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Cash Crunch Halves Maha Export of Fruits & Veggies

Date 21-Dec-2016
Subject Cash Crunch Halves Maha Export of Fruits & Veggies

PUNE: Exports of fruits and vegetables from Maharashtra to the Gulf countries, Europe and Canada have fallen by 50-60% since demonetisation, according to market sources. The number of consignments from the major exporting markets in the state -Pune, Mumbai and Nagpur -have reduced drastically as exporters have not been able to pay farmers and labourers in cash. Export associations in the state said several exporters have shut shop for the time being.

Rough estimates indicate that the state exports fruits and vegetables worth over Rs 190 crore every month from November to April, which is the major season for export of these items. This has fallen to exports of only Rs 76 crore now. Also, the quantum of exports has dipped from 350 tonne daily to just around 100 tonne, the sources told TOI. Sources in the Federation of Indian Export Organisations (FIEO), which comes under the ministry of commerce, told TOI that the export of agriproducts from the state has declined drastically as the note ban has affected labour-intensive micro, small and medium enterprises (MSMEs) sectors the most. "Industries like agriculture depend heavily on labourers, who are temporary workers coming from different parts of the country and do not have bank accounts. These labourers, and even transporters, require to be paid in cash," the sources said.

The sources, however, said the demonetisation effect on exports was temporary and would fizzle out once there is enough cash flow in the market.They said the government should allow higher bank withdrawals for labour-intensive units. "As of now, Rs 50,000 can be withdrawn per week from current accounts, which is not enough to pay the labourers," they said.

A major city-based exporter of fresh fruits, vegetables and foodgrains said exports have dropped by around 80% since November 8.


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