Agricultural sector is the mainstay of the rural Indian economy around, which the socio-economic privileges and deprivations revolve, and any change in its structure is expected to have a corresponding impact on the existing pattern of social equality. The growth of India’s agriculture sector during the 50 years of independence remain impressive at 2.7 % per annum. About two-third of this production growth is aided by gains in crop productivity. The need based strategies adopted since independence and intensified after mid – sixties primarily focused on feeding the growing population and making the country self reliant in food production.
Indian agriculture has attained an impressive growth in the production of food grains that has increased around four times during the planned area of development from 51 million tons in 1950-51 to 199.1 million tonnes in 1997-98. The growth has been really striking since sixties after the production and wide spread usage of high yielding varieties of seed, fertilization, pesticides, especially in assured irrigated areas.
Exports of Agricultural products
Agricultural exports were 44 % of total exports in FY 1960; they decreased to 32 % in FY 1970, to 31 % in FY 1980, to 18.5 % in FY 1988, and to 15.3 % in FY 1993. This drop in share of agriculture in total exports was somewhat misleading because agricultural products, such as jute and cotton, which were exported in the raw form in the 1950s, have been exported as cotton yarn, fabrics, ready-made garments, coir yarn, and jute manufactures since the 1960s.
The composition of agricultural and allied products for export changed primarily due to the continuing increase of demand in the domestic market. This demand cut into the excess available for export in spite of a continuing desire, on the part of government, to shore up the invariant foreign-exchange shortage. In FY 1960, tea was the major export by value. Oil cakes, cashew kernels, tobacco, raw cotton and spices were about equal in value but were only one-eighth of the value of tea exports. By FY 1980, tea was still a major export commodity, however rice, coffee, fish, and fish products came close, followed by oil cakes, cashew kernels, and cotton. In 1992-93 fish and fish products became the main agricultural export, followed by oil meals, then cereals, and then tea. The share of fish products rose steadily from less than 2 % of all agricultural exports in FY 1960, to 10 % in FY 1980, to around 15 % for the 3-year period ending in FY 1990, and to 23 % in FY 1992. The contribution of tea in agricultural exports fell from 40 % in FY 1960 to around % percent in the FY 1988-FY 1990 period, and to only 13 % by FY 1992.
Excellent export prospects, competitive pricing of agricultural products and standards, which are internationally comparable have created enormous trade opportunities in the Indian agro industry.
AD1 500 1000 1500 2000 Billions 6 World Population Growth AD 1 to 1999 Experts differ widely in their prognosis on the timing and size the global population would peak : from a low estimate of 9 billion by 2070 to a medium of 12.5 billion and a high of 28 billion, with both the latter marks by 2150, before stabilizing. Such projections are of utmost relevance to the fertilizer industry due to the intimate linkage between food production and population growth. Million tonnes nutrients nutrients : nitrogen, phosphate and potash. There were two key set-backs during the period : 1974, as a result of the oil crisis and 1989-1993 due to the collapse in consumption in the Former Soviet Union and Central Europe. There is a major shift in consumption as well : in 1961, the developed countries accounted for 87% of the off-take. Currently, their share is only 38% and diminishing. At their peak in 1987, the developed countries consumed nearly 84 M.t. nutrients while their average over the last 5 years was some 52 M.t. nutrients. Some 70 million tonnes a year in that market have disappeared. It is indeed of interest to note that in 1961, all three major nutrients were around similar levels in off-take. While current nitrogen consumption has gained by almost 8-fold, that of phosphate and potash are only twice and double the 1961 level respectively.
Major Export Markets
Major destinations for export of Indian agricultural products (2006-07)
A decade of economic reforms has resulted in major changes in the way the Indian chemical manufacturers work and operate. Individual enterprises have realized their strengths and weaknesses and are gearing up to face the new challenges. Success stories in dyes and agrochemicals have boosted the confidence of Indian manufacturers to take on global competition squarely. Some of the advantages of Indian chemical industry include -
- Due to its low cost infrastructure, the country has huge export potential. According to a recent report, India’s chemical exports have the potential to rise US$ 300 billion by 2015. This defines an investment of US$ 50 billion in chemical industry alone.
- The country has the capacity for high value addition being close to Middle East. This is a cheap and ample source for petrochemical feedstock.
- In some categories of chemicals, India does have the advantage for exports (dyes, pharmaceuticals and agrochemicals) by establishing strategic alliances with countries like Russia. With the expertise and know-how available in the country, there is a tremendous export potential in dyestuff and agrochemical market.
- Availability and abundance of raw materials for titanium dioxide and agro-based products, such as castor oil provide an opportunity to yield significant value addition. This, however, would require substituting their exports in raw form by producing high value derivatives.
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THE DEMAND FOR UREA IN INDIA.
The demand for urea is ultimately entwined with the need for fertilizers as a whole. As the population grows, the pressure to provide adequate food and fibres intensifies. With continuous improvements in agricultural production, cereal production, for example, has clearly outpaced population growth. (Table Table 10 : Cereal Production vs Population Growth
1930 1975 1999 1999 vs 1930 % change Population 2 billion 4 billion 6 billion + 200 Wheat 127 355 584 + 360 Maize 113 324 600 + 431 Oat 64 48 25 – 61
Barley 41 150 130 + 217 Rye 47 24 20 – 57 Padi 89 360 596 + 570
Total (M.t.) 481 1261 1955 + 306 In this respect, fertilizer usage has played an important role. Various studies have shown that
between 40 to 60% of the yield increase is attributed to fertilizer application. The impressive
growth in the use of fertilizers is shown in Table 11 : Global Fertilizer Consumption
1930 1975 1999 N 1.3 43.9 85.0 P2O5 2.8 25.8 33.4 K2O 1.4 21.4 22.1 (M.t. nutrient) 5.5 91.1 140.4 Av. yield cereals t/ha 1.1 2.0 3.3 Equally important is the yield per unit area : from 1.1 t/ha to 3.3 t/ha of cereals. This has greatly alleviated the pressure for more arable land, water and other natural resources. It is of interest to note that of the three nutrients, nitrogen continues to grow from strength to strength while those of phosphate and potash have slowed down over the last two decades. There is a fundamental difference between nitrogen and the others : nitrogen will rapidly
undergo denitrification, volatilisation or leach-off while the phosphate and potash are largely
fixed or accumulated in the soils if they are not removed by the plants.
The popularity of urea goes beyond economics. For urea to be taken up, it must first be
hydrolysed to ammonia, which in turn is oxidized microbiologically to nitrite and then to
nitrate. In temperate regions, urea is used for top-dressing cereals and pasture, through at
80-85% the efficacy of AN/CAN. For rice, urea is the preferred nitrogen source, since the rice
plant is uniquely predisposed to absorb the ammonium radical. In flooded rice, under
anaerobic conditions, the nitrates are rapidly reduced to N2O and gaseous nitrogen and
hence lost to the atmosphere. Elsewhere, urea is used in virtually all crops due to its
widespread availability and competitive pricing.
The largest consumers of urea with an off-take exceeding 1 million tonnes in 1998 are shown
in Table 12. They account for well over 80% of the total off-take. The largest consumers,
China and India, have steadily built new urea capacities to avoid dependency on huge
imports. In the past, the urea market would await for the policy announcement on fertilizers
by the respective governments. The recent loss of 4 to 6 million tonnes import by China had
been largely absorbed by the market but at a price. Urea prices tumbled and the re-export of
urea by China worsened the situation.
SOURCE: Global Supply and Demand for Urea*K.G. Soh**International Fertilizer Industry Association
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