There are approximately 1000 mills with medium to high capacity in India. These mills producing mainly wheat flour (mostly maida flour) and semolina provide services to meet corporate demands. It is stated that only 45-50 percent of the total capacity of these mills are used. Annual wheat production of Pakistan that is equal to 24-25 million tons is milled by the mills. Pakistan does not only produce flour in volumes sufficient to feed its high population, it also exports approximately 700 thousand tons of flour.
Industry and service sectors in India that is the largest third economy of the Asia continent develops, however, its agriculture sector shrinks. Estimations show that India is expected to be more influential on the global grain market in the future with the economic development and population increase, thus it will focus heavily on imports in order to meet the food demand of the growing population. Despite the abundant water resources, difficulties are experienced in connection with using the water in agricultural areas of Pakistan where wheat maintains its position as the staple food and substantial amount of rice is exported. India and Pakistan with vast geography and crowded population are among the largest ten grain producers of the world. Particularly India is among the top three countries in wheat and rice production. India that holds a high rank with respect to the consumption rate of the said grains increased the exports of these products in the recent year. Pakistan making production towards meeting the domestic demand for wheat and corn is one of the leading countries especially with the rice exports.
GENERAL ECONOMIC OUTLOOK
According to the data from T.R. Ministry of Economy, India that is located in the south of the Asia continent has a population of 1.2 billion and it is the seventh largest country in the world with respect to the size of its territories. India gained independence from the United Kingdom in 1947 and it is divided into 28 provinces and 7 union territories. Although India is remarkable with its vast territories, its natural resources are not at sufficient levels. The biggest reason of this situation is the fact that its natural resources are not capable of meeting the needs of its population of approximately 1.20 billion. In addition, large geographical diversities in the country created differences among different segments of the society with respect to economic development and distribution of the revenues. 60 percent of the working population in India are in agriculture sector. Data from the World Bank show that the rate of the farmlands is 52 percent in India where subsistence is largely dependent on the agriculture. However, the share of agriculture in the country`s economy declined in the recent years. And the share of industry and service sectors increased.
Pakistan, neighbour of Afghanistan, China and India is the sixth largest country in the world with its population of 190 million. Cotton, wheat, rice, sugar cane and corn are the primary products cultivated in Pakistan that has an economy dependent on agriculture by 20 %. According to the data from T.R. Ministry of Economy, development policies implemented by Pakistan government are not at adequate levels due to the crisis atmosphere in the international markets and certain factors in the country. Pakistan is a country that faced various problems due to long-lasting internal conflict and experienced a decline in the exports of industrial products and it failed to attract foreign investors. Exports are limited with cotton, textile and wheat. Therefore, Pakistani rupee continues to lose value.
THE PLACE AND IMPORTANCE OF AGRICULTURE
Agriculture maintains its position for years as the largest sector of India`s economy. However, its share in the gross national product decreased in the recent years. Broad-based economic growth of Indian economy is the main reason of reduced share of agriculture in the economy. According to the data from T.R. Ministry of Economy, India is the world-leader in the production of fresh fruit, vegetables, various spices, meat, milk and some grains. It holds the second rank in the production of wheat and rice after the world-leader China. In addition, it is one of the top three countries in the world in the production of dried fruits, agriculture-based textile products, root vegetables, tuber plants, legumes, fish, eggs, coconut and sugar cane. India increased the agricultural yield per hectare in the last sixty-year period as a result of the road and electricity projects and improvement of the agricultural equipment. However, India holds one of the highest rates in the world with respect to yield losses due to its underdeveloped infrastructure and unorganized trade network that are used in the post-harvesting processes. This situation causes India to make production at rates quite lower than its current potential.
Agriculture sector in Pakistan employs 43 percent of the total working population. The most intensive agricultural production takes place in Punjabi in Pakistan where the most important natural resources are the farmlands and water. Mostly, wheat and cotton as well as mango are produced in this country. Some of the important products cultivated in Pakistan are wheat, sugar cane, cotton and rice. In some years, drought is experienced in Pakistan that is a net exporter of these products and therefore, the yield of the said products is affected substantially. The share of the agriculture declined in the economy since 1947 when Pakistan became independent. Various support measures implemented by Pakistan in years increased the yield of particularly wheat and oily seeds. However, the inefficiency of the irrigation system had a major impact on the agricultural production. 25 percent of the water reserved for agriculture is lost due to various reasons. This is one of the causes of the reduction in yields.
GRAIN PRODUCTION AND CONSUMPTION IN INDIA
Data from the United States Department of Agriculture (USDA) show that rice is the main product in the agricultural production of India. India holds the second rank in the world in rice production after China. India produced 88 million to 95 million tons of rice between the seasons 2003/04 and 2010/11, and rice production increased above 100 million tons after the season 2011/12. India produced 105 million tons of rice in season 2010/11 and 2012/13, and the production volume increased to 106 million tons in season 2013/14. Estimations show that the production declined to 102 million tons in 2014/15.
