Explained: Agricultural exports are at a record high, but so are imports

India’s agricultural exports surpassed $50 billion in the fiscal year ending March 31, 2022. Although valued at $50.3 billion, imports are no less attractive, hitting a record high of $32.4 billion.

The table below shows the country’s agricultural trade trends over the past 10 years. The previous export record was $43.3 billion in 2013-2014. That year, by the way, also saw imports of just $15.5 billion, resulting in an agricultural trade surplus of $27.7 billion.

The following years were marked by a decline in exports alongside an increase in imports, which led to a reduction in the surplus to $8.1 billion in 2016-2017. Exports have been slow to recover, to $41.9 billion in 2020-21 and $50.3 billion in 2021-22. But with soaring imports, the agricultural trade surplus of $17.8 billion for 2021-22 was well below 2012-13 and 2013-14 levels.

Impact of world prices

Chart 1 shows how closely India’s agricultural trade performance is tied to international commodity prices. The Food and Agriculture Organization of the United Nations (FAO) food price index – having a base value of 100 for the period 2014-2016 – averaged 122.5 points in 2012- 2013 and 119.1 in 2013-2014. These were the years when India’s agricultural exports reached $42-43 billion. The collapse of the index to 90 points in 2015-2016 was accompanied by a fall in exports to less than 33 billion dollars. The last two years, particularly after October 2020, have seen a further spike in global agricultural commodity prices, with the lifting of Covid-induced lockdowns and also the aftermath of massive liquidity injections by central banks after the pandemic. The return of demand, reflected in the FAO index averaging 102.5 points in 2020-21 and 133 in 2021-22, has helped Indian agricultural exports to rebound and surpass $50 billion.

In general, high international prices – such as from late 2010 to 2014 and, more recently, from October 2020 – are favorable for exports of agricultural products. There is an almost unambiguous relationship between the FAO index and India’s agricultural exports. High world prices also tend to benefit farmers, both by bringing their achievements closer to export parity levels and by making imports more expensive. However, 2021-22 turned out to be different, seeing an increase in exports as well as imports – which was not the case in 2012-13 and 2013-14.

Commercial composition

Tables 1 and 2 show India’s top agricultural export and import commodities with individual values ​​exceeding $1 billion in 2021-2022, based on data from the Department of Commerce.

At the top of the list of exports are marine products, the value of which has steadily increased, from just over $5 billion in 2013-2014 to $5.9 billion in 2016-2017, $6.7 billion in 2019-20 and $7.8 billion in 2021-2022.

But the real increase came from rice (especially non-basmati), sugar and wheat, whose exports broke all previous records. 2021-22 has been a remarkable year for rice and wheat.

Not only did the country ship some 21 million tonnes (mt) of rice (17 mt non-basmati and 4 mt basmati) and 7.8 mt of wheat, but the removal of the two grains through the public distribution system also reached unprecedented levels of 55.1 t and 50.6 t, respectively.

The fact that India achieved its highest ever exports as well as its domestic sales of subsidized/free grains is proof of the bumper crops produced by its farmers.

By contrast, many of the items that contributed to the previous export boom have stagnated or even declined in the recent period.

These include basmati rice ($4.9 billion in 2013-14 to $3.5 billion in 2021-22), buffalo meat ($4.8 billion in 2014-15-3, $3 billion), cakes ($3 billion in 2012-13 to $1 billion), guar gum ($3.9 billion in 2012-13 to $447 million) and raw cotton (4 $.3 billion in 2011-12 to $2.8 billion).

As for imports, the 2021-22 peak was largely due to vegetable oils.

Vegetable oil imports were worth $7.2 billion in 2013-2014, rising to $10.9 billion in 2016-2017 and $11.1 billion in 2020-21, before climbing to $19 billion. dollars in the fiscal year just ended.

Pulse imports were $2.2 billion in 2021-22, but down from a peak of $4.2 billion in 2016-17. Other important import products were fresh fruits (mainly almonds and apples), cashew nuts (mainly raw nuts for re-export after processing), spices and natural rubber.

In the field of spices, India happens to be both a major importer ($1.3 billion in 2021-2022) and an exporter ($3.9 billion).

Exports mainly include chilli, mint products and cumin. On the other hand, there has been an upward trend in imports of pepper, cardamom and other traditional spices from plantations in countries like Vietnam, Sri Lanka and Indonesia.


The Russian invasion of Ukraine further boosted agricultural commodity markets, with the FAO Food Price Index hitting a new high of 159.3 points in March. This, based on past experience, should bode well for India’s agricultural exports. The country’s wheat and even corn exporters are expected to fill, at least in part, the void left by the two warring nations.

Optimism on this front has waned somewhat, however, following the severe heatwave that engulfed much of India from mid-March. Reports from the field suggest significant yield losses, especially for the wheat crop which was in the critical grain-filling stage when temperatures suddenly rose. With government procurement expected to more than halve from last year’s 43.3 tonnes, wheat export projections of over 10 tonnes may not materialize easily. The overall outlook for agricultural exports is largely dependent on the monsoon. Even when it comes to the stars of 2021-22, rice and wheat, public granaries are clearly not overflowing like during the pandemic period.

Meanwhile, there is little respite in sight on the biggest agricultural import product: edible oils. The war in Ukraine has dealt a severe blow to the sunflower oil trade. This, combined with drought in the soybean-growing region of South America and Indonesia’s ban on palm oil exports, is expected to keep world prices high for some time. And it’s not just edible oils. In 2021-2022, the country even imported $610 million worth of oilmeal, a product it exported heavily until recently.

Overall, 2022-23 could be tougher for India’s agricultural trade, despite high international prices that normally support exports while keeping imports in check. If the latest Reserve Bank of India actions and hawkish comments on food inflation are any indication, the political push for exports may also not be as intense.

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