The depreciation of the rupee is expected to enhance the competitiveness of Indian agro-commodity exporters, likely increasing overseas shipments of cotton, basmati rice and soyabean.
Exports of cotton could increase by up to 16%, basmati rice up to 10% and soyabean by nearly a sixth, trade participants said.
“The Indian rupee has depreciated and has lent a big support to cotton exports. In the beginning of the season (from October 1) we had projected cotton exports to be 42 lakh bales, which we have now revised to 47 to 50 lakh bales. This 12% to 16% growth in exports is due to the weak rupee,” said Atul Ganatra, president, Cotton Association of India. Each bale equals 170 kg.
Ganatra said there was increased buying by China, Vietnam, Bangladesh and Indonesia.
In the last three months, the rupee depreciated by almost 5% to Rs 75.50 against the dollar, said Anuj Gupta, deputy vice president of commodities research at Angel Commodities Broking. Gupta expects the currency could slide to Rs 77- Rs 80 in a month.
“We will now recover the lost export market for soyabean and soyameal due to the weak rupee,” said Davish Jain, chairman of the Soyabean Processors Association of India. “Exports for the 2019-20 season beginning October have been slow due to various reasons, but now we see an upswing. Last month, we had targeted exports for the season to be 6 lakh tonne, which can likely go up to 7 lakh tonne. This will make us competitive in global markets compared to the Latin American countries,” he added.
Soyabean and meal demand is coming from the US, Canada, France, Iran, Japan and South Korea.
Exports of basmati rice have also revived and the industry expects the rupee to touch Rs 78 to Rs 80 to a dollar, said Vijay Setia, former president of the All India Rice Exporters Association.
“We are not entering into future contracts due to the volatility in the currency. However, we expect exports to easily increase by 7% to 10% from our previous target of 42 lakh tonne of rice this year. Indian exporters will be able to cash in on the lucrative market of the US, Europe and Middle East,” he said.
The falling rupee has also lifted the exporter’s margins, said guar exporter BD Aggarwal, managing director of Vikas WSP. “I have got a Rs 2-crore benefit for a current order of over Rs 100 crore, with the rupee weakening. Demand for guar in the food processing sector has slowly started picking up,” he said.