India’s farm trade may rebound in the second half of 2020, says report
India’s farm trade, which was disrupted during the COVID-19 lockdown due to logistic issues in March-June, is expected to rebound in the second half of the calendar year 2020, said analytics firm Fitch Solutions in its latest report.
The Indian government imposed a strict nationwide lockdown from March 25 to April 30, and then a partial lockdown in May to prevent the spread of the deadly contagion.
“These measures were eased in phases from June 8 despite a continued surge in domestic COVID-19 infections, in order to protect livelihoods. We note that some states will remain in lockdown beyond May, which will continue to disrupt the economy and agribusiness operations,” it said.
Other key findings:
India’s agribusiness sector is being significantly impacted by the ongoing COVID-19 pandemic
• Although farm work & port operations were allowed to continue operating under the Coronavirus-induced lockdown, the disruptions to transport and labour availability affected agribusiness production.
• Labour shortages likely constrained some plantings. However, it was difficult at the time of the report to have an accurate picture of the scale of the farm disruptions.
“These disruptions pose downside risks to our 2020/21 production forecasts for rice, sugar and coffee production, in particular, if individual states’ lockdown measures drag on or if a nationwide lockdown is reinstated,” it noted.
• The 2020-21 wheat crop was harvested before the lockdown started and India recorded a record crop, along with the 2019-20 sugar crop.
• As per the report, small meat producers are struggling as they are not able to sell their products due to transport disruptions. It will push many of them out of business in 2020.
• The ongoing pandemic adds to the key structural challenges India’s beef industry was already facing before the Coronavirus.
• The disruptions to meat production recorded in Brazil and the US and Brazil could bode well for international demand of India’s beef.
• Milk supply to consumers across India has been relatively smooth, unlike perishables.