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CHAP 4 Trade Flows
CHAP 4 Trade Flows
Trade Flows
60
Trade Flows
T he continuing economic crisis in most of the developed nations seemed to have severely slowed
world trade in 2011. Take the case of exports. From an impressive surge of 14.5% in 2010, world
exports (volume-wise) slipped to a modest 6.5% in the following year. Experts, including of the World
developed nations, more particularly the United States and Europe.
Box. 4.1
WTO Director-General Pascal Lamy said. “The hangover, however, from the financial
crisis is still with us. High unemployment in developed economies and sharp belt-
tightening in Europe will keep fuelling protectionist pressures. WTO Members must
continue to be vigilant and resist these pressures and to work toward opening markets
rather than closing them. “Stability” should be the name of the game for 2011”.
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4.3 The surge in 2010 was mainly contributed by Asian countries, the increase in their exports
being a whopping 23.1%, largely led by China and Japan. The US and the European Union, on the
other hand, reported a much slower growth at 15.4% and 11.4%, respectively. Imports were up
22.1% in real terms in China, 14.8% in the US, 10.0% in Japan, and 9.2% in the European Union.
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Asia and South America), meanwhile, experienced relatively low growth in volume. But
in value terms, the increase was much higher, thanks to dollar appreciation. Africa’s ex-
ports, for example, were up 6% in volume terms but 28% in dollar terms (Appendix 4.1).
Exports of all commodities from India, destination-wise, are given in Appendix 4.2. Item-wise details of
India’s foreign trade (April-December 2011) are shown in Table 4.2
Table 4.2
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Item 2010-2011 (R) 2011-12(P)
1 2 3
Exports 173.0(36.0) 217.7(25.8)
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28.3(45.3) 43.9(55.0)
Non oil exports 144.7(32.8) 173.7(20.1)
Imports 269.1 (29.8) 350.9(30.4)
75.2(22.0) 105.6(40.4)
Non oil imports 193.9(33.1) 245.3(26.5)
Trade Balance -96.1 -133.3
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4.10 The Foreign Trade Policy 2009-14 released by the Union Government reiterated the possibility of
India coming back to high export growth path of around 25% per annum. Cross-country comparison
of export performance indicated that India’s export growth was the highest among the major advanced
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International Monitory Fund showed that the value of world merchandise exports grew, on an average,
by 22.1% during April-September 2011.
4.11 Export performance of commodities like fresh vegetables, rice, poultry products, tobacco, iron
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etables exports contracted by 10.5%, rice by 37%, poultry products by 23%, tobacco by 14%, iron ore
by 23%, silk carpets by 59%, project goods by 39% and computer software by 62%. The depreciation
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Exports
4.12 India’s export earnings during 2011-12 increased to $301137 million from $251957 million in
2010-11, an increase of 19.5%. Item-wise analysis of exports for the period 2010-11 over 2009-10
showed that earnings from the export of agro products increased by 39.2%, ores and minerals by 23%
and manufactured goods 42.4%. A commodity-wise analysis of exports is shown in Table 4.4.
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' 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010- 2011-
04 05 06 07 08 09 10 11 12
Agro Products 7538 8471 10212 12675 18442 17563 17747 24696 NA
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2370 5076 6163 6998 9124 7813 8669 10660 NA
Manufactured 48525 60706 72552 84863 103032 123345 115262 164107 NA
goods
Total(including 63886 83503 103075 126276 162988 183091 178345 251957 301137
others)
24/ mber 2011
4.13 Given the on-going economic crisis in the US and Europe, which accounted for 30% of India’s
exports, the chances of demand picking up in the current year is bleak. The growth rate of exports
projected by CMIE is 19.5% for 2011-12 as against 41.3% recorded in the preceding year. In value
terms the expectation is US$ 301.1 billion.
4.14 A comparative study shows that India’s export growth had been much higher than the global
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Projection of exports and imports by CMIE for the period 2011-12 is given in Appendix 4.4. The CMIE’s
forecast shows the export from India to be 19.5% in 2011-12 (Figure 4.2).
