Oilseed exports caught in Russian red tape

Indian groundnut and sesame seed exporters may fail to grab a larger pie of the Russian market this season. This is due to inordinate delays in securing Russian approval for certifying laboratories in the country.

In October, a 15-member Russian delegation had examined the infrastructure of six laboratories across the country such as Geo-Chem Laboratories and Reliable Analytical Laboratories in Mumbai, Arbo Pharma and Delhi Test House in Delhi, Wimta in

Hyderabad and IRTL in Pune, in addition to the existing lone certifying agent, Shriram Institute for Industrial Research in Delhi, an independent non-profit research organisation.

The delegation suggested a change in the format of the certificate which was later approved by the Agricultural and Processed Food Products Export Development Authority (APEDA). They also suggested some changes to the certifying mechanism.

Following this, APEDA, which is co-ordinating with the Russian government, sent a revised proforma certificate a month ago with the assurance to incorporate all mechanisms, which now awaiting Russian approval.

"We have already sent the revised proforma certificate to the Russian government and are awaiting the outcome. The response may come at any moment," said Vinod Kaul, assistant general manager, APEDA, who is actively involved in co-ordinating with the Russian agencies.

Although, APEDA has suggested the approval of all the laboratories which the Russian delegation had examined, it may not be enough to boost exports.

"We need to have all the 10-12 APEDA nominated laboratories as certifying agents for exports to cash in on the potential in Russian markets fully," said Sanjay Shah, chairman, Indian Oilseeds & Produce Exporters Association (IOPEA).

On NCDEX, February contract is likely to be mostly range-bound with a slight negative bias in the week ahead Russia banned imports of rice from India in December 2006 and sesame seed and groundnut in March 2007. Agencies such as APEDA and IOPEA, and Indian diplomats had opposed the move.

The ban was lifted from September 17 for four months after repeated requests and assurances from exporters who agreed to meet the stringent quality and certification procedures. Russia has threatened to reimpose the ban from January 15, 2008 if India fails to meet the quality specifications.

Since obtaining separate quarantine permits, and sanitary, quality and safety certificates by the lone issuer Shriram Institute for Industrial Research proved to be economically unviable and time consuming, APEDA sought approval of more laboratories across the country.

"It's almost impossible to carry stocks to Delhi from all producing centres, including Mumbai, Pune and Ahmedabad, for approval. Hence, region-specific certifying laboratories will help us boost our exports," said a leading sesame seed exporter.

India's total groundnut and sesame seed exports to Russia and Ukraine stood at 7,633 tonnes and 6,403 tonnes in 2006-07 out of the total Russian market requirement of one lakh tonnes and 15,000 tonnes, respectively.

But, if the Russian approval fails to come within a fortnight, then India may lose the market to China.

The opportunity is huge this year as prices in China, the nearest competitor, is much higher than in India.