AGRICULTURAL EXPORTS

Subjects: Agriculture/ Economy

Context: Commodity-wise foreign trade data from the department of commerce shows exports of farm goods from India during April-September at $18.12 billion, 4.6% higher than the $17.32 billion for the first half of 2019-20.

Concept:

• Most of the agri commodities exports have grown up. The highest rise is seen in Rice (Basmati and Non basmati), sugar etc.
• The general reason for rise in exports of most agri-commodities is that world prices, which were hardening in the months just before the pandemic and then crashed with lockdown measures imposed by most countries, have since resumed their earlier trajectory.
• This is captured by the UN Food and Agriculture Organization’s (FAO) Food Price Index (base year: 2014-16=100), which rose from 93.3 points in September 2019 to a 61-month-high of 102.5 in January 2020.
• Subsequently, it collapsed to a four-year-low of 91 points by May. But since then, it has risen every single month to touch 100.9 points in October.
• The recovery in global prices — courtesy a combination of demand revival from unlockdowns (opposite to what happened in April-May), continuing supply chain disruptions (including from a shortage of shipping containers), Chinese stockpiling (in anticipation of a fresh corona outbreak during the winter) and dry weather in producer countries such as Thailand, Argentina, Brazil and Ukraine — isn’t bad news for Indian