Trading prices for India’s major cereals during WTO regime: Growth rates, TOT, elasticities and foreign trade policies

Abstract

World price influence on international trade and hence economic precision is required. This is basically foreign trade research study. The exports and imports of major cereals viz., rice, wheat, maize and total cereals from 1990-91 to 2015-16 were selected. Estimated CAGR, Instability Index, Terms of Trade, Export import price elasticities of commodities and their top destinations. The results found that wheat export prices more than import prices indicating India has comparative advantage in wheat. The terms of trade for wheat and total cereals were found to be more than rice and maize crops. The exports price growth rate of wheat was more than imports, while remaining crops witnessed reverse trend. The rice witnessed high export elasticities. Export import prices of all cereals were unstable. The study found that the highest exports and imports growth rate for cereals was observed in Bangladesh and Australia respectively, while same countries also emerged as top export import destinations in cereals. The study suggests that India should make multilateral agreements in these countries. Multilateral trade relationship with high CAGR countries would help in smooth trade of agricultural crops.