India – Growth & Demand Agriculture Growth & Demand, … · 2010-02-11 · • India’s GDP at...
Transcript of India – Growth & Demand Agriculture Growth & Demand, … · 2010-02-11 · • India’s GDP at...
India – Growth & Demand Agriculture India – Growth & Demand, Agriculture Focus - Oilseeds & Pulses
Sanjeev Asthana
Presentation FlowPresentation Flow
I di D d Sid E ti• India Demand Side Equation– Economy and Growth Momentum
• India Food & Agriculture– Production
Ch ll– Challenges
• Oilseeds
• Pulses
• Opportunity Scan
Diversity
• 29 States + 6 Union Territories– Within each state, diversity in
customs and traditions
• 22 official languages and 1600 minor languages and dialects
• 70% population lives in 600,000 + villages ( < 20,000 population)villages ( 20,000 population)– However, accounts for more than
half of sale of many FMCG and Consumer Durable productsConsumer Durable products
India is growingSource: Economist
• India will be the third largest economy by 2040India will be the third largest economy by 2040(Source: The Economist, IMF and Goldman Sachs)
• India’s GDP at current prices is estimated to be US$ 1721 billion by 2015(Source: Goldman Sachs)
Household Incomes Increasing
• Household incomes in India to cross Rs 150,000 by 2010
Incomes-Changing Profile
• Emerging niche tier 3 cities are richer than most tier 1 and 2 cities
Young Population
(Source: UN)
• India has a demographic advantage with a large young population– More than 85% population estimated aged less than 65 in 2050
Most Attractive Retail Market…
Source:Source: AT Kearney Global Retail Development Index (GRDI)
India’s retail market has grown by 10% on average for past 5 years…steadily rising to top position in GRDI…steadily rising to top position in GRDI
Consumer Market Growing
• India will be 5th largest consumer market by 2025
Consumption Growing
• India’s aggregate consumption will quadruple by 2025
Consumption Shifting
• Consumption is shifting from necessities to discretionary spending
Food is the Largest Category
• Food, Beverages and Tobacco will remain the largest category– Estimated at Rs 17.3 trillion by 2025
Consumer Preferences Evolving
• From traditional to… … modernized traditional
• From globalize to… … Indianise
• From functional to… … lifestyle
Part 2
Indian AgricultureIndian Agriculture
Indian Agriculture – Snapshot
FisheriesAll 15 major climates of the World are present in
We are a large producer and consumer of food
MilkLargest Producer
91 Mn T Cattle / buffaloesLargest in the world
283 million
Marine: 2.7 Mn TInland : 3.1 Mn T
All 15 major climates of the World are present in India
52% of total land is cultivable as against world average of 11%
India is a multi crop country unlike major ag
F & V#2 in the world
129 Mn TFruits and Vegetables• 41% of mango
India is a multi crop country unlike major ag economies
Food Grains#2 in the world
TeaLargest Producer
• 41% of mango• 23% of Banana• 24 % of cashew nut• 10% of onion• 30% of cauliflower
36% f G P (218 Mn T) (0.85 Mn T)
Goat & Sheep182 million
• 36% of Green Peas.
