Orange rates fall 50%, exports hit by cash crunch

Pune: Agricultural commodities like cotton, fruits take a hit as delay in transportation, rate correction affect their exports
The government's demonetisation drive has affected export of agricultural commodities such as oranges and cotton, causing significant transport delays and rate corrections.

Exporters, however, said arrivals have started picking up after transportation was disturbed for about two weeks.

“As arrivals have come down, there would be some delays in shipments. But as things have started coming back to normal, a delay of two weeks will not be a big problem,“ said Nayan Mirani, partner at Mumbai-based Khimji Visram and Sons, a leading supplier of raw cotton.

Export of oranges to Bangladesh and other countries is perhaps the worst hit by demonetisation, as prices have halved.

“Prices have crashed by 50% and the time to harvest the fruits is get ting over. We fear that the situation can lead to increase in suicides of farmers,“ stated a memorandum submitted by orange growers from Vidarbha to the government.

Orange growers have demanded that the government should make new currency available to the traders on an emergency basis and begin government procurement of the fruits.

Though it is just the beginning of the grape season, farmers who had planned on early harvest targeted especially at the Bangladesh market suffered due to demonetisation. “Rates of grapes for export market have declined by about 20% after demonetisation due to fall in domestic demand as the Del hi market was closed for eight days,“ said Khanderao Shevali, a grape grower from Nashik district.

Some grape farmers are still accepting payments in demonetised notes while others have started accepting payments through banks.

Onion exporters fear some difficulties in exports once the acceptance of demonetised notes stops completely.

“Labourers working at mandis and local transporters are being paid through old notes. But things may become tough when they stop accepting these notes,“ said Danish Shah, an onion exporter.Companies that have more mature systems in place are not impacted much.