India's petrochemical markets have been reeling from a rapid fall in the rupee, with the impact greatest on the polymer sector, as buyers in the country shy away and sellers struggle to transfer the increased import cost to domestic sales prices, as per Platts. Petrochemical prices on a CFR South Asia basis have lagged increases in CFR China and Northeast Asia prices, but have led the way down when the other regional CFR prices headed south, according to Platts data.
India's rupee resumed its downward trend against the dollar on Friday, following gains on August 29. The rupee has lost 3.5% of its value in the past week to trade around 66.69 to the dollar August 30 afternoon Indian time, although it was up from a record closing low of 68.80 on August 28. The rupee was down around 10% since August 1, and down nearly 20% since June 1. This in turn hit Middle East polymer producers as they typically export their surplus to India -- one of their main markets -- where buyers were now backing off on the weaker rupee. These Middle East producers were forced to source for outlets elsewhere. For instance, some polymer trading houses in Dubai have been directing their cargoes to buyers in Africa instead of India.
"I have not exported even a kilogram of cargo to India for the past three months as even regular customers do not want to import now," a Dubai-based trader said. "Economies in Africa are doing much better and this probably reflects in their currencies that have not been impacted by the strengthening of dollar." Meanwhile, Indian polymer converters have been lamenting about the falling rupee, and have switched their focus from the import market to the domestic market for feedstock.
04-Sep-13 
