From Chairman's Desk

January 2019

Dear friends,

 

The country's exports grew marginally by 0.34 per cent to USD 27.93 billion in December 2018 on account of negative growth in sectors such as engineering and gems & jewellery, according to commerce ministry data.

 

During April-December this fiscal, exports grew by 10.18 per cent to USD 245.44 billion. Imports rose by 12.61 per cent to USD 386.65 billion. The trade deficit widened to USD 141.2 billion during the nine months of the current fiscal from USD 120.57 billion in April-December 2017-18

 

Exports of groundnut declined to 3,10,472 tons during April-November, 2018 from 3,17,585 tons during the corresponding period previous year. In value terms also groundnut exports decreased to Rs. 2079.98 crores during this period from Rs. 2198.38 crores in the corresponding period of 2017.

 

The spot European peanut market continues to surprise all with its quietness. One would think that the spot market would have finally woken up. Otherwise the mood of the market seems to have changed from pessimism to optimism.

 

Not much data coming out of Washington these days with the recent government shutdown. We will have to wait for reports to be updated to have a feel how exports and domestic demand are behaving. As to the 2018 crop, the latest report of January 28, 2019 shows 26, 69,860 tons.

 

Argentina has very little left to sell on 2018 crop with most of what is available being grade 2 and grade 3 material. As to the 2019 crop, things are looking great. Rains have been abundant. The only issue this year has been some period of lower than normal and ideal temperatures which has delayed some of the development of the plants, but nothing to be concerned about at least at this time. Otherwise Argentina is so far looking at a great crop for both quantity and quality.

 

Brazil is pretty much sold out of their old crop. On new crop, part of the crop has suffered partially from a drought in December/January which will reduce some yields. 

 

China continues to be weak with slow demand and low prices. It is unclear at this time how this will impact the new crop plantings.

 

Sesame seed exports during April-November, 2018 increased marginally to 2,25,606 tons in comparison to 2,24,376 tons during corresponding period previous year. In value terms, Sesame seed exports increased to 2524.72 crores from 1852.57 crores.

 

Chinese New Year holidays will be over on 11th February and prices indicated from West Africa and Nigeria appear higher than the pre-holiday levels. What impact the new foreign exchange policies announced in Africa will have on prices remains to be seen.

 

Imports of Sesame seed during the period April to November 2018 have been about 29015 metric tons.

 

Niger seed exports during April-November, 2018 increased to 7250 tons in comparison to 5287 tons during corresponding period previous year. In value terms, Niger seed exports increased to 50.61 crores from 41.76 crores.

 

The export of Sunflower seed during April-November, 2018 was 1663 tons and 5612 tons during full year 2017-18.

 

The export of Safflower seed during April-November, 2018 was 2912 tons and 6729 tons during full year 2017-18.

 

The export of Linseed seed during April-November, 2018 was 7506 tons and 10042 tons during full year 2017-18.

 

The export of groundnut oil during April-November, 2018 was 16785 tons and 12171 tons during full year 2017-18. The export was mainly to China.

 

The export of sesame oil during April-October, 2018 was 7775 tons and 9452 tons during full year 2017-18. The export was mainly to Iran, China, Taiwan, Mexico, Netherlands, Singapore, UAE and USA.

 

The export of mustard and rapeseed oil during April-November, 2018 was 2534 tons and 3371 tons during full year 2017-18. The export was mainly to USA, UAE, Australia, Bhutan, Canada, Kuwait, Qatar and Sri Lanka.

 

The export of sunflower and safflower oil during April-November, 2018 was 3057 tons and 3641 tons during full year 2017-18. The export was mainly to USA, UAE, Bhutan, Nepal, Ethiopia, Singapore, Sri Lanka and Netherlands.

 

The export of linseed oil during April-November, 2018 was 158 tons and 250 tons during full year 2017-18. The export was mainly to USA, Rwanda, Bhutan, Australia, Saudi Arabia, Serbia, Yemen, Malaysia, Myanmar and Bangladesh.

 

The export of castor oil during April-November, 2018 was 4,21,212 and 6,97,092 tons during full year 2017-18. The export was mainly to China, USA, Netherlands, France and Japan.

