November 23, 2016

Indian currency demonetisation hits seafood exporters

Seafood exporters in India fear the cancellation of orders following the demonetisation of high-value currency notes.

The financial initiative, which forms part of the anti-corruption measures adopted by the government, hurdled exporters' activities as they are finding it extremely difficult to make the materials available in time at ports for shipments, The Business Standard reported, according to fis.com.

"Exporters are unable to make the shipments on time as they are running out of cash to make on road expenses of trucks carrying the cargo to the ports," said Ramesh Mohapatra, chairman of Magnum Seafood Ltd and president of Utkal Chamber of Commerce and Industry.

These expenditures include personal expenses of the drivers, fuels, road taxes, and loading and unloading costs.

Delayed payments

Those involved in the seafood sector also stated that the government's move to limit the withdrawal amount and cash transactions would also delay payments to workers.

"The problems will be there temporarily on payment of wages of labourers. We will make the payments to the contractors by cheques. The point is that the issue of cash crunch should be sorted at the earliest, else it will be problematic", said Tara Ranjan Patnaik, chairman of Falcon Marine Exports Ltd, a leading exporter in the country.

Seafood Exporters Association of India (SEAI)-Odisha Ajay Dash stressed that the Union government was taking measures as required and amending the restrictions.

According to SEAI statistics, Indian seafood exports are pegged at US4.7 billion, with the US and the Southeast Asia being the major importers. Frozen shrimp is the major export item, followed by frozen fish.