BMI View: India will remain an agricultural powerhouse over our forecast period 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 s . 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.
Sugar production growth to 2019/20: 3.7% to 30.1mn 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: 31.8% to 11.9mn 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 5.1mn tonnes. Growth will be driven by 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: USD256.7bn in 2016 (up from USD244.9bn in 2015; forecast to grow annually by 6.0% on average from 2016 to 2020).
2016 real GDP growth: 7.2% (down from 7.6% 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% in 2015; forecast to average 4.4% from 2016 to 2020).
India's agricultural sector went through challenging times in 2014 and 2015, 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. We forecast the 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, tumbled in 2015 as farmers' earnings and overall confidence in the sector declined.
The outlook for production in the upcoming 2016/17 season is more positive. The summer monsoon (June-September) has started on a strong note and is forecast to come in above average. Kharif crops production including corn, rice and oilseeds will rebound, and help local supply to improve. Input sales have started picking up in Q216 and will continue to recover in the coming quarters.
However, the local wheat and sugar markets will remain tight and India will be a net importer of the two commodities in 2016. The 2016/17 wheat crop, harvested in H116, was hampered by unfavourable rainfall, while the upcoming sugar crop suffered from low water irrigation levels at the time of planting. The decrease in sugar production is benefitting Indian sugar mills as local sugar prices are rising. The outlook for sugar by-products segments, including power and ethanol, is also positive.
|India - Select Commodities Production (% chg y-o-y)|
|f = BMI forecast. Source: BMI|
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.
- 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.
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.
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.
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.
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.
The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.