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Imports
4.17 Imports during 2011-12 (April-December) registered a growth rate of 30.4% compared to 29.8%
in the preceding period. Though there had been a spurt in imports of petroleum, oil and lubricants,
gold & silver and machinery, certain categories of capital goods either declined or showed decelerated
growth raising concerns over the domestic investment scenario.
4.18 Higher growth in both oil and non-oil imports necessarily resulted in a wider merchandise trade
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ing period of the previous year.
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4.19 Imports during 2010-11 were valued at US$ 3,69,769 million against US$ 2,88,373 million in
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1,03,952 Million in 2010-11 registering an increase of 19.30 per cent over the previous year. Import of
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percentage of GDP stood at 23.2 per cent (provisional) in 2010-11. imports are expected to grow by a
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of commodities by share of groups/countries is given Appendix 4.6.
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' 2003-04 2004- 2005- 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
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] 20584 29832 43957 57068 79659 91456 86827 105928 143003
Non 57619 81640 105187 128014 170132 207855 200820 246346 305950
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2006- 2007- 2008- 2009- 2010- 2006- 2007-08 2008- 2009- 2010-11
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1 2 3 4 5 6 7 8 9 10 11
Coastal 15.69 14.92 9.81 12.83 12.04 28.72 36.60 38.17 42.65 48.21
Foreign 19.05 19.99 17.29 23.13 22.00 89.11 86.04 89.67 95.68 96.47
Total 34.74 34.91 27.10 35.96 34.04 117.83 122.64 127.84 138.33 144.68
4.27 South-East Asia emerged as the largest market for marine products from India accounting for a
share of 28.77% in quantity but 16.38% in value followed by European Union with 2% in quantity but
26.81% in value. In value terms China accounted for 15.33% and 19.57% in quantity. Japan” share
was 13.04% in value and 8.70% in quantity, the US 15.42% in value and 6.16% in quantity and West
Asia 5.40% in quantity and 5.19 % in value. Exports to countries like Libya, Reunion islands, Australia,
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4.28 Major importers of marine products from India and their share in value during 2010-11 is furnished
in the diagram (Fig.4.3) given below.
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squid, dried items, live items and chilled items. Details of item-wise exports of marine products from
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ing trend. In the year under report an analysis of exports of marine products from our country showed
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Exports of Marine Products from Kerala
4.30 During 2010-11, marine exports of Kerala stood at 124615 MT having a value of Rs.200210 lakh
as against 107293 MT valued at Rs.167002 lakh in 2009-10. Contribution of Kerala towards India’s
marine export in the year 2010-11 came down slightly to 15.33% from15.81% in 2009-10 in volume
and decreased in value to15.52% from 16.62 per cent of year ago period. This decreasing trend con-
tinued till 2008-09. Table 4.9 shows the export details of marine products of Kerala compared to all
India in quantity and value for years 2004-05 to 2010-11.
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uted 0.2% and 2.3% respectively. (See Table 4.10)
Table -4.10
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Cashew
4.32 India continued to be the largest producer of raw cashewnuts in the world. Production of raw nuts
in India during 2010-11 was 6,53,000 MT as against the estimated production of 6,13,000 MT during
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year 2010-11 added up to Rs. 2630 crore (US $ 577 Million)
Box: 4.2
The share of agricultural products in the total export earnings of the country during 2010-11
was 5.47% and cashew kernels ranked 9th among them contributing 4.14%. This accounted to
0.23% of the total foreign exchange earnings of the country through exports.
4.33 Total export of cashew kernels from India during 2010-11 was 91559 MT valued at Rs. 2598.15
crore (US$ 570 million) as against 108120 MT valued at Rs. 2906 crore (US$613 million) in 2009-10.
