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Market News
Russia-Ukraine conflict hits gherkin shipments.
Mar 10, 2022
The Russia-Ukraine conflict has taken a toll on Indian gherkin exports. Gherkin shipments to Russia and Ukraine have come to a halt following the breakout of the conflict.
Exporters said the geopolitical tension has compounded their problems as they were already reeling under the impact of higher freight costs for the almost two years now.
Pradeep Pooviah, Vice-President, Indian Gherkin Exporters Association (IGEA) said there has been a serious impact of the Russian crisis on the Indian exports.
'Shipments have stopped and payments are struck and this may force the exporters to trim down their procurement in the days ahead,' he said.
Russia was the second largest buyer for the Indian gherkins in 2020-21 after the US. Shipments to Russia stood at 23,453 tonnes, accounting for almost a tenth of the total exports of 2.23 lakh tonnes.
In value terms, the shipments to Russia stood at ?133 crore of the total of ?1,651 crore. Shipments to Ukraine stood at 1,672 tonnes, less than a per cent in export volumes.
Impact of the conflict
The sharp decline in the value of Russian Rouble against the US dollar has triggered a crisis and exporters said payments are struck.
'Some of our buyers have assured to offset the losses due to sharp currency movement,' Pooviah, CEO of Blossom Showers Agro said.
'Following the outbreak of the conflict, some exporters have reported cancellation of shipments. Some shipments, which have not moved out of Chennai port have been recalled as shipping liners have expressed their inability to deliver the cargo,' Shivaram, President of Indian Gherkin Exporters Association, said.
'Following the crisis, buyers have been asking for a discount and this may add to the existing problems of the industry,' he added. The industry body is planning to take up the issue with government seeking some support.
Production pattern
Gherkins are consumed as pickle overseas and the production in India is mainly concentrated in southern States such as Karnataka, Tamil Nadu, Andhra Pradesh and Telangana.
Over half of the 50 gherkin processing and exporting units are located in Karnataka, the major producer.
India competes with the likes of Mexico and Turkey in catering to the gherkin demand from the US and European countries. US is the largest market for Indian gherkins.
SA Biradar, Managing Director, IGF Innovative Foods, an exporter of gherkins to the US and Europe, said that the freight costs may go up further due to the prevailing geopolitical tensions. 'Following the outbreak of Covid, freight rates have risen by almost five times and we will have to see how this crisis impacts,' he said.
Production of gherkin mainly takes place under the contract farming model, wherein the processors/exporters supply the inputs to farmers and buy-back the produce. An estimated 60,000 acres is under gherkin in these States and close to one lakh farmers are engaged in the cultivation. Over 99 per cent of the gherkin produced in the country is exported.
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