India’s role as a key supplier to the global gains market has diminished over the past three years due to strong domestic demand and the Government’s policies to keep domestic supplies within the country, the US Department of Agriculture (USDA) has said. 

“From trade year (TY) 2020-21 to 2023-24, corn exports are estimated to decline 86 per cent, rice exports 20 per cent, and wheat exports 90 per cent. India is exporting half the volume of grains compared to record shipments in 2021-22,” the USDA said in its “Grain: World Market and Trade” report. 

The Government’s ethanol policy and growing poultry demand for corn, export restrictions for certain types of rice, and an export ban for wheat have all contributed to the change in India’s grain trade environment and will continue to impact the outlook for 2024-25, it said.

Apeda data

According to the Agricultural and Processed Food Products Export Development Authority (Apeda), non-basmati rice exports dropped to 11.16 million tonnes (mt) in the 2024-24 fiscal from a record high of 17.78  mt in 2022-23. Wheat exports dropped from 7.23 mt in 2021-22 to 0.19 mt last fiscal. Exports of corn (maize) during the same period slipped to 1.44 mt from 3.69 mt.

For the first time this century, India will likely be a net importer of corn this trade year ending this month. “The largest shift in India’s grains trade is for corn. In 2023-24, India is on pace to lose its position as a net exporter for the first time this century,” the USDA said.

A surge in demand for feed, primarily from the poultry sector, along with domestic policy incentivising corn for ethanol production has kept supplies within the country and spurred India to begin importing for the first time since 2019-20, the USDA said. 

In addition, a 15 per cent year-on-year decline in global corn prices has made Indian exports less competitive, This has supported favourably priced corn imports. 

Share in global market

According to the Food Security portal, the share of the restricted products in the country’s total food exports is about 5 per cent in dollar terms. The share of these products in the global market is nearly 7 per cent. 

India recently revised its 2018 National Policy on Biofuels to include corn as a feedstock, offering price incentives for corn-based ethanol. “Sugar, India’s primary feedstock for ethanol, has faced government restrictions in usage for ethanol following multiple years of low production, further incentivising corn feedstock,” said the USDA. 

Ethanol manufacturers’ shift to corn as an alternative has coincided with a 10 per cent increase in feed demand from India’s growing poultry sector. For the first time since 2019-20, India imported corn from Ukraine and Burma, where non-genetically modified corn cultivation meets India’s import restrictions. 

“Additionally, in June, India announced corn imports of 500,000 tonnes under the Tariff Rate Quota (TRQ) regime at a 15 per cent duty to satisfy this sharp rise in demand,” the USDA said. 

Shift to others

India has been a key corn exporter to Vietnam, Nepal, and Bangladesh, exporting 2.8 mt in 2022-23, nearly a quarter of the countries’ combined total corn imports. However, exports from India to these countries declined 86 per cent in the first 8 months of 2023-24. 

“In response to this dropoff, countries shifted to other exporters or relied further on domestic supplies,” it said.

Domestic demand is expected to remain strong in 2024-25 amid ongoing demand from the ethanol and feed sectors. “India will attempt to meet its ethanol blending with petrol programme (EBP) targets rates and has not yet indicated when restrictions for sugar in ethanol will be lifted,” the USDA said.

The US department pegged exports 2 lakh tonnes lower than 2023-24, “representing a longer-term shift in the India’s trade environment as these factors continue to persist”. 

Negligible wheat exports

On the ban on rice exports, the USDA said the government’s decision to ban exports of some types of rice (albeit with a considerable number of exemptions) and apply export taxes to others has disrupted the global market. 

“When India implemented the ban, rice prices spiked before eventually easing as competitors increased exports. Despite large stocks, the ban on regular white rice exports remains in place, prompting importers to shift to other suppliers such as Vietnam and Thailand,” it said. 

India has had negligible wheat exports since it implemented an export ban on wheat in May 2022. “The ban was implemented to quell high prices, prioritise domestic consumption after a surge in exports and a smaller crop, and stabilise stocks,” the US department said. 

Core markets within Africa are still impacted by India’s curbs, while some have been allowed to continue buying via government-to-government agreements. “Countries like Benin, Mozambique, and Madagascar, where India was the sole supplier, have turned to buying from Pakistan and Thailand,” it said.

With strong consumption, wheat ending stocks in 2023-24 dwindled to the lowest level in over 15 years.  

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