India Agribusiness Report

Providing expert analysis, independent forecasts and competitive intelligence on the agribusiness industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Supply & Demand Forecasts, Commodity Price Analysis and Company Profiles.

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India Agribusiness Report
Product Price
$1,295.00

BMI View: We hold a positive view on the outlook for India 's agribusiness sector, as the country will remain an agricultural powerhouse and should be able to maintain high levels of self-sufficiency for major food crops. Production growth of various commodities will be driven by strong government support and robust demand growth for manufactured foodstuff. We see significant growth opportunities in sub-sectors such as dairy, coffee and livestock. However, India will be increasingly vulnerable to exceptional weather phenomena and serious water shortages. Moreover, the country will remain prone to erratic government interventions, which seriously hamper its reputation as an international provider.

Key Forecasts

  • Sugar production growth to 2019/20: 7.6% to 31.2mn tonnes. Inefficiencies in the pricing policy will constrain growth. Output expansion will mainly come from the liberalisation of the market, of which the first signs can be observed.

  • Palm oil consumption growth to 2020: 31.0% to 11.8mn tonnes. Domestic palm oil consumption will be propelled by strong demand for domestic food use, which makes up about 80% of total domestic palm oil demand.

  • Beef & veal production to 2019/20: 23.5% to 5.2mn tonnes. Growth will be driven by the improvements in breeding techniques, and by the robust expansion of the milk sector. Export demand for Indian beef will also support investment in the sector.

  • Agribusiness market value: USD256.4bn in 2016 (up from USD245.0bn in 2015; forecast to grow annually by 5.9% on average from 2016 to 2020).

  • 2016 real GDP growth: 7.2% (down from 7.3% expected in 2015; predicted to average 6.8% from 2016 to 2020).

  • 2016 consumer price inflation: 4.8% y-o-y ave (down from 5.1% expected in 2015; forecast to average 4.4% from 2016 to 2020).

Industry Developments

India's government, led by Narendra Modi, has made several announcements regarding agricultural reforms. However, no real tangible progress has been made so far, as the implementation of reforms will take time to unfold. Looking ahead, the government looks committed to improve India's grains marketing system, its supply chain and its agricultural infrastructure.

We continue to believe that, by implementing these reforms, particularly in the field of yields and supply chains, India has the potential to overcome lingering under-nutrition problems to become a large and, more importantly, stable exporter of a large number of commodities. Increasing yields for grains will also allow farmers to diversify their crops and increase production for other, more value-added commodities.

India's agricultural sector is going through challenging times, as the country has recorded deficient monsoons in three of the past four years. In 2015, monsoon rains were 14% below the 50-year average, and 12% below in 2014. India has also been recording dry weather over Q116. Ten states have declared drought this year, and we forecast production of a large number of commodities to decline in 2015/16, including grains, oilseeds, cotton and sugar. Sales of farm inputs, such as machinery, have tumbled, as farmers' earnings and overall confidence in the sector have declined.

The outlook for production in the upcoming 2016/17 season is more positive. India is likely to see a return of more normal weather in 2016 after two years of below-par monsoon rainfall. The probable recovery in the domestic grains and oilseeds crop will limit the imports of palm oil from H216 onwards and help exports of rice and wheat pickup.

El Nino, which was one driver of the dry weather in 2015, is in the process of waning and will dissipate in H116. La Nina - which usually brings wetter weather in South Asia - may follow El Nino, and there is now a 50% chance of the phenomenon reappearing towards Q416-H117. La Nina could bring above-average rainfall to India in 2017 if it re-emerges. Although the excess of rain may harm crops, generous rainfall is in general positive for the crop. It poses upside risks to our 2017/18 rice production estimate.

Beyond volatile rainfall levels, structural inefficiencies in the sector are also to blame behind the ongoing crisis in agriculture. The government has been supporting production and farmers since 1990s subsidising inputs such as power, water and fertiliser and by increasing the minimum support price, rather than by implementing longer term policies such as investing in infrastructure and irrigation or improving credit for smallholders.

