External Affairs Minister S Jaishankar and Russian Deputy Prime Minister, who is also the Minister of Industry and Trade, Denis Manturov, met in Moscow on Tuesday to discuss expanding economic partnership, including smoothening mechanism for trade in national currencies and increasing Indian exports and investments in Russia.

 

On the occasion, New Delhi and Moscow signed a pact for additional units at the Kudankulam Nuclear Power Project besides pacts for and in areas of medicines, pharmaceutical substances and medical devices.

 

Jaishankar met Manturov on day two of his five-day visit to Russia on the eve of his meeting with his Russian counterpart Sergey Lavrov. Considerable focus was given to connectivity initiatives and India's presence in the Russian Far East at the Manturov-Jaishankar meet.

 

The two ministers held wide-ranging discussions on measures to boost business and trade partnership including increasing Indian investments in Russia to meet growing demands across sectors in the backdrop of sanctions, it has been learnt. This was the second meeting between Manturov and Jaishankar this year. The Russian DPM had travelled to India earlier this year.

 

On Tuesday, the two ministers also explored the early conclusion of FTA between India and Eurasian Economic Union (EAEU). Iran recently concluded a full FTA with the EAEU.

 

Taking to X Jaishankar wrote, 'A comprehensive and productive meeting with Deputy Prime Minister Denis Manturov of Russia on our bilateral economic cooperation. Noted the significant progress in trade, finance, connectivity, energy, civil aviation and nuclear domains.'

 

'Appreciated the greater focus on exploring new opportunities. Discussed making our cooperation more balanced and sustainable in different dimensions. Finalized the program of cooperation on the Russian Far East. Expect to hold an early meeting of EaEU-India FTA negotiators. Will jointly organize connectivity events across land and maritime corridors,' Jaishankar wrote on X announcing outcomes of the meeting.

 

India and Russia trade has reached unprecedented levels over the past two years. Since the start of the Ukraine conflict, Rupee-Ruble trade has faced obstacles due to accumulation of Indian currency by the Russian side in India. While Russia has started investing in India from the accumulated rupee, it is seeking an increase in Indian investments across sectors.

 

However, the process has smoothened to an extent over the last few months. Attempts are also being made to smoothen the payment transfer mechanism which was impacted by sanctions after the Russian invasion of Ukraine in 2022. Russia is seeking India’s green signal in implementing the Rupay-Mir card and a link between Russian online financial transfer system and India’s system.

 

Russian President Vladimir Putin recently pitched for use of more national currencies in India-Russia bilateral trade and called for ensuring smoother financial transactions between the two countries without any obstacles.

 

Putin had also called for increasing mutual investments in pharmacy, manufacturing and industry, and referred to the sharp increase in India-Russia bilateral trade since 2022 and hailed India’s energy purchases from Russia despite external pressure.

 

Meanwhile, announcing Jaishankar-Lavrov meeting in Moscow on Wednesday, the Russian foreign ministry stated that the foreign ministers of Russia and India will focus on current and prospective areas of bilateral cooperation, as well as discuss the schedule of upcoming contacts. The main emphasis will be on assisting in the further development of sustainable transport and logistics, and banking and financial chains, as well as expanding the use of national currencies in mutual settlements. Issues related to cooperation in high-tech areas, including space and nuclear, and joint projects for the development of hydrocarbons in the Arctic shelf and the Russian Far East, are also planned to be addressed.

 

They will discuss the priorities of Russia’s chairmanship in BRICS in the coming year. An in-depth exchange of views is expected on the formation of a just security architecture in the Asia-Pacific region, the situations in Ukraine and Afghanistan, as well as the Palestinian-Israeli confrontation, according to the Russian foreign ministry statement.

 

Moscow and New Delhi are committed to multipolarity as an essential factor in maintaining balance in the world order that has emerged over the past decades. Russia supports Global South countries in defending political and economic sovereignty, the statement affirmed.

With successfully exporting a trial shipment of fresh bananas to the Netherlands through sea route, India is now aiming to increase exports of this fruit to $1 billion in the next five years, an official said.

 

At present, exports of most of the fruits from India are happening by air route because of lower volumes and different ripening periods.

 

To increase the volumes, India is developing sea protocols for fresh fruits and vegetables like bananas, mangoes, pomegranates and jackfruit to promote their exports through ocean routes.

 

The protocol includes understanding voyage time, scientifically understanding the ripening of these commodities, harvesting at a particular time and training of farmers. These protocols will be different for different fruits and vegetables.

