Commodity exporters wary over shipment disruptions to US

V.Sajeev Kumar | Updated on: Feb 19, 2022

Coir, seafood, spices, cashew shipments especially to US West Coast ports may be hit

Kerala’s export fraternity, focusing mainly on the US markets, are keeping their fingers crossed over the possible disruptions in shipments in the wake of possible labour protests by International Longshore & Warehouse Union (ILWU) which controls the US West Coast ports.

Voicing concern, the exporting community comprising coir, seafood, spices, cashew, etc say the situation will worsen if there are disruptions, hitting shipments of several commodities from India.

Mahadevan Pavithran, a leading coir exporter in Alappuzha and the Managing Director of Travancore Cocotuft, told BusinessLine the strike call for a new labour contract is a concern for shippers who are already struggling with supply-chain grid lock on the West Coast ports due to rising Covid cases.

The talks with ILFU that happen every six years have led to severe labour disruptions and shipping delays in the last cycle in 2014-15. However, it is feared this time that the surge in pandemic-driven imports has overwhelmed container terminals and triggered record backlog of container ships off the ports of Los Angeles and Long Beach, he said.

Rising Covid cases

“If the strike happens, the US importers and chain store buyers will be careful in placing orders with India”, he said. The rising Covid cases in the US have hit the procurement of retailers and chain stores there, which are reeling under due to closure of shops. Many of the retailers have not fully regained to the pre-pandemic business and they were forced to limit their purchase orders from India, he added.

“Right now, the situation is bad at the US ports due to delays and congestions. If the strike happens, it will be worse”, a leading seafood exporter in Kochi said, adding that bulk of India’s seafood goes to Longshore.

Nuts, spices export hit

As far as cashew exports are concerned, J Rajmohan Pillai, chairman of Beta Group, which owns the brand Nut King, said that the strike will have little impact on cashew shipments as most of the cargo which is a negligible quantity is going to US East Coast. The good news is that all the other major ports in the US are not particularly participating in the strike and the government is moving swiftly to find a solution. “I personally think it will not happen as the loss to the US will be too high with inflation at its peak“, he added.

A trade intermediary in Mumbai said the strike can disrupt almond imports to India especially when traders are eyeing for the upcoming Diwali season. The strike will create a stock build up at the origin (the US) and there could be selling pressure later.

“At this stage the strike call has not created any major disruption to the spice industry but if it is not resolved soon or it lingers on, then it could certainly create a disruption especially for cargo on the high seas”, All India Spices Exporters Forum said.

(The report has been modified to correct an erroneous mention about a strike. The error is regretted)

Published on February 15, 2022
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