After a nearly seven-month decline, the rupee is finally picking up again, gaining in strength last week. However, the currency’s resurgence is having a negative impact on Indian exports, with rice particularly seeing major dampening. While the rupee’s strength indicates good signs for the Indian economy, exporters are unlikely to be happy about the price rise, and will likely be watching future changes closely. The rupee’s boost has also been helped by India’s announcement that it is keen on restarting talks with the US on trade. The US’s GSP withdrawal has created a lot of uncertainty for Indian exporters, and any sign of a resolution will be a positive signal for the market. Also, the UK’s decision to not impose any new tariffs on Indian seafood exports after Brexit will offer additional relief to the sector, even as the UK’s own Brexit process remains mired in indecision. However, neighboring Pakistan has scored a point over India by bagging a massive sugar trade deal with China that India had been chasing for a while. Despite various Indian overtures to Chinese officials, including a seminar in June 2018, China has chosen to award the export quota to Pakistan -- a severe blow to Indian sugar exporters. In other news, India’s coffee trade has received a major tech boost, with the launch of the country’s first blockchain-based marketplace app for trading in Indian coffee. The Coffee Blockchain initiative, as it is called, will not only allow for greater profits to Indian coffee-growers and exporters through the removal of middlemen but will also serve as a valuable pilot project for the implementation of blockchain in various sectors of Indian trade and commerce. The technology has vast potential and the success of the initiative will definitely be closely monitored by all stakeholders.
Trade Update
30TH MARCH
# 18
Rice export prices in India rose to their highest level in more than seven months as the rupee appreciated, denting demand while trading companies in Vietnam increased domestic buying to fulfill new overseas deals. India’s 5% broken parboiled variety was quoted around $392-$395 per tonne this week, up from $386-$389 last week. “Demand has been moderating due to the price rise. African buyers are not ready to pay higher prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.
India is keen to restart its stalled trade talks with the US and is considering asking the country to postpone withdrawal of the Generalised System of Preferences scheme for Indian exporters by two-three months beyond May, a government official said. The idea is to have some time in hand to address American concerns in the areas of market access and convince it to retain the popular scheme that allows exporters of more than 3,000 items duty-free access to the US market.
Pakistan has taken a lead over India by winning a 300,000-tonne sugar export quota from China, according to traders. India has been waiting for a long time to bag the export quota from China. “We are waiting to get sugar export quota to China, which is a huge market,” said Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories. The Indian embassy in Beijing had organized a seminar to promote exports of Indian sugar to China in June 2018.
The United Kingdom (UK) will not impose any new tariffs on Indian seafood exporters after the former parts ways with the European Union (EU) in case of a ‘no deal’ Brexit. The UK has stated that imported seafood from countries currently benefiting from the GSP (Generalised System of Preferences) scheme of the EU, including India, will continue to benefit from the same low or zero tariffs. The EU GSP is the system of preferential trading arrangements through which the EU extends preferential access to its markets to developing countries.
The Coffee Board, on 28th March, launched the pilot of the country’s first blockchain-based marketplace app for trading in Indian coffee, aimed at getting growers better returns by removing myriad middlemen. Known as the Coffee Blockchain initiative, the pilot was activated simultaneously by Jose Dauster Sette, Executive Director of the International Coffee Organisation from Nairobi and Anup Wadhawan, India’s Commerce Secretary from New Delhi.
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