India – Growth & Demand Agriculture India – Growth & Demand, Agriculture Focus - Oilseeds & Pulses

Sanjeev Asthana

Presentation FlowPresentation Flow

I di D d Sid E ti• India Demand Side Equation– Economy and Growth Momentum

• India Food & Agriculture– Production

Ch ll– Challenges

• Oilseeds

• Pulses

• Opportunity Scan

Diversity

• 29 States + 6 Union Territories– Within each state, diversity in

customs and traditions

• 22 official languages and 1600 minor languages and dialects

• 70% population lives in 600,000 + villages ( < 20,000 population)villages ( 20,000 population)– However, accounts for more than

half of sale of many FMCG and Consumer Durable productsConsumer Durable products

India is growingSource: Economist

• India will be the third largest economy by 2040India will be the third largest economy by 2040(Source: The Economist, IMF and Goldman Sachs)

• India’s GDP at current prices is estimated to be US$ 1721 billion by 2015(Source: Goldman Sachs)

Household Incomes Increasing

• Household incomes in India to cross Rs 150,000 by 2010

Incomes-Changing Profile

• Emerging niche tier 3 cities are richer than most tier 1 and 2 cities

Young Population

(Source: UN)

• India has a demographic advantage with a large young population– More than 85% population estimated aged less than 65 in 2050

Most Attractive Retail Market…

Source:Source: AT Kearney Global Retail Development Index (GRDI)

India’s retail market has grown by 10% on average for past 5 years…steadily rising to top position in GRDI…steadily rising to top position in GRDI

Consumer Market Growing

• India will be 5th largest consumer market by 2025

Consumption Growing

• India’s aggregate consumption will quadruple by 2025

Consumption Shifting

• Consumption is shifting from necessities to discretionary spending

Food is the Largest Category

• Food, Beverages and Tobacco will remain the largest category– Estimated at Rs 17.3 trillion by 2025

Consumer Preferences Evolving

• From traditional to… … modernized traditional

• From globalize to… … Indianise

• From functional to… … lifestyle

Part 2

Indian AgricultureIndian Agriculture

Indian Agriculture – Snapshot

FisheriesAll 15 major climates of the World are present in

We are a large producer and consumer of food

MilkLargest Producer

91 Mn T Cattle / buffaloesLargest in the world

283 million

Marine: 2.7 Mn TInland : 3.1 Mn T

All 15 major climates of the World are present in India

52% of total land is cultivable as against world average of 11%

India is a multi crop country unlike major ag

F & V#2 in the world

129 Mn TFruits and Vegetables• 41% of mango

India is a multi crop country unlike major ag economies

Food Grains#2 in the world

TeaLargest Producer

• 41% of mango• 23% of Banana• 24 % of cashew nut• 10% of onion• 30% of cauliflower

36% f G P (218 Mn T) (0.85 Mn T)

Goat & Sheep182 million

• 36% of Green Peas.

Meat and Poultry• 53% of world’s buffalo• 17% of goat

Sugarcane# 2 in the world

(245 Mn T)

g• Fifth in world egg production

Cereals• Largest Producer of Pulses• Second largest producer of Food grains

Source: FAO / NHB / Department of Animal HusbandrySecond largest producer of Food grains

• Second largest producer of Sugarcane

Supply-Demand Gap - Selected Foods

Unit – Million Metric Tonnes

Source: ICRIER, Surabhi Mittal, Working Paper No-209

E i F d d fi it i ll l & il d i tt fEmerging Food deficit, especially pulses & oilseeds is a matter of grave concern……

Huge dependency in veg oils & Pulses on imports g p y g p

Diversifying AgricultureDiversifying Agriculture

High value agriculture taking root over traditional cropsHigh value agriculture taking root over traditional crops

Further increase in big imports as a consequence

India Oilseeds OutlookIndia Oilseeds Outlook

India to import > 50 % of oil consumption 8 Myn

Tons (est 09-10)Tons (est 09 10)

