December 15, 2010

US Grains Council recognises India's potential and challenges

The US Grains Council's (USGC) latest look at India illustrates both long-term export potential and constraints on grain sales.

"A middle class of 100 million that is growing in size and income represents a huge future demand for meat, milk and eggs," said Erick Erickson, USGC special assistant for planning, evaluation and projects.

Erickson reported that India's private broiler industry and commercial dairy industry are growing by 12-13% annually.

India's agriculture and food systems are responding in significant ways to the country's economic growth and over time, that may offer opportunities to trade partners.

"India has the possibility of increasing its own corn production, but limits on land and holdings suggest that within the next decade they could become a consistent, major importer," he said.

As the USGC looks to increase efforts in India, its approach will be to help the poultry and dairy sectors with their own development agendas.

By becoming a trusted, credible partner, the Council will be in a position to help when the Indian industries are ready to take on policies that restrict corn imports, and those sectors will be better organised to work together on issues of common interest.

"This capacity-building takes time," Erickson said, noting for comparison that the Council began working in China in 1983, and China is now becoming a regular importer of corn.

"We have been involved in India since the mid-'90s, but there is a new impetus to our work now. As India's economy is growing rapidly and it is a more open society, changes in India's market dynamics should happen more rapidly than in China," he said.

According to the Council, if India's economy continues to grow as it has in the last decade, it will need soyoil, distillers grains and perhaps corn in three to five years.