The Hindu Business Line : Rise in rupee hits coir exports

Kochi June 11 The Coir Board has sought urgent remedial measures from the RBI for the industry, which has been hit by the steep rise in the value of rupee against the dollar, especially during the last two months.

Mr A.C. Jose, Chairman, has submitted a memorandum to the Reserve Bank Governor requesting him to rein in appreciation of rupee which had hit coir exports badly. He said that the problem of rising rupee had affected coir exporters. There was growth in exports of more than Rs 100 crore to touch Rs 605.16 crore in 2006-07. The average shipment per month was Rs 50 crore. However, during the last two months, the shipments have slowed down considerably.

Mr Jose pointed out that coir exports had dwindled by around 19.22 per cent in the last two months.

The rise of rupee, enhancement of PLR rate in respect of packing credit, term loan, pre-shipment/post-shipment credit by banks, fringe benefit tax etc have pushed the coir industry into doldrums. Further, these factors have eroded the profit margin of exporters.

Mr Jose has sought urgent remedial measures by the RBI in tandem with the Finance Ministry so as not to dent export competitiveness. He pointed out that the coir industry, which has low unit value realisation and compressed profit margin, could not absorb the appreciation of rupee. The smaller exporters were unable to hedge and for several contracts signed in February or March, it was not possible to re-negotiate the contracts.

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