India’s Agricultural Exports Drop Due to Red Sea Crisis
APEDA Chairman Abhishek Dev and Commerce Ministry’s Rajesh Agrawal Speak Out
New Delhi, India – Agricultural exports in April-June 2024 dropped by 3% due to the Red Sea crisis. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), agri exports during this period were USD 5886.81 million, compared to USD 6083.83 million a year ago.
Addressing a press conference, APEDA Chairman Abhishek Dev stated that various issues have dragged exports down during the first quarter. He said, “Agri exports are facing challenging headwinds along with tight domestic supply conditions. The Red Sea basin issue persists. We have seen an increase in freight costs and a shortage of containers. These factors are behind the decrease in agri exports.”
According to APEDA, maize exports have seen a significant decline of 76%. Maize exports in April-June dropped to USD 60 million, down from USD 517.80 million in April-June 2023. Despite good production in India, local prices are higher than international prices, leading to reduced maize exports. During the quarter, exports of cashew and oil meals declined by 17% and 25%, respectively. Exports of basmati rice and parboiled rice registered a flat growth of 0.46%.
Rajesh Agrawal, Additional Secretary of the Commerce Ministry, mentioned that rice exports, a major export commodity, were almost flat due to export controls. He added, “Although rice exports are flat, we expect an update in the coming period. We have been performing well in fruits and vegetables, with a growth of around 6.47% in exports.”
Agrawal also highlighted efforts to broaden the agri exports network by onboarding Farmer Producer Organizations (FPOs). “1,200 FPOs were registered as exporters, signifying their growing potential to drive agricultural exports. We aim to onboard 2,500 FPOs this financial year, doubling the current level. APEDA has initiated a pilot program to onboard exporters and FPOs onto the export vertical of the ONDC platform. So far, 13 exporters have joined the platform. APEDA has set a target of onboarding 250 exporters/FPOs.”
He further noted, “We are focusing on 25 new products that can be exported from India. We are developing a strategy to find new products and geographies, as diversification within our country will help expand the agricultural export basket. Currently, exports are concentrated on a limited number of commodities and regions.”
Doubts Revealed
Red Sea Crisis -: The Red Sea Crisis refers to problems happening around the Red Sea, which is a big body of water between Africa and Asia. These problems can affect shipping and trade routes.
APEDA -: APEDA stands for Agricultural and Processed Food Products Export Development Authority. It’s a government organization in India that helps with the export of food products.
Chairman Abhishek Dev -: Abhishek Dev is the head of APEDA. He helps make decisions about how to improve and manage the export of agricultural products from India.
Commerce Ministry -: The Commerce Ministry is a part of the Indian government that deals with trade and business. They help make rules and policies for buying and selling goods.
Rajesh Agrawal -: Rajesh Agrawal is a person who works in the Commerce Ministry. He helps with making plans to improve India’s trade and exports.
Freight Costs -: Freight costs are the money needed to transport goods from one place to another. If these costs go up, it becomes more expensive to export products.
Container Shortages -: Container shortages mean there aren’t enough big boxes (containers) to ship goods. This can slow down or stop exports.
Maize Exports -: Maize is another word for corn. Maize exports mean selling corn to other countries.
Cashew Exports -: Cashews are a type of nut. Cashew exports mean selling these nuts to other countries.
Oil Meals -: Oil meals are the leftovers after oil is extracted from seeds. These are often used as animal feed.
Farmer Producer Organizations -: Farmer Producer Organizations are groups of farmers who come together to sell their products. This helps them get better prices and support.
Diversify Export Products and Regions -: This means selling different kinds of products to many different countries. It helps reduce risk if one product or country has problems.