The Hindu Business Line : Exporters hope to reap benefits of weak rupee

Coimbatore, Sept. 13 Little did Mr Deepak Shah, Chairman, South India Tea Exporters Association, or Mr V. Kumar, President, Karur Exporters Association, expect the rupee to cross the 45-mark against the dollar. Both admitted that they did not expect the rupee to depreciate to this level.

They sounded upbeat and did not have many words to say when asked to comment. Taken by surprise, all that they could merely utter was “it would definitely benefit the exporting community”.

But the President of Tirupur Exporters Association, Mr A. Sakthivel, maintained his cool. He said: “We are happy, but will not be able to reap the benefit because the input costs have gone up by 25 to 30 per cent.”

forward cover

Exporters by and large say they were cautioned even when the rupee touched 39-40 against the dollar. “Most of the exporters have made the forward cover at around Rs 40 and would have to honour the forward booking now,” Mr Sakthivel said.

According to him, at least 35 to 40 per cent of the exporters in Tirupur would have taken the forward cover to protect their interest.

Mr Deepak Shah also said most exporters of tea would have booked and not kept their positions open. According to him, a majority of the exports was either in euro or the dollar.

Offsetting loss

Mr Kumar, while conceding that it would benefit the exporters in Karur, said at the current level, it would offset the loss suffered by the units because of the steep increase in the price of inputs and other issues such as interest subvention and duty drawback.

“Pricing, though, will not have an immediate impact. Exporters would probably look at reworking the price on future orders,” he said, adding, “even bankers have expressed surprise when we asked them how and why the rupee touched 45-mark against the dollar.”

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