Overseas buyers demand heavy discounts from local exporters.
Global meltdown is not the only thing that is worrying chemical exporters in Gujarat. Sharp fall in chemical prices coupled with surge in dollar against rupee has added to the woes of chemical exporters from the state.
Considering substantial drop in chemicals prices and liquidity crunch, chemical importers are demanding heavy discounts from chemical exporters from Gujarat, which has led to cancellation of many orders apart from blockage of chemical consignment from India.
Over the past couple of months chemical prices have nosedived sharply. The prices of sulfuric acid prices have come down from 13,000 a tonne to Rs. 200 a tonne. Similarly, sulfur prices have dipped to Rs. 44 a kg to Rs. 4 a kg within last couple of months.
“Fall in raw material prices result into decline in finished products prices. In the wake of chemical prices bottoming out in recent times, buyers from overseas markets are refusing to take the delivery of chemicals dispatched by Indian exporters. In many cases, importers are also forcing exporters to offer discounts to them,” said Jaimin Vasa, president, Gujarat Chemical Association (GCA).
There has been 33 to 50 per cent price fall in various chemical prices. “Foreign buyers are demanding 25 to 30 per cent discounts. Discounts have been sought even in case where material has already been shipped from India. Orders worth Rs. 300 to Rs. 400 crore are almost on the verge of cancellation,” said Naroda Industries Association, president, Shailesh Patwari.
“Number of chemical consignments have been held up as importers are unwilling to take deliveries. Overseas buyers are also of the view that realisation of chemical exporters from Gujarat have increased with surge in the value of dollar against rupee and they want the benefits to be passed on them,” he added.
