CHENNAI: As western countries respond to Russia’s attack on Ukraine with unprecedented punitive sanctions against the country, the footwear industry in Tamil Nadu is worried over the effect of sanctions on the $53 million worth of exports to the country, 80 per cent of which is in the footwear sector. Price of sunflower oil, too, which has gone up by Rs 13 per litre in the last one week may hit new highs over the next few weeks, say traders.
As details about the sanctions imposed by Europe and the United States emerged on Friday, footwear companies had a temporary relief as financial sanctions were primarily targeted at Russian oligarchs. According to Israr Ahmed, managing director of Farida Group, the impact of sanctions on the footwear industry may be minimal as they are mostly mild and targeted sanctions. “We don’t expect major disruption except in container movements to Ukraine which seems to have taken a hit,” he said.
But most exporters are still keeping their fingers crossed, as Russia is a significant trading partner of India. While the direct impact of sanctions may be minimal, many companies may be indirectly hit as Russia consumed lot of international products that are manufactured in India and exported from other countries.
The sanctions can also seriously impact sunflower oil industry, and consumers may soon have to shell out more for buying the popular cooking oil. “Get ready for higher prices,” says S Senthilnathan, chairman and managing director of ACSEN HyVeg, an oilseeds importer. India consumes 1.7 million metric tonnes of sunflower oil every year and 90 per cent of it is imported as oil while 2,500 metric tonnes to 3,500 metric tonnes is imported as seeds.
“Of the imported oil, 80 per cent comes from Ukraine alone,” says Senthilnathan. Tamil Nadu consumes 2.53 lakh metric tonnes of sunflower oil every year, he said. Cultivation of sunflower is low across India and hence availability of seeds for oil extraction is also low, Senthilnathan said. He also cautioned the international prices of wheat, cotton and other agriculture products would rise in the international market as Ukraine is one a major producer of these crops.