Commodity Exporters Raises Concern over Shipment Disruptions to US

Kerala's exporters, who primarily target US markets, are keeping their fingers crossed that there will be no disruptions in shipments as a result of possible labour protests by the International Longshore & Warehouse Union (ILWU), which controls the US West Coast ports.

Concerned, the exporting community, which includes coir, seafood, spices, cashew, and other commodities, says the situation will worsen if there are disruptions, affecting shipments of several commodities from India.

According to Mahadevan Pavithran, Managing Director of Travancore Cocotuft and a leading coir exporter in Alappuzha, the strike call for a new labour contract is a concern for shippers who are already struggling with supply-chain grid lock on the West Coast ports due to rising Covid cases.

The talks with ILFU, which take place every six years, caused severe labour disruptions and shipping delays in the most recent cycle, which took place in 2014-15. However, it is feared that the surge in pandemic-related imports has overwhelmed container terminals and caused a record backlog of container ships off the ports of Los Angeles and Long Beach this time, he said.

"If the strike occurs, US importers and chain store buyers will exercise caution when placing orders with India," he said. Rising Covid cases in the United States have impacted the procurement of retailers and chain stores, which are reeling as a result of store closures. Many retailers have not fully recovered from the pandemic, and they have been forced to limit their purchase orders from India, he added.

"Right now, the situation at US ports is bad due to delays and congestion." If the strike occurs, the situation will deteriorate," said a leading seafood exporter in Kochi, adding that the majority of India's seafood is shipped to Longshore.

Nuts, Spices Export Hit

In terms of cashew exports, J Rajmohan Pillai, chairman of Beta Group, which owns the Nut King brand, stated that the strike will have little impact because the majority of the cargo, which is negligible, is destined for the US East Coast. The good news is that all of the other major ports in the United States are not taking part in the strike, and the government is working quickly to find a solution. "I personally believe it will not happen because the loss to the United States will be too great with inflation at its peak," he added.

According to a trade intermediary in Mumbai, the strike could disrupt almond imports to India, especially as traders prepare for the upcoming Diwali season. The strike will cause a stock buildup at the point of origin (the United States), and there may be later selling pressure.

"At this stage, the strike call has not caused any major disruption to the spice industry," said the All India Spices Exporters Forum. "However, if it is not resolved soon or lingers on, it could certainly cause a disruption, particularly for cargo on the high seas."