Despite increasing exports, coir industry in the state is witnessing declining price and profit margins. While the industry expects production to increase by 5% in the later of the FY, with exports and sales increasing by 10% each, all other parameters are expected to remain the same. Industry insiders also expect the inventory level, capacity utilisation and employment level also to remain same in the short run due to strengthening of the rupee.
According to figures provided by the Coir Board, the sector has lost Rs 57 crore between April and October due to the appreciation of the rupee against the dollar. The unit realisation for exports has dropped by almost Rs 5,000 per tonne during the period April-October 2007-08 as compared to the same period last FY. These facts were also brought out by a study conducted by the Confederation of Indian Industries (CII), which states that impact of the currency fluctuation is significant.
Poor credit facilities and infrastructure bottlenecks are a major concern of the exporters.
Availability of raw materials is also turning to be a major problem for the industry.
Supply of husk has been greatly reduced with increased use of tender coconut and demand for husk from brick and sugar industry.
However, for the long run, the industry has an ambitious target of achieving export revenue of $15 billion within 5 years by modernising the industry.