 

Prices of various oilseeds (US$) are hovering around the levels as follows:

 

Sesame Seeds

Basis FOB

Price per MT

(January, 2019)

Natural Whitish 99/1/1

 Mundra / JNPT

1725-1750

Natural Whitish 98/2/2 

Mundra / JNPT

1700-1725

Hulled autodried Sortex regular 99.95%

 Mundra / JNPT

2020-2050

Hulled autodried Sortex Premium 99.97%

Mundra / JNPT

2125-2150

Black 99/1  Sortexed

Mundra

1930-1950

Black Jet Sortexed

Mundra

2170-2190

Ethiopian Whitish Humera

Djibouti  

1590-1600

Sudanese Whitish Gederaf

Port Sudan

1575-1590

Sudanese Reddish

Port Sudan

1340-1365

Nigerian Mixed

Lagos

1370-1395

Nigerian Maidiguri

Tin Can

1450-1475

 

Groundnut

Basis FOB

Price per MT

(January, 2019)

India

50/60 Java

Mundra

980-1080

60/70 Java

Mundra

950-1020

80/90  Java

Mundra

920-990

40/ 50 Bold

Mundra

1000-1060

50/60 Bold

Mundra

950-1000

60/70 Bold

Mundra

920-980

50/60 Java

Chennai

1180-1220

60/70 Java

Chennai

1140-1190

80/90 Java

Chennai

1100-1140

 

Other Oilseeds/oils

Basis FOB

Price per MT

(January, 2019)

Safflower Seed 1%

JNPT

 690 - 710

Mustard seeds Bold 1%

Mundra

 635 - 655

Mustard seeds small 1%

Mundra

 690 - 710

Niger seeds

JNPT

 830 - 850

Castor Seeds

Mundra

745

Castor Oil FSG

Kandla, in bulk vessel

1525

 

Source: Trade Estimates

 

The Government of India has formulated an Agricultural Export Policy for the first time with a focused plan to boost India's agricultural exports to USD 60 billion by 2022. This will integrate Indian farmers and India's high quality agricultural products with global value chains and also double India's share in world agriculture exports.

 

Let me tell you that the government is putting all its efforts for effective implementation of Agricultural Export Policy. During our meeting with Shri Suresh Prabhu Saheb, Hon’ble Minister for Industry & Commerce, we highlighted potential districts for formation of clusters for promoting export-oriented production. With the objective of promoting exports from clusters, we suggested for Official recognition and notification of clusters, Formation of FPOs, Ensuring adequate supply of certified seeds of export-worthy varieties in the clusters and Creation of warehousing facilities in the clusters. The need for cold stores for extended storage of finished goods. We also suggested for creation of corpus of funds for R&D with a mechanism to divert a suitable portion (say 25%) of mandi tax to this corpus by APMC and taking up a project on “Characterization of varieties for identification of export-worthy ones as per customer (importer) preference.

 

As a part of implementation of agricultural export policy, the Commerce Ministry has asked States/ UTs to explore all possible ways of tapping into the global value and supply chain by formulating an export strategy which is state specific and product specific and improve logistics and infrastructure in their region.

 

The Council is planning to organise “Farmer Mela” in Rajkot to give wide publicity and inform stakeholders regarding Agricultural Export Policy. We are confident that these measures taken on wide scale would immensely improve situation of agricultural sector in India which would result in further growth of exports sector.

 

The Council also highlighted various GST issues faced by agriculture export sector during the meeting with Hon’ble Commerce Minister. We request that the ministry should provide a one-time option to all the exporters who have wrongly availed higher drawback to refund the same to Customs department along with applicable interest thereon and allow them to get GST refund so that their issues are resolved and there are no losses to the exporter community. The exporter community is also not able to receive GST refunds in cases where export value is low and purchase value is high.

 

Shri Prabhu Saheb also took note of our request for China Centric Neutralization Scheme, 10% MEIS for Exports of Groundnuts, Increasing MEIS incentives to 10% for sesame seed exports to EU, 10% MEIS for exports of Vegetable oils, Hindrance in certification and approval of Groundnut processing units, the mandate to monitor exports of all oilseeds including Groundnuts under the IOPEPC, Issue on Technical Barriers to Trade with Eurasian Economic Union, Adverse impact of higher MSP of exports of Groundnuts and hardships faced by exporters due to frequent opening of their containers.

 

Friends, over 60% of total imports of food items in Gulf region is sourced from countries from counties in Asian and African regions. The food market of Middle East is growing rapidly. Importantly, UAE is considered to be a gateway to the Middle East region. Considering the strategic importance of the market, the Council is organising participation of its members for Gulfood 2019 being held at Dubai, UAE during 17-21 February 2019. I wish all the best to the participating exporters and hope that they will be able to garner new business opportunities and further deepen trade relationship with the existing buyers visiting Gulfood 2019.

 

Your Council has recently conducted a study to evaluate the ‘D’ Value for the Sesame seed Hulled industry in respect of temperature – time needed to reduce and / or remove salmonella.

 

Suggestions and inputs from members are extremely important for the vibrancy of this industry and trade.

 

With Best Wishes and Regards,

 

 

Sanjay shah

(Chairman)

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