Bilal reports on how a drop in demand has hit the local industry
(Mr. Bilal Hussain, 29, was born and raised in Srinagar. He went to the CASET Experimental High School, and the S.P. College, Srinagar. He has a Master’s degree in Finance and Control (MFC) from the Kashmir University. He worked as a financial writer and analyst for a telecom start-up company before joining Greater Kashmir staff as a writer/sub-editor in 2007. His personal interests are reading, writing, and internet surfing.)
Valley walnut industry in dire straits
Srinagar: The global economic slowdown has taken a toll on the Valley walnut industry.
The traders here said the walnut exports had come down drastically in the wake of economic recession which had caused steep decline in the demand as well as the prices.
While maintaining that the economic meltdown was the main cause which has brought down the prices of walnut at the international market, president KCCI Dr Mubeen Shah said the demand too has gone down drastically.
President, Kashmir Chamber of Food Processing Industry (KCOFI), Dr Zain-ul-Abidin said the Rs 150 crore walnut industry was presently passing through troubled times.
“Before the recession, US used to export its walnut produce to selected markets like Japan and other countries, besides catering to its local demand of over 65 per cent of its production,” he said.
Abidin said the domestic demand in America has come down from 65 to 10 per cent only leaving the country with huge stocks. “Now with such huge stocks the US has encroached upon the markets which were actually been catered to by India and China,” he said.
He said since in India, it was Kashmir only that produced the walnut therefore it had become the victim.
“US penetration in these markets has increased to a greater extent,” he added.
Companies in the US used to sell walnut at 3.8 dollar per pound and now the same is being sold at 1.8 dollar. China has absorbed the shock as they have the much needed capacity,” he said.
According to Abidin in 2008 traders from Kashmir have exported less than 50 per of walnut as compared to the last year exports.
He demanded that there should be an increase in export oriented incentives provided by the government. “The government should provide the all possible support to the traders, exporters and growers,” he adds.
Experts in the trade believe that the lack of demand from European Union, who are buying over 70 per cent of India’s walnut export has affected the exports from Kashmir.
Traditionally the USA, which is the 2nd largest producer of walnuts in the world past year reduced its prices by over 55 per cent bringing its prices even under the Indian price.
Experts said due to the shortage of US dollar funds, exporters were not given dollar denominated credit during the peak procurement season Sept-Nov 2008.
They said the VAT refunds of walnut exporters were not released by the state government thus seriously impacting the cash flow of exporters.
Many exporters here said that buyers were seeking discounts and re-negotiation of contracts or invoices assigning poor off-take in their country as the reason for their action.