Bilateral pacts may help India sustain exports of agri commodities.

CHANDIGARH: Exporters of agri commodities such as wheat, sugar and cotton feel that shipments could pick up if India would enter into bilateral agreements with countries in the Middle East, Africa and the Saarc bloc.

Comfortable global stock and a slowdown in the world economy are making Indian agri commodity exports unviable, say exporters. With a weak rupee, exporters are confident of demand for Indian agri products in international market if bilateral agreements are in place.

Bilateral agreements have earlier ensured exports of wheat to Afghanistan and Bangladesh and could further boost Indian exports, an analyst said. "Iran, a major importer, is procuring wheat from Australia and Canada. India can export wheat to Iran, Saarc and West African countries with the help of bilateral trade agreements," said Emmsons International MD Anil Monga. Basmati rice exporters hope India will have a trade agreement with China.

Currently, there is a downward pressure on wheat prices with a bumper crop anticipated in India. "The government has to market Indian wheat aggressively before the new crop from Russia arrives in the next two months. Canadian and Australian exporters are giving a negative publicity to Indian wheat saying it has been affected with a fungal disease," said Emmsons International MD Anil Monga.

Indian wheat was quoted at $270-275 a tonne in the Middle East and Saarc countries compared to Argentina wheat at $230-232 and Australian wheat at $245. "Procurement cost and movement of the commodity to ports are not viable for exporters and merchant houses. Ideally, wheat in the range of $225-230 a tonne FOB will have buyers," said Indian Pulses and Grain Association president Pravin Dongre.

A pause in cotton demand by China, the world's largest procurer of the raw material, has impacted Indian exporters. Multinational merchants have started offloading pressed cotton lots to local mills in Gujarat and Punjab, said ginners and traders.

"India's unclear export policy has cost us dear. Apart from slow buying by Pakistan and Bangladesh, there is negligible demand in the international market," said Cotton Association of India president Dhiren Sheth. However, with China likely to issue one million tonne of import quota, India exporters could be benefited.

International demand for sugar is weak owing to ample stocks following good production in India and Thailand. "The Brazilian policy on petrol will decide how much sugar will be processed and how much will go for ethanol," said New Delhi-based International Trading Co director Kiran Wadhwana. White sugar future prices were at $643 a tonne on April 1, which are currently ruling at $560 due to expected higher supply from India, according to sugar traders.

However, basmati and non-basmati rice exports look viable. Indian basmati prices are competitive in the range of $800 to $1,500 a tonne. Indian parboiled rice is selling at $520 a tonne compared to Thailand's at $590 a tonne.

Source : economictimes.indiatimes.com