The Hindu : Kerala / Kochi News : Coir and marine exporters fear the worst

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Friday, Oct 31, 2008
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Kerala - Kochi

Coir and marine exporters fear the worst

R.Ramabhadran Pillai

KOCHI: As a slowdown is slowly seeping into major economies of the world, apprehensions on the export front are growing. A deceleration in European growth is bound to affect the prospects of potential export items. Though none in the export business is able to quantify the loss likely to be incurred on account of the reduced demand in the U.S. and other foreign markets, there is widespread fear that the long-term impact will be considerable.

Two of the prime commodities of export from Kerala are showing signs of weakening demand, according to experts in these sectors. That could be a sign of the times and the impact might be felt by more in the days to come.

Many of the importers in the U.S. who had placed orders for coir products have asked the exporters to delay the consignments, according to Ramanathan, Export Promotion Advisor, Coir Board. “Shipments are not taking place,” he says.

The letter of credit position is causing worry as banks are reluctant to take up LCs. The rupee touching a high of 50 per dollar is also causing alarm to the exporters.

October-November months generally witness a spurt in demand from abroad. Export orders worth Rs. 60 crores were received in October 2007 whereas it declined to Rs. 40 crores in October this year.

The trend would affect the sustainability of the coir sector, he points out. “We are in a Catch 22 situation. The situation will prevail in those sectors where the U.S. is a predominant buyer.”

The marine products sector too is finding a tough road ahead. The Seafood Exporters Association of India has been getting letters of distress from its members across the country. Says Sandu Joseph, Secretary of the Association, “ As on today, there is no problem; but we are anticipating serious problems.”

The purchasing power of people in the importing countries has gone down. Subsequently, the orders will be less, he observes. The orders for the Christmas season are already over. The next season begins in January and the exporters are waiting with bated breath.

The liquidity crisis is affecting the sector; working capital proposals are pending with banks, says an exporter, in a letter to the association. As the raw material prices are riding high, aquaculture and fishing activity have become unviable, according to him.With the decrease in demand, the importers may impose severe quality checks. That might lead to rejection of consignments, dealing a heavy blow to the exporters, according to another exporter.

But Kuruvilla Thomas, Director (Marketing), The Marine Products Export Development Authority (MPEDA), counters the argument. The consumption of shrimp in restaurants in the importing countries may go down, but the household consumption is bound to rise. China and Vietnam where the shrimp production is one of the main commercial activities, may be affected more, he says.

Certainly that offers no consolation to the domestic exporter. And most of them are keeping their fingers crossed.

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