Malaysia seeks additional 500,000 tons of rice from India - Business Guardian
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Agriculture

Malaysia seeks additional 500,000 tons of rice from India

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Malaysia is set to make a formal request to India for the procurement of an additional 500,000 metric tons of white rice, as confirmed by the country’s Agriculture Minister. This move comes in addition to the 170,000 tons of white rice that India had previously allocated to Malaysia for the year. India, being the world’s largest rice exporter, had imposed restrictions on rice shipments to address inflation concerns and ensure food security. According to Bernas, a state-run rice importer, Malaysia’s annual rice consumption stands at 2.5 million metric tons, with an average imported supply of 750,000 tons.

The Agriculture Minister, Mohamad Sabu, announced the forthcoming official request to India through diplomatic channels following a meeting with India’s Foreign Minister Subrahmanyam Jaishankar. Furthermore, Mohamad revealed that Malaysia had earlier submitted a request to India in January for 100,000 metric tons of onions through a government-to-government arrangement. This indicates Malaysia’s efforts to secure essential food supplies from India amidst its domestic consumption requirements.

The request for additional white rice from India underscores Malaysia’s reliance on imports to meet its rice demand and the importance of securing stable and sufficient food supplies for its population. As the two countries navigate their bilateral trade relations, the outcome of Malaysia’s request to India will significantly impact Malaysia’s food security and rice market dynamics. India’s decision on Malaysia’s request for additional white rice will be closely watched, particularly given India’s strategic position as a major rice exporter in the global market.

Malaysia’s reliance on imported rice highlights the significance of stable trade relations between the two countries in ensuring food security and meeting domestic demand. Furthermore, Malaysia’s request for onions earlier this year underscores the country’s efforts to diversify its sources of essential food items. The government-to-government arrangement reflects Malaysia’s proactive approach in securing critical commodities to address potential supply chain disruptions and price volatility.

Malaysia’s formal request to India for additional white rice underscores the importance of international cooperation in addressing food security challenges. The outcome of this request will not only impact Malaysia’s agricultural sector and consumer market but also highlight the broader implications of trade dynamics in the global food supply chain. As Malaysia awaits India’s response to its request for additional white rice, the outcome will carry significant implications for both nations’ agricultural sectors and trade relations. Malaysia’s proactive steps to secure essential food supplies underscore the importance of bilateral cooperation in addressing food security challenges amid global uncertainties.

The successful fulfilment of Malaysia’s request would not only alleviate immediate food supply concerns but also strengthen the foundation for future trade collaborations between the two countries. Conversely, any delays or restrictions in fulfilling the request could potentially strain bilateral relations and disrupt Malaysia’s efforts to meet its domestic consumption requirements. Additionally, the outcome of Malaysia’s request will reverberate across the wider region, as both countries play crucial roles in shaping rice market dynamics and food trade patterns. As such, a mutually beneficial resolution to the request would contribute to stability and resilience in the regional food supply chain.

In the context of evolving geopolitical dynamics and economic uncertainties, Malaysia’s pursuit of additional white rice underscores the imperative of fostering robust and dependable trade partnerships. By working collaboratively to address food security challenges, India and Malaysia can forge stronger ties and contribute to the collective well-being of their populations. In conclusion, the formal request from Malaysia to India for additional white rice highlights the inter-connectedness of global food systems and the importance of international cooperation in ensuring food security for all.

The successful resolution of this request would not only bolster Malaysia’s food security but also underscore the significance of fostering resilient trade relationships in an increasingly interdependent world.

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Trade

India eases onion export ban, allows additional shipments to Sri Lanka and UAE

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India has authorized the export of a restricted quantity of onions to the United Arab Emirates (UAE) and Sri Lanka amidst stringent export regulations on the staple vegetable. The Ministry of Commerce and Industry, in coordination with the Directorate General of Foreign Trade (DGFT), issued a notification permitting the export of an additional 10,000 metric tons (MT) of onions to both the UAE and Sri Lanka, facilitated through the National Cooperative Exports Limited (NCEL).

This decision comes in the wake of India’s continued efforts to manage onion exports amidst fluctuations in domestic availability and international demand. In March, the Indian government had sanctioned the export of 50,000 tonnes of onions to Bangladesh.

However, despite these allowances, the Indian government has extended the ban on onion exports until further notice. Initially imposed in early December 2023 until March 2024, the ban has been extended indefinitely. Export permissions will be granted solely based on central government approval, considering requests from other countries.

