The Red Sea crisis is beginning to hamper India’s spice exports.

After tea, it is the turn of India’s spice exports to bear the brunt of the Red Sea crisis. According to the exporters, the impact on goods deliveries would in turn affect the availability of raw materials and other schedule obligations.

“Trading of bulk commodities like spices is time bound and due to ongoing issues, we are unable to deliver the consignment to the customer in the agreed time frame” said Gulshan John, Managing Director, Kochi. -based Web Spices. Failure to deliver shipments on time can cause delays in production, manufacturing or distribution processes that can increase costs for businesses in terms of storage and downtime. This could disrupt the supply chain and lead to shortages and production bottlenecks, adding that the country’s exports were $4 billion last year.

Domestic remittances delayed

John, who is also a member of the executive committee of the All India Spices Exporters Forum, said trade routes through the Cape of Good Hope are taking longer and pushing prices up to $3,800 at the Cochin-European base port. . . per 20-foot container. and $4,500 per 40-foot container $450-$500 and $550-$600.

Increased delivery time affects interbank remittance commitments, leading to payment failures. In addition, there is a great lack of containers in the store, which also increases charges. Air freight costs have also increased due to increased demand. Exporters have long-term contracts with buyers. To meet the commitments, the suppliers accept an increase in freight costs, which leads to losses. Demand for spices increased and suppliers expanded operations despite the ongoing war between Russia and Ukraine. But the Suez Canal crisis made the situation worse, he said.

No concern for Gulf shipments

The cardamom trade is not affected by the development because it is concentrated mainly in the Gulf countries and supplies to West Asia remained unchanged. Exporters are eyeing the upcoming Ramzan demand from Gulf countries in March. A cardamom exporter based in Vandanmedu, Iduk state told Business Direction that the Guatemalan crop invaded the Gulf market last year due to higher prices of Indian cardamom. However, domestic prices are stable this year (an average of USD 1,700 per kilogram), and the price difference with the Guatemalan product, which promises good orders, is USD 3.

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