When compared to the previous year it showed a decrease of 15.32% in quantity and 11% in rupee
terms and 7.0% in US$ terms. Though the quantum of exports decreased, the average unit export
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Table 4.11
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America 34034 787.29 29415 859.22 -13.57 9.14
Europe 35820 836.06 26066 729.14 -27.23 -12.79
West Asia& Africa 34027 848.56 23160 691.33 -31.94 -18.53
South East &Far 12328 291.66 11210 280.16 -9.07 -3.94
East Asia
1750 37.12 1708 38.19 -2.40 2.88
Total 117959 2800.69 91559 2598.04 -22.38 -7.24
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There was a decrease of 13.57% in exports to American Zone.
4.35 Both in value and quantity terms Kerala’s share in cashew kernel export of India had been show-
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tribution in quantitative terms stood at 54.27% and, in value terms, at 54.55% in 2010-11. This was
57.06% and 56.29%, respectively in 2009-10 (see Table 4.12).
Table – 4.12
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Year
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der report stood at Rs.28.03 per kg as against Rs. 24.60 per kg in the previous year. Export
details of cashewnut shell liquid from India during 2009-10 and 2010-11 are furnished in
Table 4.13.
Table .4.13
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4.38 The share of Kerala in the export of cashewnut shell liquid decreased to 2717 MT during 2010-11
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at 24%. Trends in cashewnut shell liquid export from Kerala are given in the Fig 4.5 below. The major
markets of India`s export were the US, China, Korea, Japan and Indonesia. The details of export of
cashew nut shell liquid from Kerala & India are furnished in Table.4.14
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Year
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1 2 3 4 5
2004-05 6674 6.58 7474 7.91
2005-06 5834 5.97 6405 7.09
2006-07 3736 5.70 6139 10.29
2007-08 5410 7.41 7813 11.98
2008-09 2217 3.91 9099 26.06
2009-10 3079 6.65 9748 24.12
2010-11** 2717 6.30 11364 31.85
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4.39 The total raw cashewnuts imported into India during 2010-11 was 5,04,138 MT valued at
Rs.2479.75 crore against 7,52,854 MT valued at Rs. 3037.35 crore in 2009-10. (see Table 4.15). The
unit import price for raw cashew nut was Rs.49.19/kg during 2010-11 as against Rs. 40.31/kg during
the previous year.
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2006-07 322443 971.79 586044 1811.62
2007-08 372497 1071.21 605985 1746.84
2008-09 345366 1476.87 605850 2632.40
2009-10 375467 1445.24 752854 3037.35
2010-11** 215590 1010.43 504138 2479.75
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Coffee
4.40 World Coffee export was 100.08 million bags in 2009-10. Total world coffee production during
2010-11 was calculated at 133.63 million bags. Indian coffee exports in quantity terms were 297808
MT valued at Rs. 3343.33 crores in 2010-11. (See Table 4.16)
4.41 India produces only 4.5 per cent of the world’s coffee but exports 70-80 per cent of its output.
India’s export of coffee during 2011-12 (up to 31st December 2011) was calculated at 247773 MT, the
value being Rs. 3423.23 crore. Italy, Russia and Germany are the top three buyer’s of Indian coffee.
Table 4.16
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1 2 3 4 5
2004-05 211765 -13.38 1224.67 5.72
2005-06 201555 17.58 1510.38 23.33
2006-07 248991 8.58 2007.6 32.92
2007-08 218852 -20.98 2044.71 1.85
2008-09 196762 -10.44 2238.41 9.47
2009-10 196002 51.35 2070.68 -7.49
2010-11 297808 26.41 3343.33 61.46
2011-12* 247773 -- 3423.23 --
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4.42 Exports of coffee through Cochin Port during 2010-11 registered a record increase of 175.47%.
Exports went up to 84,792 MT valued Rs. 689.20 crore. During 2009-10 it was 30,781 MT having a
value of Rs. 426.52 crore.