The export of onions from India has been subject to various regulatory measures aimed at stabilizing domestic prices and ensuring adequate supply in the domestic market. In August, the government imposed a 40 percent duty on onion exports to curb price inflation and enhance domestic availability. Additionally, a Minimum Export Price (MEP) of USD 800 per tonne was set for onion exports, effective from October 29.

Notably, the export duty exemption was granted for ‘Bangalore rose onion,’ a specific variety with a Geographical Indication (GI) tag, subject to certification from the Horticulture Commissioner, Government of Karnataka.

In response to rising onion prices, the Indian government has been releasing onions from its buffer stock. The buffer stock, maintained to address supply shortages and stabilize prices during lean seasons, has been expanded to 300,000 tonnes for the 2023-24 season, up from 251,000 tonnes in the previous season.

Furthermore, procurement of rabi onions for the 2024-25 season commenced earlier than usual, with a target of procuring 500,000 tonnes during the rabi season. Rabi onions, harvested from April to June, constitute a significant portion of India’s onion production and play a crucial role in meeting domestic demand until the Kharif crop is harvested later in the year.

India’s decision to permit limited onion exports to the UAE and Sri Lanka reflects a delicate balancing act aimed at managing domestic supply, stabilizing prices, and meeting international obligations amidst challenging market conditions. As the government continues to monitor onion availability and demand dynamics, regulatory measures will likely remain a key tool in ensuring food security and price stability in the domestic market.

India’s Policy Response

As India grapples with the intricacies of onion exports amidst domestic demand fluctuations and international market dynamics, the recent policy measures underscore the complexities inherent in managing agricultural trade. The decision to allow limited onion exports to the UAE and Sri Lanka while extending the ban domestically reflects India’s nuanced approach towards balancing conflicting interests of ensuring domestic availability and meeting international obligations.

The authorization of onion exports to specific destinations comes against the backdrop of stringent export regulations aimed at stabilizing domestic prices and safeguarding food security. The extension of the export ban until further notice highlights the government’s cautious approach in managing onion supplies amid uncertainties in production and consumption patterns.

India’s onion export policies have been subject to periodic revisions and adjustments in response to changing market conditions and socio-economic imperatives. The imposition of export duties and Minimum Export Prices (MEP) aims to curb speculative trading and ensure fair pricing in the domestic market. Additionally, exemptions for specific varieties like ‘Bangalore rose onion’ underscore the recognition of geographical indications and the promotion of niche agricultural products.

The role of buffer stocks in mitigating supply shortages and price volatility cannot be overstated. The expansion of buffer stock levels for the 2023-24 season reflects the government’s proactive stance in enhancing food security and stabilizing prices during lean periods. Moreover, the early procurement of rabi onions for the 2024-25 season signifies strategic planning to preempt potential supply disruptions and mitigate market uncertainties.

India’s approach towards onion exports encapsulates broader policy objectives of promoting agricultural sustainability, enhancing farmer livelihoods, and ensuring food security. By striking a delicate balance between domestic imperatives and international commitments, the government aims to foster a resilient agricultural sector capable of meeting diverse challenges and opportunities.

However, the efficacy of export regulations and buffer stock management hinges on effective implementation and monitoring mechanisms. Timely interventions, informed by real-time data and market intelligence, are essential to mitigate risks and capitalize on emerging opportunities in agricultural trade.

Moving forward, India’s onion export policies are likely to evolve in response to changing global market dynamics, climatic conditions, and technological advancements. Embracing digital solutions and supply chain innovations can enhance transparency, efficiency, and resilience in agricultural trade, thereby bolstering India’s position as a reliable supplier in the global marketplace.

Overall, India’s management of onion exports reflects a multifaceted approach that seeks to reconcile competing priorities of domestic food security and international trade obligations. While challenges persist, proactive policy measures, supported by robust institutional frameworks and stakeholder engagement, are critical in navigating the complexities of agricultural trade and fostering sustainable development. As India continues to navigate the intricacies of onion export management, the emphasis remains on fostering resilience, inclusivity, and innovation across the agricultural value chain to ensure the long-term prosperity of farmers and consumers alike.

