Indian ship breaking companies suffer losses on Rupee depreciation

MUMBAI(Scrap Monster): Indian shipping companies have recorded a loss of Rs 800-1000 crore during the Financial Year 2011-12 on the back of rupee depreciation against US dollar, according to news reports.

The ship breakers paid money in a period of six months for the deal made during April To September 2011, but the payment was made after October 2011. However, the depreciating of the rupee against Us dollar led to loss of about 800-100 cr for the shop breakers.

As Quoted by Nitin Kanakia, joint secretary of Ship Recycling Industries Association of India (SRIA)on Business Standard,"There has been an increase in work in tonnage, but due to rupee depreciation against US dollar, we have lost about Rs 800-1000 crore in financial year 2011-12."

Jayant Vanani, secretary of SRIA said, "The industry, overall, was doing very well but due to rupee depreciation against US dollar, the industry had to pay more in rupee terms than the amount mentioned at the time of signing the deal."

According to Vanani, "At the time of the deal, rupee price was around Rs 44-45 per dollar and by the time of payment, the rate had shot up to around Rs 50-51 a dollar. This difference hit most of the ship breakers in Alang. "

Also, the instability in rupee rather causes fear of further losing in the coming days, adds the report.