Rupee appreciation worries seafood exporters

The rupee has appreciated to its 11 months high value against dollar

The seafood exporters from Odisha are worried over the strengthening of rupee which has appreciated to its 11 months high value against dollar after a clear verdict in the the elections signalling installation of a strong government at the Centre under the leadership of Narendra Modi of BJP.

“Marine product exporters are in a tizzy with sudden appreciation of Indian currency by Rs 2 per dollar within a span of seven days,” said an exporter.

While the demand from the USA, a primary buyer of shrimps from India, has shown recessionary rends, there is increased harvesting of this marine product in other countries like Vietnam, Ecuador.

In this backdrop, the appreciation of rupee has further dampened the spirit of the exporters, he added.

Due to the falling demand, the prices of shrimp have dropped by 25-30 per cent. While the price of shrimps of 16-20 grade has fallen from $16 per kilogram to about $12, the same for  31-40 grade shrimps has come down to $8.5 per kilogram  from $11 in December-January period.

On Monday, the rupee ended at an 11-month high of 58.6 per dollar, compared with the previous close of 58.78 per dollar. The rupee snapped a four-day gaining streak on Tuesday. The partially convertible rupee closed at 58.63/63 per dollar today.

The current trend may hit the shrimp exports which is expected to fall by about 20 per cent in value terms this fiscal.

According to the estimates of Marine Products Export Development Authority (MPEDA), India’s seafood export crossed one million tonne mark for the first time and the earning was over $ 4.5 billion in 2013-14. In rupee terms, the estimates indicated earnings of about Rs 20,000 crore.  Previous to that the exports had stagnated at $ 3.5 billion for two consecutive years. In 2012-13, India had exported 928,215 tonnes of shrimps valued at Rs 18,856 crore. The record performance in the last fiscal was due to two major factors — fall in production and exports of South Asian countries and the lowering of CVD (countervailing duty) on Indian shrimps in USA. From the beginning of this fiscal, exporters are hit hard due to the sudden appreciation of rupee and rising input costs for farmers,  particularly towards seeds and feeds, said Gorachand Mohanty, president, Seafood Exporters Association of India-Odisha region.

Citing changes in the currency exchange rate, many buyers are now cancelling their orders or renegotiating the prices, sources added.