Soya cake exporters not gaining from rupee depreciation

Soya de-oiled cake (DoC) exporters have said they have no gain from rupee depreciation against the common notion that exporters gain from rupee fall. India exports nearly four million tonne of DoC of which Madhya Pradesh contributes 50 per cent.

High prices of raw material also diminish chances of gains for exporters. Exporters have also demanded that increased interest subvention rate should also reach the soyabean exports and exemption from income tax on DoC exports gains.

"DoC exporters face double whammy; at one hand they have to buy costly raw material on the other the international buyers correct its prices when you are economy is exposed," Rajesh Agrawal, spokesperson Soyabean Processors Association (Sopa) of India said.

DoC prices are hovering between $440- 480 per metric tonne for November contract. The state soya prices are also higher this year and are ranged between Rs 3300-3500 per quintal. "Even a prudent businessman can't make profit in this highly volatile market," Agrawal said.

The Assocham and PHDCCI also said the exporters have not much gained from the falling rupee as they have no additional benefit. "When it comes to Madhya Pradesh it is a landlocked state and an exporter has to shell out more on transport. Why should an international buyer buy from India if it is costlier, they can buy it from other countries like Argentina," Anil Agrawal, chairman of Madhya Pradesh Council for both chambers said.

He demanded increased interest subvention rates should also be applicable to soybean sector if the government wants to boost exports. Many sectors are offered interest subvention scheme on exports.

"Further they should offer income tax exemptions on export gains. If they have to boost exports they have to offer sops and proper polices," Agrawal said.

However, industry feels no gain from present market conditions. "Even if there is any gain it is not more than 5 per cent and a continuous spell of falling rupee gives no weight to your gains," said O P Goel, past chairman of Sopa.