Rice consumption in India increases in years. Indian is the second largest rice consumer in the world after China. India consumed 85 million tons of rice between the season 2003/04 and 2007/08, it consumed approximately 90-94 million tons of rice starting from the season 2007/08 and increased its rice consumption to 99 million tons in season 2013/14. The volume of consumption anticipated for the season 2014/15 is 99 million tons.
Wheat has the highest production rate after rice. India is the third in wheat production after EU countries and China. India produced 65 million to 78 million tons of wheat between the seasons 2003/04 and 2008/09, and wheat production that was 80 million tons in 2009/10 increased to 94.8 million tons in the season 2012/13. Although production volume declined to 93 million tons in season 2012/14, the production volume anticipated for season 2014/15 is approximately 96 million tons. India draws an upwards graphic in wheat consumption and holds the third rank in the global wheat consumption as in the production. Accordingly, India consumed 68-78 million tons of wheat between the season 2003/04 and 2009/10, it increased its consumption to 80 million tons starting from the season 2010/11 and reached to 94 million tons consumption in season 2013/14. The volume of consumption anticipated for the season 2014/15 is 9 million tons.
As the biggest 7th corn producer of the world, India produced 15 million tons of corn per season between the season 2003/04 and 2009/10. The production increased above 20 million tons starting from the season 2010/11 and it produced 24 million tons of corn in the season 2013/14. The volume of production anticipated for the season 2014/15 is around 22.5 million tonnes. The consumption rate for the corn is in parallel with the production rate. The consumption that was 17 million tonnes in 2008/09 increased to 19.5 million tonnes in season 2013/14. The volume of consumption anticipated for corn for the season 2014/15 is 20 million tons.
Sorghum production in India was around 7 million tons on average starting from the season 2003/04 until the season 2013/14. The volume of production anticipated for the season 2014/15 is 5 million tonnes. The volume of consumption is at similar percentages to the production volume. Accordingly, it would not be wrong to assume that sorghum production in India is carried out with the purpose of meeting the domestic demand. Likewise, India produces barley and millet in order to meet the domestic demand. 1.75 million tons of barley and 11.5 million tons of millet were produced in season 2013/14. 1.2 million tons of barley and 11.5 million tons of millet were consumed in the same season 2013/14. The volume of production anticipated for the season 2014/15 is 1.8 million tons for barley and 9.5 million tons for millet.
GRAIN PRODUCTION AND CONSUMPTION IN PAKISTAN
According to the date from United States Department of Agriculture (USDA), wheat is the main grain produced in Pakistan. Pakistan is the biggest eight wheat producer in the world and produces volumes in parallel with the volume of domestic consumption. What production of Pakistan that was 19 million tons in season 2003/04 increased to 21 million tons in season 2004/05 and 2005/06. It produced around 20 to 24 million tons in season 2007/08 and 2010/11, and the production volume increased to 25 million tons in season 2011/12. Wheat consumption that is 24 million tonnes for season 2013/14 is expected to be around 25 million tonnes in season 2014/15.
Figures representing the wheat consumption in Pakistan are not too different than the production figures. 22 million tons of wheat was consumed starting from the season 2005/06 until the season 2012/13. This figure increased to 24 million tons in 2013.14. The consumption volume is anticipated to increase to 25 million tons in season 2014/15. These figures place Pakistan on the sixth rank in the wheat consumption ranking of the world.
In addition to wheat, rice is another important grain produced in this country. Pakistan is 11th in the world with rice production. Figures show that volumes of the rice production in Pakistan are similar starting from the season 2003/04 until the season 2014/15. Accordingly, approximately 5.5 million tons of rice was produced starting from the season 2004/05 until the season 2007/08. Although it sometimes declined to 5 million tons between the season 2008/09 and 2013/14, rice production was around 6 million tons on average. Estimations show that the production accounted to 6.5 million tons in 2014/15. Pakistan`s rice consumption is quite low when compared with the production. On average, 2.5 million tons of rice was consumed in between the season 2003/04 and 2013/1, however estimations for Pakistan indicate a level around 2.7 million tons for the season 2014/15. The production for corn which is another important grain product varies between 3 and 5 million tons. According to the data from USDA, corn production of Pakistan that was 1.8 million tons in season 2003/04 increased above 3 million tons starting from the season 2005/06. Corn consumption of the country that reached to 4.3 million tons in season 2011/12 reached to 4.9 million tons in season 2013/14. It is anticipated to correspond to the same levels in season 2014/15, too. Pakistan uses its entire corn production for the domestic consumption and the production is at levels sufficient to meet the consumption.
Pakistan produces sorghum only for meeting the domestic demand. However, in the recent years, the volume of production remains below the volume of consumption. In this case, small quantities are imported. Pakistan that produced 145 thousand tons of sorghum starting from the season 2008/09 until the season 2014/15 consumed approximately 155 thousand tons of sorghum during the same period. 145 thousand tons of production and 155 thousand tons of consumption are expected in the season 2014/15. It is possible to say that the entire barley and millet production is aimed at meeting the domestic demand. Barley production accounted to 270 thousand tons starting from the season 2006/07 until the season 2013/14 and the consumption accounted to 230 thousand tons. 230 thousand tons of millet was produced between the season 2008/09 and 2013/14. The volume of consumption is the same as the volume of production. According to USDA data, sorghum, barley and millet production draw a stable graphic. This fact indicates that all of the data are based on estimations.