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Agriculture

Govt starts buying chana from farmers at minimum price, assures stable production

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The Central government has given its nod for the procurement of 1.39 lakh tonnes of Bengal gram (chana) from Karnataka during the 2023-24 rabi season under the Price Support Scheme (PSS), announced Union Minister Shobha Karandlaje on Thursday. Additionally, the Centre has disbursed the third instalment of Rs 235.14 crore under the Rashtriya Krishi Vikas Yojana (RKVY) to the Karnataka government for the fiscal year 2023-24. According to an official statement, the Agriculture Ministry’s approval for the procurement of Bengal gram in Karnataka under the PSS comes at a Minimum Support Price (MSP) of Rs 5,440 per quintal, with a maximum quantity of 1,39,740 tonnes earmarked for the Rabi season 2023-24.

In her remarks, Minister Karandlaje outlined that the released funds under the RKVY scheme will be allocated for various components aimed at bolstering agricultural infrastructure in the state. These components include the construction of godowns, water harvesting structures, primary demonstration units, procurement of agricultural machinery such as tractors, power tillers, and drones, as well as initiatives promoting integrated farming and soil health fertility.

Moreover, Minister Karandlaje highlighted that an additional allocation of Rs 178.65 crore was sanctioned to Karnataka on January 25 under the RKVY scheme. Consequently, the total allocation for the state under the RKVY scheme for the fiscal year 2023- 24 has been revised to Rs 761.89 crore, reflecting an increase from the initial allocation of Rs 583.24 crore. The statement further revealed that out of the total allocated amount, Rs 526.75 crore has been disbursed by the Centre thus far, with the remaining balance slated for release upon the utilization of the previously released funds by the state government.

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Economic

India’s food processing sector set to surge, eyes USD 535 billion by 2025-26

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Anita Praveen, the Secretary of the Ministry of Food Processing, emphasized the pivotal role of research and development (R&D) in propelling India’s food processing sector to greater heights. Speaking at the FICCI Scientific Symposium on ‘Processed Foods for Purpose,’ Praveen highlighted the sector’s significant potential for growth and its status as a priority area within India’s agricultural landscape.

Praveen stated, “The Indian agriculture sector is witnessing robust growth with record levels of production, and the Food Processing sector has become one of the priority sectors for growth.” She added, “We have already reached high levels of growth with the resources we have. There is a need now for the food processing sector with R&D as a focus for taking the sector to the next level.”

She underscored the pivotal role of the food processing sector in driving economic growth and generating employment opportunities, particularly for micro and small enterprises. “Food processing sector is one of the large investment generators, particularly for the micro and small sector, and has the potential to bring more private investments,” said Praveen. “With the resources at our disposal, we have achieved substantial growth. Now, the focus must shift towards leveraging R&D to propel the sector to new heights,” she remarked.

The Secretary outlined the strategic advantages of the food processing industry, citing abundant availability of raw materials at competitive prices and burgeoning consumer demand both domestically and internationally. “This sector has advantages of high raw materials availability at cheaper prices, high consumer demands both in domestic and international markets. This is the time to give a push to the food processing industry,” Praveen said.

Praveen also addressed the pressing issue of food wastage, emphasizing the need for comprehensive waste management strategies at every stage, from farm to fork. She stressed the importance of direct engagement between industry players, farmers, and micro-level processing units to enhance efficiency and minimize wastage.

“The time is right to bring these micro units and link them with large industries. The downward linkage approach will be advantageous for large industries to control quality, maintain standards, and have a sustained supply chain,” she added. “The industry should focus on educating the consumer, and we must adopt a balanced approach to this educational initiative. Consumers must know what they are consuming, and quality food production is the responsibility of the industry,” she added.

To boost exports, Praveen advocated for closer collaboration between large industries and smaller units, emphasizing the importance of quality control and maintaining robust supply chains. She highlighted the industry’s responsibility in consumer education, advocating for transparency and a balanced approach to fostering awareness about food quality and safety.

Siraj Hussain, Advisor to the FICCI Food Processing Committee and Former Secretary of the Ministry of Food Processing Industries, echoed Praveen’s sentiments, emphasizing the critical role of food processing in ensuring food safety and nutrition. “Food processing serves as a critical link between farm and fork. It acts as a catalyst for economic growth, generating employment opportunities and driving innovation across the food sector. The role of food processing in providing safe, healthy, and nutritious food has now taken center stage,” Hussain said. He underscored the sector’s potential as a driver of economic growth and innovation.

Sanjay Khajuria, president of CIFTI-FICCI and director, Corporate Affairs at Nestle India Ltd, hailed food processing as a ‘sunrise sector,’ lauding its progress in modernization and sustainable economic growth. “Food Processing sector is considered a sunrise sector and has achieved notable progress in terms of modernization and sustainable economic growth in recent years,” he said.

