TRADE UPDATE #70

Hope in Patches

22/05/2020

The government’s pan-India lockdown to curb the spread of COVID-19 has entered its eight week. The global pandemic and the subsequent halt to international economic growth has taken many completely unaware and unprepared. After weeks of a complete freeze of economic activity in the country, the Indian government has finally taken steps to restart industry with a stimulus package as well as partial lifting of certain lockdown restrictions in relatively unaffected areas.

For the export community, the pandemic and the lockdown have caused widespread chaos. But there are glimmers of hope coming through finally, with certain commodities like basmati and aluminium beginning to receive orders. As economies around the world start to emerge from their lockdowns, demand for commodities is expected to slowly pick up, especially for essential goods like agri products, medicines & pharmaceuticals, and minerals and ores.

However, there remains a lot of uncertainty, and the Federation of Indian Export Organisations (FIEO) has warned that the outlook for the country’s exports remains “extremely negative”. Certain sectors like oilmeal and gems & jewelry have seen stupendous losses in the last two months, and overall exports are expected to decline by up to 20% in the current financial year. Nevertheless, a gradual and slow recovery is the best way forward. As overseas demand starts to pick up and the world inches back to normalcy, one can likely look forward to more patches of hope across the Indian export ecosystem.


COMMODITY

Exporters flush with orders, good season expected for basmati growers in Punjab

Basmati exporters have asked the growers of this aromatic variety in the state to increase the area under cultivation, saying that they have orders in hand, despite the COVID-19 pandemic affecting most other sectors of the economy. “We are flush with orders from West Asia, Arabian countries, Europe, Canada and the US. We have asked farmers to increase the area under cultivation and would purchase the entire basmati crop at a good remunerative price,” says Ashok Sethi, President, Punjab Rice Exporters’ Association.


COMMODITY

Indian aluminium producers to overcome COVID-19 impact with rising exports and low input costs: Crisil

A new sector report by Crisil indicates that Indian aluminium producers are likely to sail through the COVID-19 impacts smoothly with rising aluminium exports, lower input costs, and cost efficiency strategies curated by the industry. “The domestic sales loss has been offset by companies adroitly exporting more, thanks to high cost-competitiveness that stems from improved sourcing and lower input costs,” said the report.


POLICY

Monetary, regulatory support can help agri industry account for 20% of exports by 2025, say experts

The monetary and regulatory support announced for the agricultural industry by the Finance Ministry on 15th May has the potential to help double the share of this sector in the country’s basket of exports to around 20% by 2025, according to some experts. However, the government will have to implement more measures to make these sectors more efficient and competitive, they said. “The strengthening of post-production facilities like cold chains, storage infrastructure and farm-gate projects will not only address wastage but will also improve unit realization of our agricultural products,” said Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO).


COMMODITY

Oilmeal exports plummet 60% in April on year

India’s oilmeal exports for April dipped by 60% to 102,001 tonnes as against 2,54,585 tonnes reported in the same month last year. Sharing the provisional export data for the month, the Solvent Extractors’ Association of India (SEA) stated that the oilmeal exports dipped primarily because of the disparity in the export vis-a-vis other origin of oilmeals. “The higher MSP of soybean and rapeseed has further discouraged the exports and the trend may continue in the coming month also,” SEA stated in a statement on 20th May.


EXPORTS

COVID-19: FIEO expects 20 per cent fall in export during FY21

The Federation of Indian Export Organisations (FIEO) said on 19th May that the exports from the country are expected to fall by 20% in the current fiscal in the wake of the coronavirus pandemic. The outlook is “extremely negative” at the moment, and the fall in exports will also be accompanied by a decline in imports, an official of the apex exporters’ body said. “We expect that export during the current financial year is likely to fall by 20%. In value terms, this will be around US$50-60 billion,” FIEO Director-General and Chief Executive Officer Ajay Sahai said.


OTHER NEWS

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