 

The Agricultural and Processed Food Products Export Development Authority (APEDA), along with other stakeholders, has developed these protocols for bananas. APEDA is an arm of the Commerce Ministry.

 

'With the successful trial shipment, India aims to export bananas worth over USD one billion in the next five years, opening doors to a diversified market portfolio through sea route,' the official said.

 

The trial shipment reached Rotterdam, Netherlands on December 5. The consignment was shipped from Baramati, Maharashtra.

 

India's banana export destinations extend beyond the Middle East, with potential opportunities in major global players like the U.S., Russia, Japan, Germany, China, the Netherlands, the UK, and France, the official added.

 

Despite being the world's largest banana producer, India's export share is currently just one per cent in the global market, even though the country accounts for 26.45 per cent of the world's banana production at 35.36 million metric tonnes.

 

In 2022-23, India exported bananas worth $176 million, equivalent to 0.36 MMT.

 

The main banana producing states include Andhra Pradesh, Maharashtra, Karnataka, Tamil Nadu, and Uttar Pradesh.

 

Assistant Professor and expert on Agri Economics Chirala Shankar Rao said that huge export potential for bananas is there from Andhra Pradesh.

 

APEDA's continuous efforts, including B2B exhibitions and the development of sea protocols for other fruits, highlight a proactive approach to boost India's agricultural exports, the official added.

Kyrgyzstan has increased import of rice by 33.7% in January-November 2023, according to the National Statistical Committee.

 

Rice imports grew to 8,600 tons over 10 months. Kyrgyzstan mainly imported rice from Kazakhstan, Russia, India and Pakistan.

 

In dollar equivalent, rice imports grew by 38.4% to $5.8 million. 

 

Rice prices varied between $0.2-1.7 for a kilo.

In the UN's Food and Agriculture Organisation (FAO)'s recently published World Food and Agriculture Annual Statistical Booklet 2023, Bangladesh produced around 93.3 million tonnes of agricultural produce in 2021. 

 

China ranks first in food imports, while the Philippines comes up second.

 

In the same year, the country imported around 12.5 million tonnes of food products from the global market. The highest food import expenditure is still made on wheat, edible oil and milk powder.

 

Indicating that the cost of import-dependent food products in Bangladesh is high, FAO stated that the per capita consumption of edible oil, meat, milk and such nutritious food is the lowest. 

 

However, the per capita consumption of food produced in the country, like rice, vegetable, fish and fruit, is good. In this category, the people of Bangladesh are ahead in calorie consumption, the report said.

 

Commenting on the data, Agriculture Minister Abdur Razzak told the media, "We have taken the initiative to increase the production of import-dependent food products. Production of edible oil, onions and lentils is increasing as a result of innovating new varieties and providing incentives to the farmers. We hope these agricultural products will curb Bangladesh's dependence on imported agricultural products."

 

The FAO report, however, highlighted that Bangladesh has fallen behind in food exports.

 

The top five countries in food exports are, in order, US, UK, Germany, China and France. Bangladesh is near the bottom.

 

The country ranks third in rice production only among the six main food products of the world. It does not rank among the top five countries in the production of wheat, corn, sugar, edible oil and potatoes. 

 

In the past years Bangladesh imported the first four products. It was not necessary to import potatoes. In fact, Bangladesh would export potatoes. With the price of potatoes suddenly shooting up this year, the country has now entered the list of potato importing countries.

 

The FAO report further said Bangladesh's dependence on food import from the global market is increasing. 

 

In 2010, Bangladesh imported 9.3 per cent of its total food demand, and in 2022 that went up to 11.2 per cent. In that span of time, Bangladesh's imports of rice, wheat and edible oil have been rising. But due to the dollar crisis, hardly any rice was imported this year. Wheat imports also fell by 30 per cent from the normal volume.

 

The report highlighted the per capita consumption of calories of all countries. Globally on average, each person consumes 2,978 calories per day. In Asia that average is 2,931 calories. 

 

In Bangladesh the per capita calorie consumption is 2,614 calories. Of the total calories, 1,288 calories is from rice and wheat or other food grain. Then comes edible oil with 203 calories, sugar with 83 calories, fruit 94 calories and potato 175 calories. 

 

People in Bangladesh get only 20 calories from meat, 55 calories from milk and eggs, 40 calories from soft drinks and 52 calories from fish.

 

According to FAO, Bangladesh ranks among the top ten countries in the world in the production of 22 agricultural products. 

