As TN, AP knock Kerala off export perches, earnings fall 8%

KPM Basheer Kochi | Updated on March 12, 2018

With its traditional industries on the decline, Kerala slipped on the export front and its earnings fell by eight per cent in the financial year 2014-15, raising serious questions about the State’s export future.

Exports from Kerala, according to the Federation of Indian Export Organisations (FIEO) figures, were a meagre 2.9 per cent of the country’s total export earnings last year. Kerala’s earnings stood at $9.6 billion last year, down from $10.3 billion in 2013-14.

Negative growth

This is a substantial negative growth of eight per cent, calling for immediate attention from policy-makers, manufacturers, exporters and export promotion agencies.

Kerala’s export basket mostly contains spices, seafood, tea, cashew, jewellery, ayurvedic preparations, agro products and processed foods. Many of these sectors have not been doing well for years. And, significantly, it has been knocked off its traditional perch in the export of seafood, spices and coir. Kerala has all along been No 1 in terms of seafood exports. But, thanks to the phenomenal expansion of vannamei shrimp farming, Andhra Pradesh has now overtaken Kerala in seafood export in value terms. The rising demand for Indian shrimp following supply-side bottlenecks in Thailand, Malayasia and Vietnam over the past few years has led to the mushrooming of vannamei farms in the coastal Andhra region.

Stiff competition

As for spices, which attracted foreign traders to Kerala for more than 2,000 years, Karnataka, Tamil Nadu and Andhra Pradesh are sweating out to overtake Kerala. And, Guatemala and Vietnam are giving stiff competition to Kerala’s cardamom and pepper respectively, too. Because of the abundance of coconut plantations, Kerala has for long been the destination for coir products for foreigners.

But, over the past decade, Tamil Nadu has emerged as the top producer of coconuts. Last year, Tamil Nadu, pushing Kerala aside, came up tops in the export of coir.

The cashew industry, facing multiple challenges of heavy shortage of domestic raw materials, high cost of labour and shortage of labour, is now in a pathetic state. On the export side, Vietnam is now the biggest challenge to Kerala as Vietnam has easy access to raw cashews from African countries, proximity to the huge Chinese market and cheap labour.

Exporters warn that if the authorities do not make quick and drastic course correction, Kerala’s export future, in terms of both volume and value, is headed deep south.

Published on August 09, 2015

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