Agri Business

Open sky policy to hit Kerala’s fruits and vegetable exports to Gulf markets

V Sajeev Kumar Kochi | Updated on October 13, 2020 Published on October 13, 2020

Exporters will now have to transport their products to Chennai or Bengaluru which will add to their costs   -  The Hindu

Exporters worried as none of Kerala’s four airports have been included in the policy

The Centre’s open sky policy for non-scheduled cargo flights has put Kerala’s fruits and vegetable exporters on tenterhooks.

According to them, none of the four airports in the State has been included in the operations of foreign, ad-hoc and pure non-scheduled freighter charter services and this would force them to depend on neighbouring airports for fulfilling their export commitments.

Adding costs

This would push up the cost of exports from Kerala, as the exporting community has to transport their cargo especially perishable commodities to nearby Bengaluru or Chennai, which is time consuming and expensive, said Munshid Ali, Head of Export Grievance Cell of Calicut Chamber of Commerce and Industry.

He pointed out that the operations of pure non-scheduled freighter charter service flights are restricted to six airports — Bengaluru, Chennai, Delhi, Kolkatta, Hyderabad and Mumbai. Various chambers of commerce in the State have taken up the matter with the Centre to include Kerala airports in the new policy.

Policy objective

However, sources in the sector told BusinessLine that the objective of the open sky policy which is effective from October 1 is to encourage domestic cargo flights from India. The exporting fraternity here depends mainly on the Gulf markets with options of existing passenger flights with a cargo space for 15 tonnes; special cargo flights operated by Emirates to Dubai, Saudi Arabia, Oman with weekly two service; and ad-hoc operations after Covid by replacing the seats of the existing passenger flights.

The new policy is likely to affect exports from the State especially in the absence of domestic cargo and specialized cargo flights from the State. Kerala exports 150-200 tonnes of fruits and vegetables from the four airports in the State on a daily basis, the sources said.

Chamber plea

The Chamber has contacted DGCA authorities for some clarity, but was informed that the policy was reviewed by the government with a view to ensuring fair and equal opportunity in the air cargo capacity offered by Indian registered airlines, Munshid said.

The movement of exports from the State is facing hurdles after some foreign carrier airlines ceased operations. The dependence on passenger flights has already added to the cost of exports to West Asia by around ₹160-170 per kg against the normal rate of ₹60-70.

Losing competitive edge

Thus, the agri products from Kerala would lose their competitive advantage to the Philippines, Sri Lanka, Thailand commodities in the Gulf markets. This would hit farming communities as exporters have tied up with them for supply. The State government will also lose a portion of its revenue by way of GST on various services, he added.

Sea route

Subair Kolakkadan, the chamber president, said in the absence of cargo flights, a consortium of exporters association have successfully despatched five reefer containers by sea in association with Sharjah International Free Zone Authority, UAE and Oman Chamber of Commerce.

There is an encouraging response to a proposal for re-starting the service in the wake of reduced freight cost at around ₹30 per kg. For Gulf markets, Kerala is a preferred destination for sourcing perishable commoditoes due to its proximity, he added.

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Published on October 13, 2020
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