Meat and Poultry• 53% of world’s buffalo• 17% of goat
Sugarcane# 2 in the world
(245 Mn T)
g• Fifth in world egg production
Cereals• Largest Producer of Pulses• Second largest producer of Food grains
Source: FAO / NHB / Department of Animal HusbandrySecond largest producer of Food grains
• Second largest producer of Sugarcane
Supply-Demand Gap - Selected Foods
Unit – Million Metric Tonnes
Source: ICRIER, Surabhi Mittal, Working Paper No-209
E i F d d fi it i ll l & il d i tt fEmerging Food deficit, especially pulses & oilseeds is a matter of grave concern……
Huge dependency in veg oils & Pulses on imports g p y g p
Diversifying AgricultureDiversifying Agriculture
High value agriculture taking root over traditional cropsHigh value agriculture taking root over traditional crops
Further increase in big imports as a consequence
India Oilseeds OutlookIndia Oilseeds Outlook
India to import > 50 % of oil consumption 8 Myn
Tons (est 09-10)Tons (est 09 10)
Output 28 myn tons (3% Growth)…major species
Soy, Mustard, Peanut
Demand for oilseeds to rise around 8 %Demand for oilseeds to rise around 8 %
Ever increasing SND Gap set to increase
Deficit expected to widen 73% by 2020
Global Vs India in Oilseeds Scenario
World Oilseeds Production – 422.1 million tonnes in 2009-10
India Share in World (in %)( )Oilseeds Output : 7.4 Oilmeal Production : 6.1Vegoil Production : 5.8Vegoil import : 10
Per Capita Consumption (Kgs)World : 19.52 USA : 51.30India : 11.80 (Source:- IVPA)
Yield of Groundnut and MustardIndia : 1000 kg/haIndia : 1000 kg/ha World : 1490 kg/ha and 1630 kg/ha
Yield of Soybean and SunflowerIndia : 1103 and 604 kg per hectareIndia : 1103 and 604 kg per hectare World : 2277 kg/ha and 1225 kg/ha
Vegetable Oil Consumption
15Million Tons +3.8% (0.5 mt)
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O h R d P l S bOther Rapeseed Palm Soybean
India vegetable oil consumption maintained despite high prices through reduced import dutiesg p g p
Source: Keith Menzie, World Agricultural Outlook Board, October 15, 2008
Veg Oil Import in IndiaVeg Oil Import in India
• Veg oil imports grew 79 % to 5.82 Myn Tons (08-09)
• Significantly higher imports est 8 Myn Tons (09-10)
• Palm products has nearly 4/5th of import share
• Zero duty on imports are a major driver for imports
India Pulses SituationIndia Pulses Situation
– Largest Producer Consumer & Importer of PulsesLargest Producer, Consumer & Importer of Pulses
– Stagnant Supply – No Substantial Increase in Last 20 Years
– Highly Unorganized & Fragmented Industry
– Per Capital Availability declined from 27.3 kg/yr in 1958-59 to 12.7kg/yr in current year….nutrition deficiency
– Major imports from Canada (40%), Myanmar (27%), Australia (9%)
– Demand set to rise from 18.3 MMT in 09-10 to around 19.9 MMT
Global versus Indian Production - Pulses
• World Production of Pulses (2007) 61.33 MMT
• Indian Production (2007-08) 15.11 MMT
• Indian Production (2009-10) 14.86 MMT
• India’s Share in World Area 33 %• India’s Share in World Area 33 %
• India’s share in world Production 24 %
• Total Consumption 17-18 MMT
• Imports (2007) 2 26 MMTImports (2007) 2.26 MMT
Production of Major Pulses in India
Source: Agriwatch
LentilPigeon Pea BengalGram
BlackGram
GreenGram
Source: Agriwatch
Big Concerns Today
Stagnant production and higher demand of pulses and
g y
oilseeds
Nutritional Security…….Declining per capitaconsumption
Food Inflation….and it’s wide ramification
Supply side equation in production
Technology and methods out of step low yieldsTechnology and methods out of step ….low yields
Low investments in agriculture…..virtual collapse ofinfrastructure
The sub par quality and reach of credit flow
Opportunity (1/2)Opportunity (1/2)
• Food Imports & DistributionFood Imports & Distribution
• Infrastructure Development…Warehousing, Logisticsp g, g
• Processing Investments…..Rapid Consolidation in Veg Oils & Highly Fragmented Pulses
P d t I ti & P k i• Product Innovation & Packaging
Agriculture Distribution Infrastructure and Services• Agriculture Distribution, Infrastructure and Services
Opportunity (2/2)Opportunity (2/2)
Lib l FDI R i• Liberal FDI Regime
• Huge Resource Allocation and Investments in Rural• Huge Resource Allocation and Investments in Rural Development, Agriculture and Services at Farm level
• Momentum with Players putting “Foot in the Door”….. Eg Cargill, Bunge, Dreyfuss
• Australian companies have a strategic fit and necessary it l I t ll t l d fi i l t l j lcapital…Intellectual and financial to play a major role
Th k Y !Thank You!