GRAIN TRADE IN INDIA
The highest volume belongs to rice in grain exports of India and India is the biggest second rice exporter of the world after Thailand. The country`s rice exports volume increased between the season 2003/04 and 2006/07 and it increased from 3.1 million tons to 5.7 million tons. It started declining after this season and the rice exports declined down to 2 million tons in season 2009/10. Rice exports started increasing with the season 2010/11 and it increased above 10 million tons with the season 2011/12. However, the volume of rice exports is anticipated to decline below 10 million tons in season 2014/15 and estimations indicate a figure equal to 8.7 million tons. After rice, the most important second export product is corn. India holds the sixth rank in the global ranking for countries exporting corn. India exported 12.5 million tons of corn in the season 2003/04. However, the volume of corn exports that declined to 448 thousand tons in the next season started increasing with the season 2005/06 and reached to 4.4 million tons in the season 2007/08. Although the volume of exports increase during certain periods, they export volume that declined to 3.8 million tons in the season 2013/14 is anticipated to occur around 2.5 million tons in the season 2014/15. The figures for corn imports are at extremely low levels. The volume of corn imports that was 10 thousand tons in the season 2013/14 is expected to remain at the same level in the season 2014/15, too.
Wheat is another grain product exported by India, however wheat exports of the country follow an unstable graphic. India that exported 5.6 million tons of wheat in the season 2003/04 could only exports very low quantities in the following 6 seasons. Wheat exports that declined down to 72 thousand tons in the season 2010/11 started increasing with the season 2011/12 and reached to 1.7 million tons. The highest export volume was achieved in the season 2012/13 with 8.6 million tons. The volume of exports for the season 2013/14 is 5.3 million tons. 2.2 million tons of exports volume is anticipated for the season 2014/15. An unstable graphic is observed for wheat imports, too. Wheat imports volume of the country that is at very low levels (8 to 280 thousand tons) reached to the highest level of 10 seasons in the season 2006/07 with 6.7 million tons. Imports are expected to occur at low levels in the season 2014/15 and45 thousand tons of imports volume is anticipated for wheat.
GRAIN TRADE IN IPAKISTAN
The most important product is rice in the grain exports of Pakistan. As the 4th biggest rice exporter of the world, Pakistan exports rice in quantities varying between 2 and 4 million tons. According to USDA data, Pakistan that achieved the highest export volume in the season 2012/13 with 4.1 million tons exported 3.4 million tons of rice in the season 2013/14. The country is anticipated to increase the volume of rice exports to 3.9 million tons in 2014/15. Slight increases started in the rice exports with the season 2009/10.
Another product exported by Pakistan is wheat although the quantities are very low. Pakistan achieved the highest volume of wheat exports in the season 2007/08 with 2.2 million tons. Although the volume increased above 1 million ton in season 2010/11 and 2011/12, the volume of exports declined to 850 thousand tons and 750 thousand tons in season 2012/13 and 2013/14, respectively. The estimations indicate a wheat export volume of 700 thousand tons for the season 2014/15. Pakistan achieved the highest volume of wheat imports in the season 2008/09 with 3.1 million tons. The wheat imports that started to decline in the following seasons increased slightly in 2013/14 and reached to 388 thousand tons. 700 thousand tons of wheat is expected to be imported during the season 2014/15.
FLOUR MILLING IN INDIA AND PAKISTAN
Annual report prepared by United States Department of Agriculture, Foreign Affairs Service (USDA FAS) show that the number of mills registered in India with medium to high capacity is approximately 1000. However, the actual number of mills is thought to be a lot higher than this figure. This shows that the milling sector in India has a small scale with respect to the organization. The aforementioned mills have an annual million capacity of 22-24 million tons in total. However, it is stated that only 45-50 percent of the total capacity of these mills are used. These mills producing mainly wheat flour (mostly maida flour) and semolina provide services to meet corporate demands. Mills also produce bran for the mixed animal feed industry. Each mill processes 10-12 million tons of wheat on annual basis. Low quality or defected wheat owned by the state are usually used in the animal feed industry.
Annual wheat production of Pakistan that is equal to 24-25 million tons is milled. Pakistan does not only produce flour in volumes sufficient to feed its high population, it also exports approximately 700 thousand tons of flour. All of the existing mills are private enterprises in Pakistan where there are approximately 1000 mills. There are no mills owned by the state. It is stated that these mills are operating at approximately 50 % of their capacities. Flour mills with majority located in the Punjab region focus their production on atta flour which is used for making village bread. It is estimated that there are numerous unregistered stone mills in Pakistan. These mills are usually located in the rural areas and operated by using the waterpower.