Rising Steel price and strong currency, double whammy for Steel MSMEs: TMA International

New Delhi, Apr 20 (KNN) The sharp rise in the rupee against the U.S Dollar along with a big rise in steel prices is causing a lot of distress among the industry.

Talking to KNN, Pankaj Bansal, Director of TMA International said “Steel is the basic raw material for a lot of industries, with its prices going up, the input cost have increased tremendously which is a major drawback for the sector”. He further added that the Global trade is happening at a slower pace than expected, because of which these indicators look more alarming than ever before.

Bansal, a MSME exporter, highlighted the problem of the deprecating domestic currency. “We estimated a nominal shift in the currency exchange rate, but a rise of almost 5.26 per cent has started creating problems in getting new orders” he added.

He explained the gravity of the situation that because of these developments, the shipping costs have gone high; Clients are not willing to pay more prices to the Indian exporters.

The exporter grieved that the MSMEs function on small scale and have already started to incur losses due to this. “MSMEs form almost 60 per cent of the share in the industry; the prevailing instability is not a good indicator, especially considering the fact that the government earlier this year announced the target of achieving 500 billion USD through exports,” he explained.

He informed that the associations have been voicing their concerns with the Commerce Ministry.

Also earlier this week the Engineering Export Promotion Council of India (EEPC) too had approached Commerce Secretary Rita Teaotia with similar concerns. (KNN/ DA)

COMMENTS

Som Sachdeva 21/04/2017 5:02 AM

Karnal is renowned for manufacture of Agricultural Implements since independence and has now spread its wings globally. The main content raw material for this Industry is Iron & Steel and the Spring Wire. During the recent past the rates in the Iron & Steel market have gone up exorbitantly and so much so there is acute shortage of High Carbon Wire Rod from the main producers, manufacturing High Carbon Wire Rod in the country viz. M/S TATA STEEL LTD., M/S JSPL, M/S USHA MARTIN LTD. and M/S MUKAND LTD. PSUs like SAIL & RNIL are not producing High Carbon Wire Rod for this Industry, although the requirement is around 1000 MT per month at Karnal itself. This Industry has not received any supply for the last about one month, hence the production of Cultivators is suffering. Further there is no production in pipeline for the next about 20 days, as is learnt. The critical shortage of High Carbon Wire Rod is hovering upon around 100 units of Agricultural Implements Industry at Karnal. The farmer community in the country shall also face the bad music of this shortage during the ensuing ploughing season, just after the wheat harvesting. Under the circumstance, the authorities are cautioned to take stock of the situation to control the Steel Prices in the market and at the same ensure regular flow of High Carbon Wire Rod either from the main producers named above or else impress upon the PSUs like SAIL and RINL to manufacture High Carbon Wire Rod also to bridge the gap in supply position in the market. KAIMA Association, also approached Steel Minister to seek appointment from Ch. Birender Singh, Hon’ble Minister for Steel , to elaborate the ground reality so as to have a remedy and come of the dilemma.

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