Tea
4.43 The general macro economic trends in the world market are not conducive to promotion of tea ex-
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port of tea from India during 2010-11 decreased to 1789.27 lakh kgs from 2134.34 lakh kgs of 2009-10.
In value terms also export declined to Rs.2450.49 crore in 2010-11 from Rs.3038.69 crore in 2009-10, a
fall by 19.36%. Exports of tea from India through north Indian ports and south Indian Ports are given in
Table 4.17.
Table 4.17
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2007-08 1101.48 129117.69 751.74 59750.29 1853.22 188867.98 - -
2008-09 1063.04 156095.96 843.34 82083.37 1906.38 238179.33 2.87 26.11
2009-10 1225.88 200135.66 908.46 103733.22 2134.34 303868.88 11.96 27.58
2010-11 927.49 159541.29 861.78 85507.96 1789.27 245049.25 -16.17 -19.36
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4.46 During 2010-11, as many as 111 countries imported coir and coir products. China became the
major importer of coir and coir products in terms of quantity, its share being 26.26%. The US contin-
ued to be a prime importer in terms of value with its share of 25.46%. The European Union countries
imported 29.97% in terms of quantity and 35.74% in terms of value
Spices
4.47 Spices exports from India registered and all-time, both in quantity and value, during 2010-11. A
total of 5,25,750 MT of spices and spices products valued Rs.6840.71 crore (US$1502.85 million) was
exported against 502750 MT valued Rs.5560.50 crore (US$1173.75 million) in 2009-10, an increase
of 5% in volume and 23% in rupee. In dollar terms the increase was 28%.
4.48 During 2010-11, a total quantity of 18,850 MT of pepper valued Rs.383.19 crore was exported
as against 19,750 MT valued Rs.313.93 crore in the previous year, an increase of 22% in value. Exports
of cardamom (small) during the same added up to 1175 MT having a value of Rs.132.16 crore. In the
year under review, chilli exports from India touched an all-time high in both volume (2,40,000 MT) and
value (Rs.1535.54 crore). Chilli exports also registered an increase of 18% in quantity and 19% in value.
4.49 Exports of ginger too showed a similar trend during 2010-11, marking a hike of 186% in volume
and 159% in value as compared to 2009-10. During the same period, export of spices oils and oleo-
resins also increased to 7600 MT valued Rs. 910.62 crore from 6750 MT having value of Rs. 708.75
crore in the previous year. In 2010-11, India exported 15,250 MT of curry powder/paste valued Rs.
210.50 crore as against 14,300 MT valued Rs.189.19 crore of 2009-10.
4.50 The major markets of India’s spices exports are USA, UK, Canada, Italy, Japan, Germany, UAE,
Iran, Bangladesh and Malaysia. Item wise export of Spices from India is given in Appendix 4.12.
Spices Export from Kerala
4.51 Exports of spices through port in Kerala stood at 73,733.38 MT valued at Rs.1885.42 crore in
2010-11. When compared to the previous year, this showed an increase of 5.85% in quantity and
29.42% in value. Pepper, cardamom, chilli, ginger, turmeric, corriander, cumin, celery, fennel, garlic,
tamarind, vanila, curry power, spices oil, mint products, nutmeg and maces etc are the main items
exported through the ports of Kerala.
4.52 In the year under review Kerala exported 16,294.97 MT of pepper valued at Rs.330.61 crore as
against 16,840.65 MT valued at Rs.267.33 crore in the previous year. Kerala’s exports of pepper had
been declining since 2008-09. Even so, they represented more than 85% of India’s total exports of
pepper, both in quantity and value. In the year under review exports of cardamom fell by 18.5% and
chilli by 2%. While, ginger registered an increase, cumin decreased by 16%, fennal by 15% and fenu
greek by 6%. Exports of garlic, however, increased by 7%. So were the exports of spices oil & oleores-
ins (20%), turmeric (15 %) and coriander (4%) Item-wise export of spices through ports in Kerala from
2005-06 to 2010-11 are furnished in Appendix 4.13.