New Delhi: The fierce war between Russia and Ukraine is expected to have a huge impact on India's agriculture and food sector. MJ Khan, Agriculture Expert and President of Indian Chambers of Food and Agriculture spoke to ETV Bharat on the matter. Khan highlighted that in the year 2021, India's trade with Ukraine was about $3 billion, while with Russia it is about $11.5 billion. India exports about $500 million of the $3 billion trade with Ukraine, while importing $2.5 billion.
Reacting to the opportunity to increase exports due to the war, he adds that the possibility of better export has definitely increased but how India works in harmony with the neighbouring countries remains to be seen. "There may be initial roadblocks due to supply chain problems during the war, but after the war, India can seize the opportunity and increase exports," Khan said.
He added that with the war going forward, the demand of medicines and agrochemicals will increase. Reacting to the possibility of rising prices of edible oils in India, he added, "Russia and Ukraine together supply up to 90 per cent of sunflowers in India which will now be hindered as Ukraine is the largest producer of sunflower in the world, which produces edible oil. India will have to prepare an alternative for this."
Ukraine, he said, ranks fifth in maize production while both countries export 21 per cent of the wheat to the world and due to the disruption in the supply chain, the demand will increase in the countries which can be an opportunity for India to be a replacement supplier. "The conflict will impact the agriculture sector because there will be a problem in the import of petroleum products. Due to this, there is a danger of increasing the cost price for the farmers due to an increase in the price of diesel", said Khan.
However, experts also make it clear that due to the buffer stock, the immediate effect of the war on the market will not be visible thus currently the price of edible oils may not increase. As far as making options for future prospects is concerned, Khan says that India was moving from sunflower oil to palm oil, which is currently in high supply. Exports of palm oil from Malaysia, Indonesia and some African countries can be increased which will be taxed by India thus having an alternative arrangement and buffer stock should not have an immediate effect.
"The buffer stock of wheat in India is currently more than double the requirement which is an opportunity to boost exports amid the war news," the President of Indian Chambers of Food and Agriculture added.
Experts say that the opportunity will depend on how long the war lasts as India cannot emerge as a replacement supplier to Russia and Ukraine because there is a provision in the international agreement with the buyer that the contract can be terminated only after the delay in supply for three or six months. In that circumstance, it will not be possible for any other country to enter it, but in future, there may be an opportunity for India to meet the new demand.
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