War stalls farm exports, produce floods local markets
NAVI MUMBAI, March 11 -- The escalating conflict in West Asia has hit India's agricultural exports, with hundreds of containers bound for Gulf markets stranded near Navi Mumbai and exporters scrambling to offload perishable cargo in local markets such as the APMC market in Vashi.
The disruption is being felt most acutely in shipments to Gulf countries-a major destination that accounts for 21.8% of India's agricultural and food exports-just as demand peaks during Ramzan.
With shipping routes through the Strait of Hormuz now uncertain, vessel movement has slowed and freight costs have surged, traders said. Hundreds of containers loaded with fruits and vegetables bound for Gulf markets are stranded at the Jawaharlal Nehru Port Authority (JNPA) and the nearby Centralised Parking Plaza.
Exporters say rising war-risk insurance premiums and rerouting costs have sharply increased logistics costs. Spot freight rates for a 20-foot container to Dubai, which normally range between $200 and $450, have surged by nearly 1,400%.
"Shipping lines are constantly reassessing routes; and in some cases, freight costs have touched as high as $10,000 per container. It has completely squeezed our margins," said Ankush Kadam, a Navi Mumbai-based exporter. He added that daily plug-in charges for refrigerated containers carrying bananas and grapes are now Rs.8,000-Rs.15,000, up from about Rs.4,150.
To provide relief, JNPA waived 80% of plug-in charges from February 28 to March 14. According to the port authority, coordinated efforts have reduced stranded perishable containers from a peak of 2,000 on March 1 to around 1,000.
With exports stalled, traders are diverting consignments meant for the Gulf to domestic markets to prevent spoilage. "Exporters are unsure about shipment schedules, and many consignments meant for the Gulf have been temporarily held back. This affects the entire supply chain from farms to mandis," said Pradeep Sawant, a wholesale trader at the Vashi onion and potato market.
On Tuesday, four containers of export-quality onions stuck at JNPA were sold at the APMC wholesale market. "To prevent them from rotting, we brought them here for domestic sale. Because of the sudden influx, this export-grade onion is now available at just Rs.9-10 per kg," said trader Ram Chalke.
While perishables are flooding local markets, dry fruit imports have dropped 30-40%, pushing prices up by about 15%, said Dinesh Dang, managing director of Kandhar Traders at APMC Vashi.
"Earlier, supplies from Afghanistan came via the Attari border, but that stopped. The alternative route via Iran's Chabahar Port is now also closed due to the war," he said.
Even if hostilities cease, recovery may take 60-70 days, Dang said, adding that rising import prices could boost demand for domestic alternatives such as walnuts from Jammu & Kashmir and raisins from Sangli and Bijapur....
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