Jute exports take a hit from steep fall in India’s rupee Friday, July 12, 2013 -The Daily Star Bangladesh has seen a decline in exports of jute and jute goods to India, one of the major markets, as the rupee’s slide has pushed the neighbouring nation’s import costs up. “Our orders have dried up over the last several months,” said Kaihan Rahman, deputy managing director of Pubali Jute Mills, a leading exporter to India. “Even if they [Indian buyers] wish to place orders, they quote prices which are unacceptable to us.” The rupee fell 15 percent against the dollar in the last one year, according to Gopi Kishon Sureka, chief executive of Fiber ‘N Fibre, an exporter of jute products. “This has been very unkind to us.” The development comes at a time when markets in the Middle East have been shrinking amid sanctions against Iran by the Western nations and protracted political turmoil in Syria and Egypt. The Eurozone recession, too, had an impact. The dollar traded at Rs 59.64 yesterday, which was Rs 54.73 on January 1, meaning the Indian currency lost 9.04 percent in value in 2013 alone. In contrast, the local taka gained against the dollar, due to increased foreign exchange reserves and lower imports. The taka advanced 2.5 percent to Tk 77.75 against the dollar since January 2013. Sujit Bhattacharyya Laxman, owner of Uttara Jute Traders, said: “We shipped our last consignment to India in May. We have not received any order since.” Meanwhile, Sureka said the weakening of the Indian currency has been a boon for Indian exporters, while the appreciation of the taka a disincentive for local exporters. “The Indian exporters are offering lower prices for their products than ours, which is forcing us to reduce our prices to stay in competition.” Sureka fears the situation might get worse owing to a possible fall in prices of jute goods, influenced by increased supply from the new mills that are on way. Already, the prices of jute yarn, jute bags and other jute products have reached the lowest in four years. “But the costs of production inputs and wage rate have increased.” He urged the government not to reduce the cash incentives for exports of jute yarn to help the sector weather the bad time. Jute and jute good exports rose 6.54 percent year-on-year to $1.03 billion in fiscal 2012-13, according to data from the Export Promotion Bureau.
Posted on: Fri, 12 Jul 2013 03:41:00 +0000
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