Agricultural exports, particularly spices, fruits and marine products, are likely to increase along with foodgrains as demand from West Asia and China continues to increase, according to S Sivakumar, GroupHead – Agri and IT Businesses, ITC Ltd.
But in the long term, India could turn a net importer as domestic consumption is increasing.
“Indian exports will continue to grow as China has turned a large importer. In the long run, however, we could turn a net importer since consumption here is rising,” he said during an interaction with
ITC’s agricultural exports have quadrupled to $40 million in the last few years with marine products shipments growing rapidly, he said. “But we could become a country which could export something (specific variety of a commodity) and import something (another variety of the same commodity),” Sivakumar said.
For instance, India could export special varieties of rice that are in demand abroad.
(Basmati, Ponni, Sona masuri and hand-pound red rice from Kerala aare in demand in the export market. On the other hand, there is demand for varieties such as the Jasmine rice from Thailand.)
“Even in fruits, we can export organic mangoes which are in great demand in Europe,” he said, adding that India would be able to sustain its high-value exports.
“On the other hand, the poultry sector in India is growing fast, resulting in higher consumption of soyameal,” he said. Rising domestic demand for soyameal could have an effect on its exports.
(Already, the poultry industry is demanding curbs on exports of soyameal in view of surge in its prices.)
The agri-business division of ITC was witnessing 10-15 per cent growth in the last couple of years with the income rising to ₹8,000 crore.
Tepid e-choupalITC, which pioneered the concept of electronic marketing for farm products in the country with its e-choupal, has been unable to make much progress with the concept since 2008.
About six lakh farmers have been roped in the e-choupal module.
This is because of new policies such as stocks limits on various commodities imposed by the Government to tackle surging inflation.
“We are now trying to leverage tablets and 3G services to reach out to a large number of farmers. It will help agri extension personnel reach farmers without a desktop computer,” Sivakumar said.
Processed foodsWith Indian consumers upgrading, the need for value-added food products is increasing, leading to greater demand for processed foods. This provides a strong potential for consumption dividend in Indian markets, the ITC agri-business official said.
“Let us take the example of atta. The total potential market at the current level of consumption, in the packaged milled form, is 25 million tonnes,” he said.
If 95 million tonnes (mt) of wheat is produced in the country, producers consume 35 mt and industrial users making bread and other products consume another 10 mt.
About 10 mt are retained as seed and other value chain linked requirements. Some wheat flows to low-income consumers, PDS and for Government welfare programmes.
About 25 mt can be consumed by people who technically buy quality products. “Today, packaged atta consumption is 2 mt, branded and unbranded put together,” Sivakumar said.
It would not be convenient for a family to buy wheat and get it milled in a neighbourhood flour mill every week. The market size for packaged atta in 2002, when ITC entered the market, was less than 350,000 tonnes.
“That was because the products available then did not meet the consumers’ needs. Consistency was absent too. Other convenience products such as biscuits and cookies are also increasing rapidly, especially in rural areas where the home-made snacks are giving way to ready-to-eat food,” he said.
Instant preparations – whether Indian cuisine or global such as noodles and pastas – are also expanding rapidly.
“We are at the beginning of the take-off phase in unleashing this consumption dividend,” Sivakumar said.
Asked about his views on genetically modified organisms, he said GM crops required more research and trials besides the approval protocol had to be strengthened.