Small exporters to gain from Rupee depreciation

KOZHIKODE: The Rupee depreciation is expected to fetch windfall revenue for small-scale exporters this fiscal, despite considerable decrease in export volume.The impact is most visible in the cashew and spices export sector where the volume in terms of value has increased, though the export volume has slumped considerably. Data available with the Cashew Export Promotion Council show that, cashew exports recorded a total revenue of Rs 2,598.15 crore in 2010-11.Against this, the export sector has notched a revenue of Rs 1327.01 crore in the first three months of 2011-12 alone, which is more than half of the last fiscal’s total revenue.The situation is no different in the case of spices, as it has recorded 32 per cent revenue increase in the first five months of this fiscal. Though importers are losing ground owing to the devaluation, the goods producers, such as farmers and fishermen, are also making rich dividends.This is most visible in the case of fishermen, who is selling fish to exporters, as they are now getting nearly 30 per cent more value than what they got around this time of the season last year.The small scale exporters are the most benefited as they are now better able to compete in the global market with products that can be sold at cheaper rates. According to the Central Customs officials, cashew, spices, coir and marine products exporters are doing brisk business.However, the big companies can’t rake in much profit as many of them have already entered into long-term contracts with various firms. “Unstable Rupee is always a case of concern for both exporters and importers. In the case of exporters, Rupee depreciation means short-term advantage. Those exporters who hold their products would be benefited,” said George Ninan, Partner of the Baby Marine Group.However, market experts are of the opinion that the Euro Zone crisis and global meltdown have affected exporters from making the desired profit, utilising the low value of the rupee against the dollar.“With rupee remaining volatile for the last couple of weeks, business people are now waiting to stabilise the rupee in order to enter into new deals,” said Alex K Babu, managing director of Hedge Equities.