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Weaker rupee shrink importers' margin

Pharma, ceramics players say raw material cost has increased

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The recent depreciation of Rupee against Dollar has increased input costs as imported raw materials or other inputs have become costlier, causing worry for importers in pharmaceutical and ceramic sectors, say industry sources. Rupee has depreciated by over 15 per cent since February this year from close to 63.76 per Dollar to 73.46 on Monday.

Prices of Active Pharmaceutical Ingredients (APIs), basic raw materials for preparing pharmaceutical formulations, has risen by 10 per cent to 500 per cent in six months following stricter compliance of environmental regulations in China, which meets 65 per cent of India's annual requirement of Rs 45,000 crore worth of APIs. Input costs have risen by 10 per cent to 200 per cent, said Chirag Doshi, chairman of Pharmac Exhibition Committee of Indian Drug Manufacturers Association (IDMA) on Monday while announcing the Pharmac India 2018 to be held in Ahmedabad from October 25-27. With close to 3,300 units manufacturing medicines, Gujarat has about 33 per cent share in India's total production of medicines worth Rs 2.25 lakh crore.

"Producers are not incurring losses, but the margin are shrinking," said Doshi.

The weakening of Rupee has made petroleum products costlier, severely affecting Rs 30,000 crore ceramic industry in Gujarat. Natural gas, principal fuel used in the sector, has become dearer by about 42 per cent in six months, while the constant rise in price of diesel has increased the cost of logistics for bringing raw materials and sending finished products, said K G Kundariya, president of Morbi Ceramics Association. "With the rise in energy and fuel costs, we are also forced to increase the price of tiles," said Kundariya, president of Morbi Ceramics Association. With about 90 per cent share in total ceramic production in India, Morbi enjoys virtual monopoly in the sector.

Depreciation of Turkish Lira against the Dollar has nullified the benefit of a weak Rupee in Turkish Market. "Sharp fall of Lira has drastically decreased purchasing power in Turkey, causing our exports to dip," said Yogesh Parikh president of Gujarat Dye-Stuffs Manufacturers Association (GDMA). In addition to being one of the major importers of dye-stuffs from Gujarat, Turkey is also a key transit destination for further exports to central Asian and African countries.

THE DOWNFALL

  • Pharma, ceramics players say raw material cost has increased
     
  • Depreciation of Turkish Lira against the Dollar has nullified the benefit of a weak Rupee in Turkish Market. 
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