Kerala's coir exports caught in a tug of war over prices

Economic Times

17 Sept. 2008

 

KOCHI: Coir export from India is likely to be hit with the coir yarn producers and dealers in Kerala stopping the supply demanding higher price from exporters. With the exporters in the state, which is the major producer of coir products in the country, being in no mood to relent, the situation is heading towards a stalemate.

 

According to Kerala Coir Yarn Producers and Dealers Association, the rise in price of brown fibre and transportation charges have increased the cost of production. Association secretary Sibi said the cost of brown fibre has risen from Rs 300 to Rs 360 per kg.

 

Most of the brown fibres come from Pollachi in Tamil Nadu. The truck rates for transportation have increased to Rs 5,550 from Rs 4,800 after the hike in diesel price.

 

Mr Sibi said last year the producers got a price range Rs 24.50 to Rs 26.50 per kg. But this year it has come down further.

 

"We need to get around Rs 26.50 per kg to carry on our business," he said. The global situation has also turned advantageous for the exporters with the recent depreciation of rupee, he added.

 

The exporters, however, said prices have not stabilised globally and as a result they were yet to be on a firm footing. "The rupee depreciation is limited only to the dollar. It has appreciated against the euro and the pound," Mr Ponnambalam, former president of the Indian Coir Exporters Association, said.

 

The exporters are eyeing at other southern states for preparing coir products. It would also save the cost as Pollachi is already a main centre for the production of the brown fibre. Coir spinning has caught on well in other southern states, they said.

 

In 2007-08, the value of coir exports from the country had dropped to Rs 593 crore from a level of Rs 605 crore in the previous year mainly due to appreciation of the rupee.