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The analysis of the Indian grain market is aimed at finding up-to-date information and analyzing the market volume, consumers and competitors in the market under study, the changes that occurred in 2017-2019, as well as the forecast and trends in the industry in the long term for the period up to 2024.
Part 1. Overview of the Indian grain market
1.1. Main characteristics of the market
1.2. Dynamics of grain market volume 2016-2020 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Grain Market Life Cycle Stage
1.5. Competition from substitute products
Part 2. Competitive analysis in the grain market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of grain production
3.1. Volume and dynamics of domestic grain production
3.2. Share of exports in grain production
3.3. Segmentation of grain production by regions:
3.3.1. Production by Union Territories
3.3.2. Production by states of India
Part 4. Analysis of foreign trade deliveries of grain
4.1. Volume and dynamics of grain imports
4.2. Structure of imports by countries
4.3. The volume and dynamics of grain exports
4.4. Structure of exports by countries
Part 5. Analysis of grain consumption
5.1. Dynamics of grain consumption volume
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Forecast of grain market development until 2025
Part 9. Recommendations and conclusions
Description of the current market situation
In 2020, as in previous years, the bulk of the grain market is occupied by the cultivation of wheat; this crop accounts for almost 65% of the total grain production. In second place is barley with a total share close to 16%, in third place among cereals is oats with a share of 3,1%.
Diagram. Structure of production of grain and leguminous crops in 2020, %
The total gross harvest of grain crops in 2020 increased significantly and showed an increase of 10% compared to 2019, amounting to 133 million tons. After a sharp decline in the gross grain harvest in 2018 to 113 million tons, the market has shown a stable increase in indicators for two years in a row, thus by the end of the study period, the indicators were almost on par with the collections in 2018.
Diagram. Gross harvest of grain and leguminous crops in 2016-2020, thousand tons
Cereal revenue shows a stable growth rate over the period 2017-2020, so the strong decline in cereal production in 2018 could have been offset by the sale and disposal of 2017 inventory.
A slight decline in growth of 4,1% in 2019 did not prevent a significant increase in cereal revenue in 2020. Thus, in 2020, a record increase of 57% was noticeable and the total revenue for the year amounted to 669 million rupees.
Diagram. Proceeds (net) from the sale of cereals in India million Rs.
Considering the proceeds from the sale of grain crops by the Union Territories of India, we can say that the leaders for the period 2017-2020 are two Union Territories - these are the Central Union Territories and the North-West Union Territories. The latter for 2020 has strengthened its position and has significantly approached the market leader of the Central Union Territories, the net revenue of which amounted to 261 million rupees.
All regions added in terms of revenue in 2020, except for the Far Eastern Union Territories, the leader of the Central Union Territories showed the largest increase of 64%.
Table. Proceeds (net) from the sale of grain crops (net of value added tax, excises and other similar obligatory payments) in the union territories, million Rs.
Market development prospects
The grain market, focusing on monitoring indicators of the wheat market, strengthened in 2020, including against the backdrop of strengthening world prices for grain crops, as well as lower duties on export products and a slowdown in sales among producers.
The export duty on wheat is decreasing in the last weeks of July 2021, according to monitoring data from SovEcon. Thus, from July 28, it will drop to 31,4 US dollars per ton, which is 23% less than the duty price a month earlier.
Thus, in the short term, the main trends in the development of the grain market in India will be:
Sales of new crop grains will go at a moderately low pace, as many producers, especially in southern India, will wait for higher prices for products for more profitable sales of grain crops.
Demand for grain in the domestic market will remain high throughout 2021. A shift in consumer preferences towards essential products and an increase in the number of farm animals will help maintain high demand in the domestic market.
In the current 2021, farmers may lose from 15 to 20% of revenue compared to the previous year, where the revenue from the sale of grain was quite high. Despite the reduction in export duties, due to other export restrictions, the deterioration of climatic conditions and the increase in prices in the areas of logistics and the necessary measures for soil reclamation.
Experts predict that the debt burden of Indian grain producers will grow in 2021. This may happen due to low margins and a reduction in the total revenue of manufacturers.
During the pandemic, the agricultural sector, including the grain market, showed good growth during the crisis, unlike other sectors of the Indian economy. The further forecast for the development of the agricultural sector remains positive, however, grain producers are expected to face certain difficulties. This can mainly happen due to adverse weather conditions, which have weakened the technical prerequisites for further growth in this segment.
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