28 July 2022, New Delhi: The impact of rupee depreciation is crippling the agrochemical and edible oil industries. Companies that manufacture agrochemicals, whose raw materials are generated from crude oil, have temporarily ceased buying raw materials or are buying in cash to meet immediate needs instead of obtaining letters of credit (LC) with banks to import raw materials.
This Kharif, farmers are bearing the brunt of the rupee’s decline as they are forced to pay more for fertilisers due to rising agrochemical costs.
“Currently, we are holding our purchase and making most of what is available with us. We are assessing the situation frequently and taking decisions accordingly. We are planning to buy in cash rather than on LC to avoid further increase in price due to future depreciation of rupee,” said S.K. Chaudhary, founder & director, Safex Chemicals, an agrochemical firm. “Oil price hike is felt twice by our industry as it is not only used in transportation but also in manufacturing of various chemicals such as solvents,” he added.