National grain farmer representative body, GrainGrowers, will work to enhance export opportunities for Australia’s quality grains, pulses and oilseeds and improve business relationships with major customers through consultations with high-ranking government officials and customers as part of Australia Business Week in India this week.
GrainGrowers’ Trade and Economics Manager Luke Mathews is currently in India as part of the Austrade delegation, along with Australian exporters, industry leaders and key Australian Government officials.
Supporting efforts to improve understanding of Indian market dynamics, GrainGrowers today released a report on the growing importance of the Indian market for the Australian grains industry.
“India’s growing import demand for grains, oilseeds and pulses will no doubt benefit the Australian industry for many years to come,” said Mr Mathews.
“Total Indian grain consumption has averaged 232.1 million tonnes over the past five years, and has grown at an average rate of 3.8 million tonnes per annum over the past decade.
“India has remained largely self-sufficient in grain production in the past five years with production averaging 240.5 million tonnes per year. However, increasing rates of domestic demand growth driven by increasing population and changing diets – combined with slowing rates of production growth – will result in India emerging as a key import market for grains, oilseeds and pulses in the future.
“The development of a more intensive livestock industry in coming years is also expected to increase India’s need for imports.”
Turning to pulses, Mr Mathews said that Indian import demand had helped shape both global and Australian markets.
“India is responsible for roughly 25% of global pulse production, but also 30% of global pulse trade demand with imports of more than 6 million tonnes in 2016. India takes around 80% of Australian chickpea exports, and has largely been responsible for the recent growth in the Australian pulse industry,” he said.
Mr Mathews said India also currently imports around 14 million tonnes of vegetable oils, although the imports are currently dominated by palm oil.
“Future growth in protein meal demand will raise the likelihood of additional imports of ‘whole’ oilseeds, such as Australian canola, in order to satisfy both vegetable oil and protein meal demand.
Indian demand growth is now also shaping the wheat import market, said Mr Mathews.
“Historically, India has been a sporadic importer of wheat due to local seasonally-induced production shortages. However, India is now shaping up as a structural net-importer of wheat.
“After exporting wheat for much of the past decade, over the past two seasons India has imported nearly 10 million tonnes of wheat. Australia has emerged as a significant beneficiary of India’s wheat import demand.
“Australian wheat exports to India reached 920 thousand tonnes in 2016, and have surged to more than 1.7 million tonnes in the first six months of 2017, including a monthly record of 874 thousand tonnes in January 2017.
“Virtually all of Australian wheat exports are bulk. However competition for India’s wheat consumer is intense, particularly from low-cost Black Sea (particularly Ukrainian) exporters.”
Mr Mathews said that India’s grain and food industry was subject to a high degree of policy intervention, with partly-opposing objectives of:
* Maintaining farmer incomes; and
* Maintaining food security and affordable grain supplies to low-income households.
“Minimum producer support prices, input subsidies, public distribution systems, import tariffs, changing import conditions and other technical barriers to trade blur true market signals in the Indian grain market,” Mr Mathews said.
“GrainGrowers’ report details the nature of the Indian grain, oilseed and pulse market, with a particular focus on trade dynamics and current policies impacting the sector.”
Mr Mathews’ itinerary includes a briefing from the Australian High Commissioner to India, Ms Harinder Sidhu; attendance at the Australian Pulses and Grains Conference in Mumbai; site visits to processing facilities, a major port, a wholesale market complex, a large retail outlet selling Australian produce and a leading grocery e-retailer, together with food futures forums, industry roundtables, meetings and networking opportunities where delegates will showcase Australian grain capabilities to Indian industry representatives.