Due to the pandemic, trade in the country saw a hit as the central government implemented a two-month-long lockdown that disrupted the supply chain and created logical issues in March-June. It is now expected to rebound in the second half of 2020, according to analytical firm Fitch Solutions.
India was under a strict lockdown starting from March 24, which continued till May 17 to prevent the spread of Coronavirus. These measures were pulled back from June 8, despite the continuous growth of new infections.
The Fitch Solutions said the lockdown halt farm trade due to the logistic issues. Rice, Sugar, and import Oil trade completely collapsed over the month of March-June.
"We forecast trade will rebound significantly in the second half of 2020, but the total trade volumes over 2020 will be in line or below 2019 levels, due to the scale of the decline recorded in the first half of 2020," it said.
"We are expecting the demand to recover strongly in the second half of 2020 mainly due to low stocks and low international prices, but total imports over the year are likely to be lower than in 2019," it added.
Despite farm work and port, operations were deemed under essential services allowing operations to continue, disruption in transport and labor availability hit the Agri-sector hard during the lockdown, said Flitch. "These disruptions led to downside risks to 2020-21 production predictions for rice, sugar and coffee production, in particular, if individual states' lockdown measures continue or if a nationwide lockdown is reinstated," it noted.
The report adds that the dairy and livestock production sectors were also impacted as lockdown halt transport of livestock and it became hard to sell it. Besides, meat slaughtering houses also come under essential items they were open in someplace and close due to the confusion about essential tags to continue operations.
As the pandemic reduced the purchasing power around the world, cheap Indian beef and other products can attract exports as the world is suffering to revive its production sector. Particularly in South-Asian countries and Middle-East demand will surge.
