Weak rupee brings cheer to seafood industry

November 22nd, 2011 - 3:40 pm ICT by IANS  

Kochi, Nov 22 (IANS) The rupee plummeting to a record low by touching Rs.52.73 against the US dollar has brought cheer to the export-oriented seafood industry.

Anwar Hashim, vice chairman of the Marine Products Export Development Authority (MPEDA), said no one had expected a rate like this.

“The immediate beneficiary of this weak rupee will be those seafood exporters holding stock or those negotiating with the buyers,” Hashim said.

“According to business rules, seafood exporters can book forward up to six months. Those who have done that may not get this benefit,” he added.

During the fiscal 2008-09, the rupee was valued at Rs.49 to a dollar and this happened after a six-year gap.

“Overall, certainly this is something to cheer about. But don’t forget the central government took away the duty entitlement pass book (DEPB) scheme for seafood exports in September,” Hashim said.

“As a result, we will not get a credit of eight percent. So in one way we have lost and that has been compensated to an extent by the fall in the rupee,” he added.

Under the DEPB scheme, every time a shipment is made and the proceeds get cleared by banks, the exporter after applying to the director general of foreign trade gets the credit.

During 2010-11, for the first time in the history of marine product exports, the export earnings crossed $2.8 billion. This is also the first time that export has crossed all previous records in quantity, rupee value and dollar terms.

Exports aggregated 813,091 tonnes valued at Rs.12,901.47 crore ($2.4 billion).

Compared to 2009-10, seafood exports last fiscal recorded a growth of 19.85 percent in quantity, 28.39 percent in rupee and 33.95 percent growth in dollar earnings.

D.B. Reddy, president of the Seafood Exporters Association of India, however, told IANS that they are not sitting in a paradise because of a weak rupee.

“There are numerous risk factors associated with our industry. A weak rupee is one positive aspect but that alone will not solve all our woes,” Reddy said.

“The international market is not rosy as it was. Moreover, banks in the West have their own problems. Another factor that will work against us is that the prices of raw materials have gone up,” he added.

Industry sources also pointed out that the total seafood exports for the current fiscal are expected to be in the range of $3,500 million to $4,000 million, up from $2,856.92 million in the last fiscal.

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