Agri Business

Currency crunch leaves Kerala fishing industry gasping for air

VSAJEEVKUMAR AJ VINAYAK Kochi/Mangaluru | Updated on January 15, 2018 Published on November 24, 2016

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Both vendors and customers have been struggling to cope with the cash shortage





Kerala’s fishing sector has been witnessing a diminishing trend in prices, especially in the retail market, since post-demonetisation measures kicked in over the last fortnight.

The sector, which offers direct and indirect jobs to nearly four lakh workers in the mechanised fishing segment, is awaiting the Centre’s decision on a further extension of the November 24 deadline to accept the old notes at petrol stations.

“This will enable us to meet the fuelling needs of fishing boats that are venturing into the sea,” Joseph Xavier Kalappurackal, General Secretary of the All Kerala Fishing Boat Operators Association, told BusinessLine. He added that the government’s gesture in this regard had slightly minimised the impact of demonetisation.

On Thursday, the government extended the use of ₹500 notes for purchase of fuel. ₹1,000 notes can no longer be used.

Big business

At present, there are about 2,700 fishing boats operating on the Kerala coast and it requires ₹3 crore worth of diesel per day, with daily sales to the tune of ₹7 crore. A single boat consumes ₹1.25-1.5 lakh worth diesel for a 5-8 day venture into sea. The extension of the deadline will definitely be a great relief to the cash-starved sector, he said.

The impact of demonetisation has been felt in the local market, he said. The low purchasing capacity was reflected in fish prices and the majority of the local traders are facing difficulties in tendering exact changes to customers due to the shortage of lower denomination currencies.

Missing an opportunity

Moreover, the cash crunch has hindered the fishing sector from leveraging the opportunities arising out of a good landing of demersal fish species (living at the bottom of the sea) witnessed in the last few days. The sector has been witnessing 100 per cent growth in the last couple of days and the bumper catch included cuttle fish, squid, ribbon fish, black pomfret, etc, Kalappurackal said.

Seafood exporters are also facing the brunt of the currency shortage as their supplies from the harbour get affected. Norbert Karikkasseri, President, Seafood Exporters Association of India — Kerala region, said that all transactions in the sector — right from primary supplies from the harbour to weekly payment of wages — is in cash.

The freezing of high-denomination currencies has hampered all operations in the sector at a time when the West Coast is witnessing a dwindling catch due to climatic conditions.

Meanwhile, in Mangaluru (Karnataka), the demonetisation did prevent Sanketh Bengre, owner of a fishing boat, from paying the fuel bill. However, he felt the pinch of its impact while marketing the catch. Bengre said that the lack of cash flow brought down the number of customers.

Mathew Joseph, who buys fish at the local market, said that he could not buy the fish of his choice for some days.

Even his neighbourhood vendor, who supplied customers fish at their doorsteps, was bringing the fish of lesser quality, he said. Nitin Kumar, President of the Mangalore Trawl Boat Fishermen’s Association, said that the price of first-grade mackerel was down by ₹20-25 a kg after the demonetisation, and the next grade was down by ₹8-10.

Card payment option

VK Shetty, Managing Director of Karnataka Fisheries Development Corporation (KFDC), told BusinessLine that the retail sales of fish were affected to some extent by demonetisation. KFDC has 17 retail outlets to sell fish in different parts of Karnataka.

Asked if the corporation offers the facility of cash-less transactions at its retail outlets, he said only the Mangaluru and Bengaluru retail outlets of KFDC have point-of-sale (PoS) terminals. Because of this, there was no problem with regard to sales in these two outlets. “We are now thinking of setting up PoS terminals in other retail outlets also,” he said.

To a query on the impact of demonetisation on exports, Bengre said all fish can’t be exported — only around 25-30 per cent. “There was no problem here as the transaction is done through cheques only,” he said.

KFDC’s Shetty said that diesel sales at the bunks of KFDC were not affected, as the bunks were allowed to accept old currency notes of ₹500 and ₹1,000 denominations. KFDC markets diesel at Mangaluru, Malpe, Gangolli, Tadadi and Karwar along coastal Karnataka.

Bengre said that the fishermen did not face problems while buying diesel at the bunks.

Expressing a similar view, Nitin Kumar noted that bunks are allowed to accept ₹500 and ₹1,000 currency notes till November 24.

Published on November 24, 2016
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