The depreciating of rupee has made exporters happy but Import
dependent firms like steel, coal and oil marketing firms face hugely higher
costs now.
Steelmakers who depend on coking coal are quaking at their
import bill as the rupee weakens. But that could get offset by the softening
input prices of coking coal.
They say the rupee has weakened by 11.4 per cent against the
dollar since the beginning of this quarter while coking coal prices have
softened by 15-40 per cent for various grades this quarter.
“We will be definitely impacted by the forex volatility. The
recession may be a temporary phenomenon. The long-term hedging rates do not
suggest this sort of rates prevailing for long,” said Mr C.S. Verma, Chairman,
SAIL.
“We will be cautious on our forex borrowings and may dip
into our cash reserves to meet the requirements. But there cannot be any
strategy to deal with the forex volatility as we have to make dollar payments
on a monthly basis,” he added.
Meanwhile, companies in the power sector have been mostly
floating tenders to procure thermal coal for the whole year. Now, importers are
looking to float tenders in parts i..e. on quarterly or half yearly basis.
Take Coal India, which is in the process of tying up a
10-year pact to import thermal coal from global suppliers. It has incorporated
a provision in the pact whereby coal prices are to be revised every six months,
while maintaining the offered discount rate over the average of Australian and
South African index prices.
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