Dr. Seema Bathla, professor at the Centre for the Study of Regional Development, Jawaharlal Nehru University, highlighted the four key elements of the Indian agriculture food system: production, consumption, ecology, and environment. “The Indian agriculture food system has four key elements which include production, consumption, ecology, and environment,” she said.

With projections indicating an upward trend, India’s food processing sector’s output is expected to soar more than USD 600 billion by the fiscal year 2025-26.

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Agriculture

India set to halt urea imports by end of 2025, says Mansukh Mandaviya

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Minister Mandaviya underscores India’s shift towards promoting alternative fertilisers for enhanced crop and soil health, alongside ensuring fertiliser availability in agriculture.

In a significant move towards bolstering domestic manufacturing and agricultural self-reliance, India is poised to halt urea imports by the end of 2025. Chemicals and Fertilisers Minister Mansukh Mandaviya announced this milestone, attributing it to a concerted push for domestic production, which has effectively bridged the gap between supply and demand.

Highlighting the pivotal role of fertilisers in Indian agriculture, Minister Mandaviya emphasized the government’s commitment to ensuring their availability. He noted that India has relied on chemical fertilisers for over six decades to augment crop production. However, in recent years, there has been a concerted effort to promote alternative fertilisers such as nano liquid urea and nano liquid di-ammonium phosphate (DAP), citing their benefits for crop and soil health.

Addressing concerns regarding achieving urea self-sufficiency, Mandaviya outlined the government’s dual strategy of reviving closed urea plants and expanding production capacities. He noted a substantial increase in domestic production capacities from 22.5 million tonnes in 2014-15 to around 31 million tonnes presently. Despite this progress, there remains a shortfall of approximately 4 million tonnes annually.

To address this gap, Mandaviya revealed plans to commission additional production facilities, aiming to reach an annual capacity of around 32.5 million tonnes. Moreover, the government aims to substitute 2-2.5 million tonnes of conventional urea with nano liquid urea, further bolstering domestic production.

The Minister expressed confidence in achieving the target by the end of 2025, effectively eliminating the need for urea imports and reducing the import bill to zero. Import figures have already shown a declining trend, dropping from 9.136 million tonnes in 2021-22 to 7.58 million tonnes in 2022-23.

Over the past decade, the government has prioritized ensuring an adequate supply of fertilisers while shielding farmers from volatile global prices through increased subsidies. Notably, the fertiliser subsidy for the fiscal year 2024-25 stands at Rs 1.64 trillion, demonstrating the government’s commitment to supporting agricultural productivity.

The transition to alternative fertilisers has gained momentum, with nano liquid urea witnessing increased demand. Cooperative organization IFFCO’s initiative in launching nano urea has been instrumental in this shift, with 70 million bottles sold between August 2021 and February 2024. Additionally, schemes like ‘PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth’ (PM-PRANAM) incentivize the adoption of alternative fertilisers and balanced usage of chemical fertilisers.

Underpinning these efforts are subsidy schemes like the Urea Subsidy Scheme (USS) and the Nutrient Based Subsidy Policy, ensuring affordability and accessibility of fertilisers for farmers. While urea imports are managed by the government, other fertilisers are imported under commercially viable terms.

With these strategic initiatives, India is on course to achieve urea self-sufficiency by 2025, marking a significant milestone in its agricultural journey towards self-reliance and sustainability.

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Agriculture

Right practices can boost average mustard yields by 35 per cent: SEA Study

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The average mustard yield can jump by 35 per cent over five years even with the currently available seeds if the ideal agronomic practices are adopted, a study conducted by the Solvent Extractors Association of India (SEA) has found, amid a raging debate over the yield potential of genetically modified mustard against the existing varieties. SEA, the premier association of domestic oilseed extractors, conducted the pilot project in association with Solidaridad Network, an international civil society organisation working to facilitate the development of socially responsible, ecologically sound and profitable supply chains. Started in 2020-21 with 400 farms in five districts of Rajasthan, the project was gradually scaled up to cover other major mustard-producing states. It was conducted in around 3,500 model farms spread across five states involving more than 125,000 farmers.

