Agri-Commodities trade has been an integral part of Indian culture and economy since ancient times, with the country’s merchants trading across continents in everything from spices to silk to gems and metals. Today, India’s agricultural sector is one of the most important parts of its thriving economy, accounting for about 14% of the country’s GDP in 2015. Here are 5 amazing facts about Agri-Commodities Trade in India that you need to know!
1) Where trade stands today
According to a recently released report by UNCTAD, global trade in agricultural commodities increased by more than 20% between 2013 and 2014. Now, India ranks third in the global exports of agricultural commodities, behind only the US and Brazil. The agricultural sector accounts for almost 15% of India’s GDP, but unfortunately, only 18% of Indians derive their income from agriculture. Because other sectors such as manufacturing are growing at an accelerated rate, there has been a dearth of job opportunities in rural areas—which has forced many rural laborers to migrate to urban centers for work.
2) Recent developments
In 2016, India recorded a 30% increase in its agri-trading, which accounts for 11% of its GDP. Three years prior, however, production was on a decline. One reason for that, as stated by The Economist, was farmers’ switching from cultivating staples like rice and wheat to crops like oilseeds and cotton, which fetch higher prices but aren’t always sustainable on small landholdings. Aside from basic research into what farmers in your country tend to grow and how they market those products—not just during harvest season but throughout all parts of their cycle—you might want to consider getting industry knowledge through trade groups or educational resources that cover everything from best practices for exports to local and international laws regarding agricultural trading.
3) Surging Demand for Indian Agri-Products Abroad
In India, there are over 6.5 million agricultural producers and more than 900,000 traders. The concentration of the agricultural markets in top-tier cities (Delhi, Mumbai, Kolkata) has declined while regional markets have improved in their share of overall transactions. Agriculture has shown a consistent growth rate of 11.21% during 2018-21. In 2021-2022, the agriculture sector expanded by 4% which was mainly due to higher production of food grains and other cash crops like cotton and sugarcane. This indicates that India is becoming an agrarian economy with the number of farmers increasing on a regular basis which will ultimately lead to an increase in agriculture activities across India, especially in rural areas including agri-based business development & trading activities
4) Increasing number of producers and traders
According to trade reports, over 100,000 agricultural commodity trading firms operate in India, with tens of thousands more expected to enter in coming years. The number of farmers involved in the agri-commodity trade has also increased by around 20% since 2010. With a growing number of Indian businesses becoming involved in agri-commodity trade, exports have increased each year since 2012. As there continues to be massive potential for growth and development, an increasing number of firms will continue trading agricultural commodities and helping to drive strong growth numbers.
5) What lies ahead
Agriculture has been a primary source of employment in India and will continue to be. However, agricultural commodities trading remains relatively undeveloped in India. There are several reasons, including fragmented market structures and high transaction costs. In spite of these challenges, Indian agriculture looks poised for tremendous growth. To get there, we need to increase transparency across the supply chain; reduce transaction costs; and boost smallholder farmers’ incomes. India’s agri-trading market is beginning to see some promising developments. As new laws come into effect, we could see a radical transformation in agricultural markets as investors look to tap into new opportunities arising from increased transparency and better access to capital.
How Agri Exporters Are Expanding Their Business Internationally
Agri exporters are expanding their business internationally because of the demand for their products. The world is becoming more aware of the benefits of eating healthier food and the availability of healthy food has increased.
Agri exporters have a great advantage over other businesses in that they can offer their customers a wide range of products at an affordable price. A number of Agri exporters are now looking to expand their business overseas, which will allow them to market their products in other parts of the world.
The first step in expanding your business internationally is to decide on which country you want to sell your products in and then find out how much it costs to get started in that country. It’s important not only to consider the cost but also what it will take to source raw materials from that country since you’ll need them if you plan on setting up a plant there.
Once you have set up everything, Tradologie.com comes into the role. However, Tradologie.com is playing a vital role for agri-commodity exporters to expand their business globally by facilitating them an opportunity to showcase their Agri-commodities worldwide 24/7. Amazingly, the platform has 575,000+ verified buyers and 60,000+ verified sellers from all over the world connecting them directly on a single platform. Sellers can negotiate with buyers in real-time without making any calls or emails. Thanks to the reverse bidding mechanism of Tradologie.com.
And from buyers’ perspectives, buyers can buy agri-commodities in bulk online directly from 60,000+ verified sellers from all over the world. No matter how far you live.
As we have seen, Agri commodity trade accounts for a substantial portion of India’s trade by volume and value. It is, therefore, important to understand the drivers of demand and supply in the sector, which will help us decide what to do in order to achieve more efficient market outcomes for all the participants in this complex web.