As such, the ongoing efforts of Modi's government to revamp parts of the agriculture sector (upcoming launch of a new crop insurance scheme and creation of a National Agriculture Market) bode well for the future of the sector. In the longer term, Modi also pledges to increase water use efficiency or 'more crop per drop', restoring soil fertility and diversifying into fisheries and livestock to improve farm incomes. However, these measures are long-term solutions, which will take time to bear results. Although India could record large deficits should yields pick up, the country will remain an unstable producer of agricultural goods in the coming years.

Recovery Ahead
India - Select Commodities Production (% chg y-o-y)
f = BMI forecast. Source: BMI
BMI Industry View
7
Table: India - 2015 Summer Monsoon Rainfall & Agricultural Production By Region
8
SWOT
10
Agribusiness
10
Industry Forecast
12
Grains Outlook
12
Table: India - Grains Production & Consumption Outlook
13
Table: Risks To Outlook
13
Table: Grains Production & Consumption (India 2013-2020)
16
Rice Outlook
17
Table: India - Rice Production & Consumption Outlook
17
Table: Risks To Outlook
18
Table: Rice Production & Consumption (India 2013-2020)
20
Sugar Outlook
21
Table: India - Sugar Production & Consumption Outlook
22
Table: Risks To Outlook
22
Table: Sugar Production & Consumption (India 2013-2020)
28
Dairy Outlook
29
Table: India - Dairy Production & Consumption Outlook
30
Table: Risks To Outlook
30
Table: Dairy Production & Consumption (India 2013-2020)
35
Livestock Outlook
35
Table: India - Livestock Production & Consumption Outlook
36
Table: Risks To Outlook
37
Table: Beef Production & Consumption (India 2013-2020)
42
Palm Oil Outlook
43
Table: India - Palm Oil Production & Consumption Outlook
43
Table: Risks To Outlook
44
Table: Palm Oil Production & Consumption (India 2013-2020)
48
Coffee Outlook
49
Table: India - Coffee Production & Consumption Outlook
49
Table: Risks To Outlook
50
Table: Coffee Production & Consumption (India 2013-2020)
53
Commodity Price Analysis
54
Global Commodities Strategy
54
Table: Select Commodities - Performance And BMI Forecasts
54
Upstream Analysis
56
Asia GM Outlook
56
Table: Selected Countries - GM Crops Use (mn hectares)
59
Asia Machinery Outlook
60
Table: Select Countries - Average Size Of Farms, Hectares
63
Asia Fertiliser Outlook
65
Downstream Analysis
70
Food
70
Table: Food Consumption Indicators - Historical Data & Forecasts (India 2012-2019)
72
Confectionery
72
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (India 2012-2019)
73
Dairy
74
Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts (India 2014-2019)
75
Regional Overview
76
Table: Impact Of El Ni-o On Crops
76
Competitive Landscape
81
Table: India - Major Agribusiness Companies
81
Demographic Forecast
82
Table: Population Headline Indicators (India 1990-2025)
83
Table: Key Population Ratios (India 1990-2025)
83
Table: Urban/Rural Population & Life Expectancy (India 1990-2025)
84
Table: Population By Age Group (India 1990-2025)
84
Table: Population By Age Group % (India 1990-2025)
85
Methodology
87
Industry Forecast Methodology
87
Sector-Specific Methodology
88

The India Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's India Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

  • Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
  • Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
  • Assess the activities and market position of your competitors, partners and clients.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.

BMI Supply & Demand Forecasts

Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.

  • Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
  • Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
  • Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
  • BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.

BMI’s Commodity Price Analysis

Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.

Downstream Analysis

Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.

Featured Analysis

Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.

Competitive Landscape

The reports contain information on prominent companies operating in each market.

Key Commodities Covered By The Agribusiness Market

Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean

Please note – not all reports cover all commodities.

Sources

The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.