Food sector braves rising rupee as demand grows

The appreciation of the rupee has affected most of the exporters in India but there are a few, particularly in the food processing sector, who have managed to tide over their losses and retained their market shares as well.

The chairman and managing director of Lalru based Agro Dutch Industries (the leading exporter of mushrooms from India), Malvinder Singh, said that it was a crisis-like situation in the beginning but the growing demand of mushrooms in the international market helped them negotiate with the buyers.

According to Singh, 22 per cent of import of mushrooms is sourced from Agro Dutch industries. It is a 100 per cent export oriented unit with a turnover of about Rs 250 crore.

He added that the shrinking market of mushroom production in China helped them to get higher returns. Due to tremendous growth of the Chinese economy, many small and marginal farmers in China switched over from mushroom cultivation to other businesses.

This helped the Indian companies to mandate their terms as exporters, he added.

Similar sentiments were echoed by Man Mohan Malik of Himalya International Limited: "The market in the US is so big that there is always a room for processed food. Despite the hardening of the rupee, we registered a growth of about 40 per cent this year. We are indeed planning to double our capacities to meet the export demand." Himalya exports fresh mushrooms and various products made out of mushrooms in the US market. LT Overseas Ltd, known for its Dawat Basmati brand rice (operations in Haryana), also succeeded in persuading its buyers for higher returns.

The managing director of the company, VK Aroara, said that it took them some time to absorb the losses but, gradually, they were able to convince their buyers about the viability of the business with their cooperation in revising the prices.

The small trading houses in Haryana who are into basmati exports (Haryana exports 90 per cent of basmati rice from India) also resorted to forward trading to create a cushion in the wake of losses.