The Hindu : Business : Expert says dollar will slide further

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Saturday, Dec 22, 2007
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Expert says dollar will slide further

Special Correspondent

KOCHI: Strengthening of the rupee against the dollar spells more trouble in the near future for Kerala’s export products, such as seafood, tea and spices, and the government needs to work with the industry to devise an effective strategy to overcome the crisis, Rakesh Mohan Joshi, expert in international trade, says.

Dr. Joshi, Professor at Indian Institute of Foreign Trade, New Delhi, was here on Wednesday to open a capacity-building workshop for the Marine Products Export Development Authority.

Expert predicts further slide in dollar

He told The Hindu that the rising value of the rupee (currently, around Rs. 39 to a dollar) had affected a large number of exports and wrecked several sectors in the country.

He predicted that the dollar’s slide would continue and by 2008-end, the exchange rate would be Rs. 35.

This would erode Indian products’ price competitiveness, as they would become expensive in international market. Kerala, which exported marine products, tea and spices, would be among the States that would be affected.

In Dr. Joshi’s view, Kerala can overcome this by devising a clear marketing strategy and going in for cost-effective production techniques.

For this, joint efforts by the government, the producers and the exporters are necessary. The State should focus on value- addition and branding. Since Kerala’s export items are basically primary products, there is a lot of scope for value addition, especially in seafood and spices. Value addition — for instance, exporting canned fish instead of raw fish — can bring in huge price benefits.

He said the State should pay attention to quality upgrade, international certification and benchmarking.

Since environmental concern was getting stronger in international market, that also needs to be taken care of to be competitive.

To take advantage of globalisation and the World Trade Organisation (WTO) regime, Kerala should promote generic branding and Geographic Indication. Tea should be promoted as Kerala tea on the lines of Darjeeling Tea; cashew should be marketed as Kerala Cashew. There could also be Kerala Shrimp and Kerala Rubber.

By this kind of generic branding, the products could command high prices. High-voltage marketing efforts were needed for this, but it would pay off handsomely in the long run.

Dr. Joshi said Kerala should gear itself for meeting the challenges of globalisation and the WTO regime.

“Emerging opportunities in the global markets are difficult to be tapped unless the industry and the government work together and devise a clear strategy,” he said.

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