Output 28 myn tons (3% Growth)…major species

Soy, Mustard, Peanut

Demand for oilseeds to rise around 8 %Demand for oilseeds to rise around 8 %

Ever increasing SND Gap set to increase

Deficit expected to widen 73% by 2020

Global Vs India in Oilseeds Scenario

World Oilseeds Production – 422.1 million tonnes in 2009-10

India Share in World (in %)( )Oilseeds Output : 7.4 Oilmeal Production : 6.1Vegoil Production : 5.8Vegoil import : 10

Per Capita Consumption (Kgs)World : 19.52 USA : 51.30India : 11.80 (Source:- IVPA)

Yield of Groundnut and MustardIndia : 1000 kg/haIndia : 1000 kg/ha World : 1490 kg/ha and 1630 kg/ha

Yield of Soybean and SunflowerIndia : 1103 and 604 kg per hectareIndia : 1103 and 604 kg per hectare World : 2277 kg/ha and 1225 kg/ha

Vegetable Oil Consumption

15Million Tons +3.8% (0.5 mt)

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O h R d P l S bOther Rapeseed Palm Soybean

India vegetable oil consumption maintained despite high prices through reduced import dutiesg p g p

Source: Keith Menzie, World Agricultural Outlook Board, October 15, 2008

Veg Oil Import in IndiaVeg Oil Import in India

• Veg oil imports grew 79 % to 5.82 Myn Tons (08-09)

• Significantly higher imports est 8 Myn Tons (09-10)

• Palm products has nearly 4/5th of import share

• Zero duty on imports are a major driver for imports

India Pulses SituationIndia Pulses Situation

– Largest Producer Consumer & Importer of PulsesLargest Producer, Consumer & Importer of Pulses

– Stagnant Supply – No Substantial Increase in Last 20 Years

– Highly Unorganized & Fragmented Industry

– Per Capital Availability declined from 27.3 kg/yr in 1958-59 to 12.7kg/yr in current year….nutrition deficiency

– Major imports from Canada (40%), Myanmar (27%), Australia (9%)

– Demand set to rise from 18.3 MMT in 09-10 to around 19.9 MMT

Global versus Indian Production - Pulses

• World Production of Pulses (2007) 61.33 MMT

• Indian Production (2007-08) 15.11 MMT

• Indian Production (2009-10) 14.86 MMT

• India’s Share in World Area 33 %• India’s Share in World Area 33 %

• India’s share in world Production 24 %

• Total Consumption 17-18 MMT

• Imports (2007) 2 26 MMTImports (2007) 2.26 MMT

Production of Major Pulses in India

Source: Agriwatch

LentilPigeon Pea BengalGram

BlackGram

GreenGram

Source: Agriwatch

Big Concerns Today

Stagnant production and higher demand of pulses and

g y

oilseeds

Nutritional Security…….Declining per capitaconsumption

Food Inflation….and it’s wide ramification

Supply side equation in production

Technology and methods out of step low yieldsTechnology and methods out of step ….low yields

Low investments in agriculture…..virtual collapse ofinfrastructure

The sub par quality and reach of credit flow

Opportunity (1/2)Opportunity (1/2)

• Food Imports & DistributionFood Imports & Distribution

• Infrastructure Development…Warehousing, Logisticsp g, g

• Processing Investments…..Rapid Consolidation in Veg Oils & Highly Fragmented Pulses

P d t I ti & P k i• Product Innovation & Packaging

Agriculture Distribution Infrastructure and Services• Agriculture Distribution, Infrastructure and Services

Opportunity (2/2)Opportunity (2/2)

Lib l FDI R i• Liberal FDI Regime

• Huge Resource Allocation and Investments in Rural• Huge Resource Allocation and Investments in Rural Development, Agriculture and Services at Farm level

• Momentum with Players putting “Foot in the Door”….. Eg Cargill, Bunge, Dreyfuss

• Australian companies have a strategic fit and necessary it l I t ll t l d fi i l t l j lcapital…Intellectual and financial to play a major role

Th k Y !Thank You!