 

These include rice, masur dal (lentils), potato, onions, tea and such products as well as various fruits. Bangladesh entered the top ranking lost over the last decade in the production of certain vegetables like pumpkin, cauliflower and such.

The California walnuts shipped from the US to India have seen a sharp uptick with imports more than doubling from September to November against the same period last year. This comes after New Delhi removed its retaliatory customs tariffs on the key dry fruit.

 

Two days ahead of US President Joe Biden’s visit to New Delhi to attend the G20 Summit on September 9-10, India dropped additional customs duties on about half a dozen US goods that were imposed in 2019 in response to America raising tariffs on certain steel and aluminum products coming from India.

 

ICRA has maintained its revenue growth expectations at ~8-10% for the domestic poultry industryin FY2024. This will be driven by significantvolume expansion andimproving share of organised players, said ICRA in a note.

 

'While realisations were strong in H1 FY2023, they started tapering thereafter due to excess supply. Subsequently, the pick-up in demand in the current fiscal resulted in improvement in average realisations to ~Rs. 107/kg in H1 FY2024 compared to ~Rs.101/kg in FY2023 (Rs.96.5/kg in H2 FY2023). The festive season and cold weather should support demand and realisations in the balance part of FY2024,' said ICRA.

 

Sheetal Sharad, Vice President and Sector Head, ICRA Ltdsaid: 'While realisations improved in H1 FY2024 following controlled supply and healthy demand, players’ earnings were further supported by softened feed costs. Maize (which comprises 60-65% of the feed cost) prices declined by ~9% over H1 FY2023 and those for soyabean (comprising ~30-35% of feed cost) reduced by~21% over H1 FY2023. While the raw material pricing has been favourable so far, substantial contraction in soyabean harvest during the kharif season and delayed sowing of maize raise concerns on the potential spike in feed costs, which is likely to exert pressure on the margins of poultry companies.'

 

There have been limited occurrences of avian influenza or bird flu across the country in the current fiscal. Localised incidences of bird flu were reported in Kerala and Jharkhand in Q4 FY2023 and Q1 FY2024, which did not spread further. Any major local outbreaks may have temporary effects on demand and realisations in the affected and nearby regions. Since winters are prone to disease outbreaks, the upcoming months will remain critical.

 

In October 2023, the World Organisation for Animal Health (WOAH) approved India’s self-declaration of freedom from Highly Pathogenic Avian Influenza (HPAI), or the bird flu, in specific approved farms in Maharashtra, Tamil Nadu, Uttar Pradesh and Chhattisgarh. 'This development is expected to provide new opportunities for Indian poultry companies in the global market in the medium to long term. In September 2023, India and the US jointly announced resolution of the long-standing poultry dispute pertaining to allowing US poultry products in the Indian market. This could open the Indian markets to US poultry products, thus increasing the competitive intensity and exerting pressure on realisations,' said ICRA.

 

'The industry credit profile remains vulnerable to the inherent volatility in earnings. Over the medium to long term, we expect the domestic demand in India to be favourable, supported by a rising urban population, changing eating habits and growing penetration of quick-service restaurants. To support the transition to higher margin value-added products, ICRA expects poultry companies to invest in capacity additions towards feed mills as well as move towards forward integration into meat processing plants.The increased working capital requirements for feedstock amid expected rise in input costs, could keep debt at high levels,'Sharad added.

The department for promotion of industry and internal trade (DPIIT) is working with 24 sub-sectors, including furniture, aluminium, agrochemicals and textiles, to promote domestic manufacturing, boost exports and reduce imports, according to an official statement.

The commerce and industry ministry on Tuesday said that since its launch, 'Make in India' has made 'significant' achievements and is now focusing on 27 sectors under 'Make in India 2.0'.

 

While the DPIIT is coordinating action plans for 15 manufacturing sectors, the Department of Commerce is coordinating for 12 service sectors.

'Now, DPIIT is working closely with 24 sub-sectors which have been chosen keeping in mind the Indian industries strengths and competitive edge, need for import substitution, potential for export and increased employability,' the ministry said.

It added that these sub-sectors are -- furniture, air-conditioners, leather and footwear, ready to eat, fisheries, agri produce, auto components, aluminium, electronics, agrochemicals, steel, textiles, EV components and integrated circuits, ethanol, ceramics, set top boxes, robotics, televisions, close circuit cameras, toys, drones, medical devices, sporting goods, gym equipment.

