![]() However, India is a sporadic international supplier and has, in the past, prioritized the domestic market by periodically imposing export bans when domestic prices increase. A major driver of India’s exports is its sizeable stocks of cotton, in addition to very strong demand in China, which accounted for 60 percent of India’s cotton exports in 2013. India accounts for over one-third of global cotton area, and has seen very large increases in both area and production in the past decade. ![]() India is estimated to be the world’s second largest cotton exporter in 2013/14 after the United States. India Trails Only the United States in Cotton Exports Exports have also been bolstered, in the case of wheat, through direct exports by the government from government stocks at prices below acquisition and transport costs. Open market sales depress wheat prices more than rice prices due to the volume differences. Exports of these grains have grown, in part, as a result of the government release of these stocks on the domestic market, which lowers prices, making Indian supplies more competitive. These growing MSPs have contributed to expanding production and ballooning government stocks. The MSPs for wheat and rice have increased significantly over the past six years, with rice up 75 percent and wheat up 40 percent. The Indian government purchases rice and wheat directly from farmers at minimum support prices (MSPs). Soaring Government Rice and Wheat Stocks Contribute to Record Exports In addition to supporting irrigation, power, fertilizer, which boosts production for many exported crops such as cotton and sugar, the Indian government provides direct price support to wheat and rice, among other commodities. Furthermore, the new government budget recently released indicates that support is likely to reach a new record high in 2014/15 ( see IN4064). Based on official sources, FAS/New Delhi estimates that the Indian government’s total support for agriculture has grown from $68 billion in 2009/10 to $85 billion in 2013/14 ( See IN4044). One of the drivers behind India’s export growth has been the dramatic growth in government support provided to agriculture, particular for wheat and rice. India’s Exports Benefit from Government Policies and Subsidies Soybean meal, guar gum, and corn exports, however, are down from this time last year. From January-May, rice exports are up 10 percent compared to this time last year, cotton up 2 percent, bovine meat (buffalo) up 18 percent, and wheat up 75 percent. India’s exports so far in 2014 have remained roughly at last year’s record level. By comparison, Brazil’s annual exports grew 15 percent over the past decade, China’s grew 12 percent and the United States’ grew nine percent. ![]() India’s export growth over the past decade has been the highest of any country, with an annual rate of more than 21 percent. ![]()
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