The study found a 35 per cent increase in the average yield of mustard over five years from 1,787 kilogrammes to 2,414.8 kilogrammes in the model farms as compared to the regular ones. “The mustard model farms had implemented various strategies to achieve this target focusing primarily on enhancing mustard yields through innovative farming practices, advanced technological adoption and comprehensive farmer support programmes,” SEA said in a statement. “The yield increases were realised using the currently available seeds and no genetically modified (GM) seed was used in the process,” BV Mehta, executive director of SEA, told Business Standard. Apart from techno-economic inputs under the project; farmers were also trained through unique Farmers Field Schools (FFS) at the block level.

“These FFS acted as strong community institutions where farmers shared their learnings,” the statement said. The SEA analysis showed that mustard is an ideal crop for low monsoon and less irrigated areas as it offers higher returns with a low cost of production and less water. A growth in mustard seed yield could also contribute to reducing India’s import dependency on edible oils. Currently, India imports around 60 per cent of its annual edible oil requirements. According to the SEA, in 2022-23 (November to October) India imported around 16.47 million tonnes of edible oils valued at around Rs 138,000 crore. “It amplifies the need for self-sufficiency in edible oil production to mitigate the impact,” SEA said.

India’s mustard seed production has grown from 8.6 million tonnes in 2020-21 to 11.35 million tonnes in 2022-23 while the area under the crop has risen from 6.70 million hectares in 2020- 21 to 8.80 million hectares in 2022-23. “The production of mustard seed is projected to reach an all-time high of 12 million tonnes in the current 2023-24 (Nov-Oct) season with sowing area at a record 10 million hectares,” the SEA said.

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Economic

Kalanamak rice exports get boost as Govt waives duty on 1,000 tonnes

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The removal of the hefty 20% duty on overseas exports marks a significant shift in the government’s trade policy regarding Kalanamak rice.

In a significant move aimed at promoting trade of agricultural commodities, the government has lifted the duty on exports of the Kalanamak variety of rice. This exemption applies to shipments of up to 1,000 tonnes and is effective immediately from Wednesday, according to a notification issued by the Finance Ministry.

Previously subject to a hefty 20% duty on overseas exports, the removal of this tariff barrier marks a notable shift in the government’s trade policy concerning Kalanamak rice. The Directorate General of Foreign Trade (DGFT) paved the way for this initiative on Tuesday by authorizing exports of up to 1,000 tonnes of Kalanamak rice through six specified customs stations.

Kalanamak rice, a type of non-basmati rice renowned for its distinct aroma and taste, was previously prohibited for export. However, with this recent decision, it joins the ranks of exportable agricultural commodities, offering new avenues for Indian rice producers to tap into international markets.

Exporters can now utilize six designated customs stations for shipping Kalanamak rice abroad. These include Varanasi Air Cargo, JNCH (Jawaharlal Nehru Customs House) in Maharashtra, CH (Customs House) Kandla in Gujarat, LCS (Land Customs Station) Nepalgunj Road, LCS Sonauli, and LCS Barhni.

The government’s move to facilitate the export of Kalanamak rice underscores its commitment to boosting agricultural exports and diversifying the country’s trade portfolio. This decision is likely to open up new opportunities for farmers and exporters, while also enhancing India’s presence in the global rice market.

This strategic decision by the government comes amidst efforts to bolster India’s agricultural sector and enhance its competitiveness in the global market. Kalanamak rice, with its unique characteristics and cultural significance, holds immense potential for export growth. By lifting the duty on its overseas shipments, the government aims to capitalize on this potential and support the livelihoods of farmers involved in its cultivation.

Furthermore, the exemption of duty on Kalanamak rice exports aligns with the broader agenda of promoting agricultural trade and achieving the goals outlined in various government initiatives such as the Agricultural Export Policy and Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission). Encouraging exports of agricultural products not only contributes to economic growth but also fosters rural development and empowers farmers by providing them access to international markets.

As India strives to become a global powerhouse in agriculture, initiatives like these play a crucial role in strengthening the country’s position as a reliable supplier of high-quality agricultural commodities. Moreover, by tapping into niche markets with unique products like Kalanamak rice, India can carve out a niche for itself and establish a reputation for excellence in agricultural exports.

In conclusion, the removal of duty on Kalanamak rice exports signifies a significant step towards realizing the full export potential of India’s agricultural produce. It reflects the government’s commitment to fostering a conducive environment for agricultural trade and underscores its resolve to empower farmers and bolster rural economies. This move is poised to not only boost India’s export earnings but also enhance its stature as a key player in the global agricultural arena.

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