'Efforts are on to boost the growth of the sub-sectors in a holistic and coordinated manner,' it said.

It also said that investment outreach is being done through ministries, state governments and Indian missions abroad; investment identification of potential investors, handholding and investment facilitation is done through Invest India.

PHILIPPINE President Ferdinand Marcos Jr has approved the extension of reduced tariffs on rice and other food items until the end of 2024, to keep prices stable amid a threat of dry weather in the coming months, his office said on Tuesday (Dec 26).

 

The modified rates first approved in 2021 had already been extended this year due to high inflation, and Marcos said another extension was needed until the end of next year.

 

'The present economic condition warrants the continued application of the reduced tariff rates on rice, corn, and (pork)... to maintain affordable prices for the purpose of ensuring food security,' Marcos was quoted as saying in a statement.

 

Inflation was at 4.1 per cent in November, easing for a second straight month, but has averaged 6.2 per cent in the first 11 months of 2023, well outside the Philippine central bank’s 2 to 4 per cent target for the year.

 

The extension of the modified tariffs, Marcos said, is aimed at ensuring affordable prices of rice, corn and meat products with the looming effects of the El Nino dry weather phenomenon early next year and the continued threat of African swine fever.

 

The tariff rate for rice will remain at 35 per cent, while import levies on corn will stay at 5 to 15 per cent and 15 to 25 per cent for pork products, according to the new executive order extending the modified tariff rates. 

After registering a growth of nearly 40 per cent between 2019-20 and 2022-23, mustard production may miss a similar feat this year though the government’s target of a modest 4 per cent rise in production during 2023-24 can be achieved. Farmers in many small States stayed away while there is no big jump in area seen in large producing States such as Rajasthan or Madhya Pradesh. Uttar Pradesh is the only exception where acreage has jumped 32 per cent until December 22.

 

Acreage up

The area under mustard and rapeseed has increased to 95.23 lakh hectare (lh) as on December 22, up by 2 per cent from 93.46 lh. While there was a 1.6 lh drop in Rajasthan, Uttar Pradesh has reported 4.3 lh higher acreage. In absolute terms, there is no big difference elsewhere.

 

No planting of mustard has been done in Ladakh, Maharashtra, Manipur, Tripura and some other States though normal area together may not even be one lakh hectares, sources said. Though there was a plan to raise areas in the North-East, it has not been successful this year as the total mustard acreage in Assam, Arunachal Pradesh, Nagaland, Meghalaya, Sikkim, Mizoram and Manipur has reached 3.67 lh until last Friday against 3.28 lh an yearago, whereas the normal area is 3.82 lh.

 

Conducive weather

Admitting that it is not possible to achieve the same growth that has been accomplished in the last three years, PK Rai, Director of Bharatpur-based Directorate of Rapeseed-Mustard Research, said the weather has been very conducive so far and it is possible to achieve the targetted production.

 

'Diseases like white rust and others play an important role in disrupting mustard yield. Fortunately, there is no such report from anywhere about any pest attack on mustard. The impact of El Nino, as was speculated, is yet not seen on the ground, so far. If the weather remains conducive for the next two months, it is possible to achieve the targetted production,' Rai told the businessline.

 

Rajasthan situation

He also said that Rajasthan plays an important role as any changes in the State also has a resultant impact on the country’s overall mustard production, since it has a large area under this winter oilseed crop (40-45 per cent).

 

The Agriculture Ministry has set the mustard production target at 131.4 lakh tonnes (lt) for 2023-24 crop year (July-June), up from estimated actual output of 126.43 lt in 2022-23. Mustard production was 91.24 lt in 2019-20.

 

Jodhpur-based Bhagirath Choudhary, Founder-Director of South Asia Biotechnology Centre, said that several farmers in Rajasthan have shifted to spices crops from mustard and, as a result, the fall in acreage could be even higher than the government estimate.

 

'Tremendous negative sentiment exists about mustard in traditional mustard-growing areas due to higher than normal temperature and prevailing lower market price. Farmers have shifted to spices such as cumin, fennel and isabgol. Additionally, El Nino effects are already felt in this season with higher than normal temperature, no winter precipitation and absence of foggy conditions which would ultimately reduce duration of harvest, possibly impacting overall yield in northern parts,' said Choudhary.

 

But, Rampal Jat, president of Kisan Mahapanchayat, is hopeful of a better yield and higher production of mustard despite a fall in acreage. At the same time, he has sought 100 per cent procurement of mustard by the government at the minimum support price (MSP) which will motivate farmers to stick to the crop or rather increase the area.

