New US administration seeks to increase agricultural exports to India

Amid new tariff wars, the US administration is trying to increase supplies of American agricultural products to India, with the US most interested in exporting soybeans, corn, and cotton.

 

Recall that the United States is the world's largest exporter of these goods, the total value of exports of which in 2022 amounted to $62 billion.

 

At the same time, China is the main buyer of American soybeans, cotton and corn, although it reduced soybean imports from $17.9 to $12.8 billion from 2022 to 2024, cotton from $2.9 to $1.5 billion, and corn from $5.2 billion to $328 million. In 2023, the largest buyers of American corn were Mexico and Japan.

 

In this context, a new report by the Economic Research Service of the United States Department of Agriculture (USDA) entitled “Growing Demand for Animal Products and Feed in India” is very interesting.

 

It projects that India's consumption of animal products – milk, eggs, fish and meat – will increase as its population and per capita GDP grow, which in turn will lead to increased demand for feed and, ultimately, the need to import feed ingredients, including corn and soybeans, by the 2030s.

 

It is expected that under a “rapid” income growth of 6.6% per year, domestic consumption of maize in India will increase from 34.7 million tonnes in 2022-23 to 98 million tonnes in 2040 and 200.2 million tonnes in 2050. Under a 4.6% per year income growth, domestic consumption will increase to 62.8 million tonnes in 2040 and 93 million tonnes in 2050. Soybean meal consumption will also increase from 6.2 million tonnes in 2022-23 to 30.9 million tonnes in 2040 and 68.3 million tonnes in 2050 under a “rapid” income growth scenario and to 17.7 million tonnes and 28.3 million tonnes under a “moderate” income growth scenario.

 

To meet demand in the “rapid” income growth scenario, it will be necessary to import 46 and 134 million tons of corn and 19 and 53 million tons of soybean meal in 2040 and 2050, respectively. If income growth is “moderate,” then corn imports will be 11 million tons in 2040 and 26 million tons in 2050, and soybean meal imports will be 6 million tons and 13 million tons, respectively.

 

India is currently a huge potential market for American corn and soybeans, while China is cutting imports or favoring other suppliers such as Brazil and Argentina. However, Trump's imposition of mirror tariffs on Indian exports on April 2 could complicate the situation somewhat.