cotton by 106% to $1.2 billion, wheat by 439% to $872 million and castor oil by 40% to $722 billion.