Agri-sector industries demand export incentives as bumper kharif harvest expected

Economy


Pune: Agriculture-based industries like yarn, textiles, dairy, sugar and soyabean processing are seeking government incentives to increase exports, as domestic demand has remained subdued and they are expecting a bumper kharif production.

A good start to the monsoon season — average rainfall till July 17 was 10% above normal — and sowing that was 21% more than a year earlier till July 15 has boosted expectations on the kharif harvest. Meanwhile, demand has been low, causing worries of a glut in the market and its likely impact on prices. That could hurt the farm-based economy that has so far been largely insulated from the effect of the pandemic, say industry insiders.

Crop-based industries want the government to start preparing to deal with a surplus availability of some commodities.

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“Our cotton sowing is ahead of the previous year, while the carry-forward stock of cotton is also expected to be higher. If we get export incentives, we can increase yarn export by at least 40% to 50%,” South Indian Mills Association chairman Ashwin Chandran said.

With declining domestic and international demand for apparel, especially fashion apparel, the textile industry is concerned about competition from other Asian nations to retain its traditional export markets. Chandran said China, the largest market for Indian yarn, and a few other markets have given duty-free access to several countries such as Bangladesh.

In the dairy industry, with institutional consumption of milk and milk products like cheese, butter and khoya having fallen substantially due to the pandemic, dairies have been converting excess milk into milk powder. While farmers have launched agitations to get a fair price for milk, dairy units are seeking incentives to export the milk powder they have been accumulating.

“In Maharashtra, the milk price has fallen to Rs 17 a litre from about Rs 30 before the lockdown. We want the government to give a subsidy of Rs 10 a litre to the farmers,” said Ajit Navale of the Akhil Bharatiya Kisan Sabha.

RS Sodhi, the managing director of Gujarat Co-operative Milk Marketing Federation, said: “In India as well as across the world, the institutional consumption of milk products has remained almost negligible. Hence, we have requested the government to extend incentives to the milk farmers.”

Last year, Gujarat and Maharashtra had given incentives for exports. This year, there has so far been no export of milk powder.

The soyabean processing industry is keen to increase exports of soya meal and other products, as Indian soyabean commands a premium in the world market since it is not genetically modified.

Soybean Processors Association of India president Davish Jain said: “For the past three consecutive years, we were exporting about 2 million tonnes of soya meal every year. However, the export incentive has been reducing every year. This year, our export of soya meal is expected to fall to one-third, ending at 600,000-700,000 tonnes. We can tap markets like Iran. There are some possibilities of export to Europe.”

The sugar industry too wants continuation of government support for the sector to export the sweetener as the country is again looking at production of 32 million tonnes next season, against the domestic consumption of about 25 million tonnes. “Since we expect much higher production in the 2020-21 SS (sugar season), India will continue to export about 6-7 million tonnes of the surplus sugar out of the country during 2020-21 SS,” the Indian Sugar Mills Association said.



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