The outbreak of coronavirus (COVID-19) in China has hampered coir exports from Pollachi, resulting in steep loss in business worth Rs 1,000 crore to the coir manufacturing units over the last one month.
China is India’s top coir export destination. “Almost 80 per cent of the coconut fibre produced in Pollachi is exported to China and only 20 per cent is for domestic market. Up to 400 containers of fibre from Pollachi have been stagnating due to suspension of exports. On a daily basis about 30 containers used to be shipped to China from Chennai, Thoothukudi and Kochi ports. Ever since corona began to spread, China has stopped import of fibre and its industrial units continue to remain shut over the last two months,” said SK Gowthaman, member, Coir Board, and president of the Coimbatore District Coir Fibre and Allied Products Manufacturers Association.
China mainly uses the fibre to manufacture value-added products and in turn export them to various countries, including India. It’s usual to stop exports every year during the Chinese lunar festival holidays, but the stalemate has prolonged this year following corona outbreak. If not China, the coir units in Pollachi are left with no other alternative markets to export fibre.
“Pollachi saw a boom in coir industry when China began to import coir 10 years ago. From about 200 units, the number of coir manufacturing firms more than doubled to 450 only after China began to procure fibre from Pollachi for making value-added products. But, now with the slowdown, these units are staring at uncertainty and thousands of workers are likely to be rendered jobless in the sector,” he added.
About one lakh workers earn their livelihood by working in the coir units either directly or indirectly. “If coir production continues to be in trouble, then thousands of workers may lose jobs due to lack of work and may even migrate to other sectors. Already only 10 per cent of the coir units are functioning, while others have stopped their operations due to existing stalemate in exports,” said D Duraisamy, a coir manufacturer.
Though value-added products made out of coir are seeing a spike in demand due to increasing awareness among public on using eco-friendly items, the factories in Pollachi lack modern infrastructure to manufacture them to global standards.
Manufacturers say that there is more scope for growth in coir production, but the government has to support these units in marketing and modernisation.
A large number of value-added products from processed fibre ranging from beds, mattresses, decorative items are in high demand in foreign countries. The husk extracted from the coconut farms, spread over an area of about 1.25 lakh acres, is processed to be made into coir products. Pollachi in Coimbatore tops in coconut production in Tamil Nadu.
The 450-odd coir units are located in areas including Pollachi, Kinathukadavu, Anaimalai and Negamam areas. Huge loads of coir manufactured for exports have now begun to stagnate resulting in a drastic lowering of its prices. Price of a 30-kg bag of coir has dipped from Rs 350 to Rs 270 following a halt in exports to China.
The sudden setback in exports has come as a huge blow to the coir manufacturers. Exporters say that it may take at least a few more months for the Chinese industries to resume production. They are yet to even pay the dues for coir products shipped already, rued exporters. “Most of the coir manufacturers are into this business by availing of huge loans from banks. The government should intervene and ensure that the manufacturers should not be put under pressure to pay loan dues until the situation resumes to normalcy. The coir units should also be given subsidy to purchase coconut husks, 25 per cent subsidy for electricity and cancel 5 per cent GST for coir pith manufacturing and reduce 18 per cent GST for coir machinery to 5 per cent. We have already made an appeal to address our issues to the Centre,” said Gowthaman.