 

Recalling the dropsy episode of 1998, Jat said, 'The Centre’s policy plays an important role in prices of mustard and the government should ensure that domestic farmers are supported with assured purchase at MSP rather than helping soyabean growers of the US or palm oil farmers of Indonesia.'

 

India's agri export basket is dependent on just five commodities including rice and sugar and this makes the sector vulnerable to fluctuations in global prices and demand, a report by economic think tank GTRI said.

The Global Trade Research Initiative (GTRI) said that these five products -- basmati rice, non-basmati rice, sugar, spices, and oil meals -- account for 51.5 per cent of India's total agriculture exports.

 

Furthermore, India grapples with various domestic challenges, including infrastructural deficits, quality control issues, and non-tariff barriers, all of which impede the growth and competitiveness of the country's agricultural sector, it said.

 

'This makes them (agri exports) vulnerable to fluctuations in global prices and demand,' it said, adding these commodities also face frequent export bans in India.

At present export of non-basmati rice is banned from India and the country is also fighting at the WTO (World Trade Organisation) to protect subsidies to rice and wheat under a public stock holding programme.

Besides, certain WTO member countries have taken India to disputes on sugar for providing subsidies to farmers.

'All this makes India's top exports vulnerable and uncertain,' it added.

To deal with the issue, the think tank has suggested the government to focus on areas like modern infrastructure for the sector.

 

The report said that China with higher rice productivity does not encourage export of rice as every kilogramme of rice can consume up to 800 litres of water.

It also said that in 2023, India's agricultural trade landscape presents a challenging scenario.

With agriculture exports and imports projected to reach $43.3 billion and $33 billion, respectively, the sector is experiencing a significant downturn compared to the previous year, it added.

'Exports will decline by 7.2 per cent and imports by 10.1 per cent in 2023 over 2022. India's agriculture exports will be 10.1 per cent of India's merchandise exports. This decline is exacerbated by the concentration of exports in a few products like rice and sugar, making the market susceptible to global price fluctuations and policy constraints, such as export bans and WTO disputes,' it added.

 

However, it said that India is learning from global developments and implementing innovative initiatives like farm-to-fork and traceability systems across various agricultural products to enhance quality, safety, and market accessibility.

GTRI Co-Founder Ajay Srivastava said, 'Indian agriculture faces significant challenges, including a heavy reliance on rice and sugar, which makes it vulnerable to global market fluctuations and domestic policy changes and unorganised sector activity.' He suggested a rethink on the sector as export earnings do not justify input or environmental costs in most cases.

The sector is hindered by inadequate cold chain infrastructure and inefficient logistics, leading to spoilage and export competitiveness issues, Srivastava said, adding quality and traceability inconsistencies, along with high non-tariff barriers in international markets, further impede export potential.

 

'At the policy level, India's large public stockholding for food security is a contentious issue at the WTO, with ongoing negotiations adding to the uncertainty. These challenges, compounded by global agricultural trends and the dominance of a few large firms in the international grain trade, highlight the need for strategic improvements in infrastructure, quality control, and policy adaptation to enhance India's agricultural sector's global competitiveness,' the report said.

The three primary categories for exports are -- basic agriculture products, processed agriculture products, and other products.

According to the GTRI's forecast, basic agriculture products will see a decrease in export value from $24.8 billion in 2022 to $22.3 billion in 2023, marking a 10 per cent decline. This category constituted a significant 51.5 per cent share of India's total agricultural exports.

 

Processed agricultural product exports may dip from $16.3 billion last year to $15.7 billion in 2023. The sector accounts for 36.3 per cent of the total exports.

It added that other product categories can register a dip of 5.6 per cent to $5.3 billion in 2023 from $5.6 billion in 2022. It accounts for 12.2 per cent of total exports.

Non-basmati rice exports have dipped by 12.2 per cent to $5.51 billion so far this year (2023). However, basmati rice exports rose by 17.7 per cent to $5.3 billion this calendar year.

Sugar exports dipped by 32.4 per cent to about $4 billion so far this calendar year. Spices and oil meal exports have increased by 8.5 per cent and 48.6 per cent to $3.72 billion and $1.,83 billion during the period under consideration.

 

The other agri products which India exports include coffee, castor oil, fresh fruits, tobacco, processed fruits and juices, groundnut, fresh vegetables, Ayush and herbal goods, meat, silk, wool and cotton, dairy, and live animals.