Impact of corona virus on agriculture products export and import

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It’s been complete one week since India is lockdown. On Sunday, 22nd March, we observed one day lock down requested by the Prime minister of India and on Monday, 23rd March the Prime Minister announced lock down till April 24. All the businesses had been closed, the produce centre where the farmers being the produce are closed, the movement of transportation is very limited, banks are operating with minimal 10% to 15% of the attendance, all the offices in India are closed, ports are working with minimum support staff. Only major grocery stores in India are open supplying goods and services of basic needs of day to day life like medicine, vegetables, fruits and essential commodities.

Due to this lock down majority of the retail suppliers, the shops and the stores may run out of the supplies of pulses and other essential commodities very soon.

From last 2 years most of the big wholesalers were keeping their minimal stock as per the requirement only, Due to the sudden demand because of lockdown most of the consumers who can afford to purchase the requirements have purchased minimum one month of the groceries this has created a panic demand wave across the India.

We have seen after many years historical demand across the counter at major wholesale market in India for all kinds of food grains pulses and necessary commodities.

Also due to fear of corona virus we expect more people will be consuming healthy, protein rich ,vegetarian food which will include pulses, lentils and more vegetables and fruits, which will cause shift of minimum 10% population consuming egg, chicken, meat, fish and other non vegetarian products to consume more and more vegetarian healthy food. For instance now in India you can buy chicken for less them 1 US dollar per kg, it’s a big disaster specially for the feed industry and for those involved in production of by products which are either being consumed by poultry & feed industry.

There is a big issue for the companies involved in the exports of agriculture products. As the products are normally perishable in nature and have limited shelf life.

Due to very limited operations across the supply chain, & documents processing channel (custom house ,shipping department ,and the banks), those consignments which are exported just a week or 10 days before the lockdown are facing major issues. Documents need to be processed in time, and presented at the counters for negotiation. majority of international flights are closed and there is a very big question how this documents will be negotiated at the counters of the buyers bank. If we leave couple of developed countries like USA and few other, majority of countries do not have facility of release of the cargo on the scan copy. The short duration transit like Sri Lanka /Singapore/ Malaysia /Dubai /Egypt Turkey where the vessels reach within a day or 10 days has big problem.

Those contracts which are due to be executed in month of April are now facing a force major issue. Since the entire supply chain is blocked nobody from India knows when the operations will be resumed. What level the farmers will supply the goods, what will be the availability of the vessels and suppose after a delay of a month or 45 days if the cargo is shipped ,do the buyers and their market will require this product. as per the experience once the holy month of Ramzaan starts the demand for the product is reduced big way.

If the market in India get firm due to exuberant domestic demand there will be much more delay for the buyers to get out their cargo shiped, If Indian farmers bring all the produce in a very short span of time because of their requirement of money market can see a big downfall. In these situations both the buyers and sellers will have big issues.

Requesting everyone to treat the Situation with care and maturity. Without spoiling relationship with buyer or seller, because no one was well prepared for this unexpected situation.

Report by:
Mr. Sanndip Goyal
Ganesh Agro

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