Capitalizing on India’s Rising Barley Exports in 2023

India has emerged as a significant global exporter of barley in recent years. However, there are still enormous opportunities for growth in barley exports from India. With smart strategies, India can consolidate its position in the global barley trade.

Barley Acreage Expanding Steadily in India

Barley cultivation in India has increased by over 65% in the last decade driven by rising exports. Barley acreage rose from 67 lakh hectares in 2010-11 to 111 lakh hectares in 2020-21. Rajasthan, Uttar Pradesh, Madhya Pradesh, Haryana and Punjab are the top barley producing states. Adoption of new barley varieties and improved agronomic practices has boosted yields too. As a result, barley production jumped from 1.57 million tonnes in 2010-11 to 2.33 million tonnes in 2020-21. Higher output has allowed larger exports. But there is potential to improve productivity further through precision agriculture.

India Emerging as Top Barley Supplier Globally

Indias barley exports have surged more than eight-fold over the past decade. Export volume rose from 1.42 lakh tonnes in 2011-12 to 13 lakh tonnes in 2021-22. Export value grew even faster from $47 million to over $600 million in the same period. A major share of exports goes to Middle East nations like Saudi Arabia, UAE and Qatar. Indias market share in their imports has expanded due to competitive prices and high quality. Having a production glut, Australia is another big market for Indian barley. Industry estimates suggest India may export 20 lakh tonnes of barley in 2023 if global demand holds firm.

Why Indian Barley is Gaining Popularity

Indian barley has gained wide acceptance worldwide due to some inherent strengths. Firstly, Indian barley contains lower moisture content than barley of other origins, which enhances storability. Secondly, uniform grain size and color attracts buyers. Thirdly, Indian barley is more cost-competitive compared to Europe and Australia. Lower domestic input and labor costs are key advantages. Fourthly, Indian exporters have made investments in storage infrastructure near ports. This aids rapid shipments and positioning for export markets. Lastly, India’s geographic location favors exports to Middle East, Africa and Asia. Proactive government support has also boosted competitiveness.

Overcoming Challenges for Higher Exports

To raise barley exports further, some critical challenges need attention. Firstly, domestic barley prices are at times higher than global rates due to export curbs. This hampers price competitiveness. Secondly, container availability issues during peak season restrict outbound logistics capacity. Thirdly, lack of long-term contracts with buyers causes demand uncertainty. Fourthly, volatility in ocean freight rates affects profitability. Lastly, quality complaints occasionally crop up due to improper post-harvest handling. Concerted efforts are vital to address these issues through supportive trade policies, infrastructure upgrades and farmer training.

The Road Ahead for Indian Policymakers

Sustaining the growth in Indias barley exports requires strategic policy interventions. Firstly, export restrictions on barley should be avoided to make pricing competitive. Secondly, production clusters may be created with high-quality seed, latest equipment and crop insurance. Thirdly, exporters can be incentivized to sign long-term supply contracts with foreign buyers. Fourthly, large storage silos can be established near ports by private sector. Fifthly, farmer awareness programs on scientific post-harvest methods are important. Sixthly, trade diplomacy can be used to gain better access to new markets. With such measures, Indias barley exports can scale greater heights.

Booming Global Demand for Barley Exports

Global demand for barley exports has seen robust growth in the past decade. According to data from the Food and Agriculture Organization (FAO), world barley trade rose from 29.2 million tonnes in 2011 to 33.4 million tonnes in 2021, reflecting an increase of 14.4% over the decade. The value of global barley exports jumped from $7.3 billion to $10.2 billion in the same period. Europe and Australia remains the top exporters, but new origins like Argentina and India gained share. Saudi Arabia was the largest barley importer worldwide with purchases of 3.8 million tonnes in 2021.

China Accelerating as Leading Growth Market

China has emerged as the leading growth market for barley exports in recent years. Chinas barley imports surged dramatically from just 143,000 tonnes in 2011 to 4.3 million tonnes in 2021 as per USDA data. This represents a staggering 29-fold increase in one decade. Chinas barley demand has risen due to the growth in malting and beer production industries. Ukraine and France increased barley exports to China to cater to this boom. Going forwards, Chinas barley imports may cross 6 million tonnes annually by 2025 based on current trajectory. This presents a lucrative opportunity for major barley exporting countries.

Competitive Prices Strengthening Import Demand

Falling barley prices globally has made imports more affordable and attractive for buyer countries. USDA data shows the average export price of barley dropped from $248/tonne in 2013 to $205/tonne in 2021. Key reasons included bumper crops in Australia and Argentina along with logistics improvements. As a result import demand rose across the Middle East, Africa and Southeast Asia. Saudi barley imports hit a record 3.8 million tonnes in 2021 aided by competitive prices. Lower barley prices versus corn also encouraged substitution in animal feed rations across markets. If global production remains strong, barley prices may moderate further and boost import appetite.

References:

https://www.fao.org/faostat/en/#data/QCL/visualize

http://www.fao.org/faostat/en/#data/TP

https://www.ers.usda.gov/data-products/feed-grains-database/feed-grains-yearbook-tables.aspx

https://www.statista.com/statistics/190225/top-10-barley-importing-countries-worldwide-2007/