In 2006-07, Indian stone exports fell by 33% between 2008 and 2009. This industry relies on the US and European markets that were the first to be hit by the subprime mortgage crisis. In 2007-08, India's stone exports plummeted, even before the Indian housing industry slumped.
According to CAPEXIL data, the total value of Indian granite exports in 2008-09 was 2.738 million rupees, and in 2006-07, 4.086 million rupees. The total export value in 2007-08 was 3.367 rupees.
The impact of the subprime mortgage crisis
In terms of quantity, the export of granite in 2008-09 was 3 million tons, 3.1 million tons in 2006-07, and 3.412 million tons in 2007-08. Exports have actually increased in 2007-08, but the growth rate is still lower than the level between 2008 and 2009.
The best explanation for the increase in exports in 2007-08 was that polished granite, which was offered at a higher price, was replaced by its semi-finished products. In the context of a severe economic downturn, the price of semi-finished products is relatively easy to accept.
In 2007-08, exports increased by 10.2 percentage points, exceeding the previous increase, but the export volume fell by 17.6%. As a result, the impact of the subprime mortgage crisis on prices began to show.
In 2008-09, stone exports showed a significant decline in both quantity and price. The total value of exports fell by 18.7 percentage points, and the export volume decreased by 12.1 percentage points.
Dependent on exports
“The demand in the US market has dropped by 80%, and the European market has fallen by 30%-40%,†said Mr R Veeramani, founder of the Indian Institute of Granite and Stone. “In India, about 85%-90% of the granite is exported. ".
The export volume of polished granite blocks and slabs was reduced by more than half in 2008-09 from 275,000 tons compared to 552,000 tons in 2007. However, the total export value of 413,000 tons in 2007-08 fell by 51.9%, which is more than the decline of the whole industry, from Rs. 17,918 million in 2006-07 to Rs. 86,263 million in 2008-09, and 2007- In 2008, it was 13.325 billion rupees.
The plunge in exports was caused by the decline in mining, and secondly, the production activities of stone processing plants depended on some fixed orders, which easily led to the reduction of production by these manufacturers, Mr Veeramani said.
Payment issues
Mr Laxmi Kumar KS said that buyers in the US and European markets are facing a credit crisis and payments are irregular.
Mr Laxmi Kumar said that in July-August 2008, the payment problem began to show signs of bad, and since September, there has been a significant decline. When asked if the payment problem would put pressure on pricing, he said: "The place where there is no buyer is pricing in this case becomes a meaningless issue."
Indian exporters are looking for other markets such as Russia, Ukraine and other CIS countries. Not long ago, I took an industrial delegation to these markets and found that different markets have different needs, and it is very difficult to transfer the resources of one market to another. Some of the products are now being transferred to the domestic market and sales are starting to take place.
However, the market for semi-finished products exported to China has not experienced any depression in other regions. The export volume of granite has increased from 2.147 million tons in 2007 to 2.563 million tons in 2008.
According to CAPEXIL data, the total value of Indian granite exports in 2008-09 was 2.738 million rupees, and in 2006-07, 4.086 million rupees. The total export value in 2007-08 was 3.367 rupees.
The impact of the subprime mortgage crisis
In terms of quantity, the export of granite in 2008-09 was 3 million tons, 3.1 million tons in 2006-07, and 3.412 million tons in 2007-08. Exports have actually increased in 2007-08, but the growth rate is still lower than the level between 2008 and 2009.
The best explanation for the increase in exports in 2007-08 was that polished granite, which was offered at a higher price, was replaced by its semi-finished products. In the context of a severe economic downturn, the price of semi-finished products is relatively easy to accept.
In 2007-08, exports increased by 10.2 percentage points, exceeding the previous increase, but the export volume fell by 17.6%. As a result, the impact of the subprime mortgage crisis on prices began to show.
In 2008-09, stone exports showed a significant decline in both quantity and price. The total value of exports fell by 18.7 percentage points, and the export volume decreased by 12.1 percentage points.
Dependent on exports
“The demand in the US market has dropped by 80%, and the European market has fallen by 30%-40%,†said Mr R Veeramani, founder of the Indian Institute of Granite and Stone. “In India, about 85%-90% of the granite is exported. ".
The export volume of polished granite blocks and slabs was reduced by more than half in 2008-09 from 275,000 tons compared to 552,000 tons in 2007. However, the total export value of 413,000 tons in 2007-08 fell by 51.9%, which is more than the decline of the whole industry, from Rs. 17,918 million in 2006-07 to Rs. 86,263 million in 2008-09, and 2007- In 2008, it was 13.325 billion rupees.
The plunge in exports was caused by the decline in mining, and secondly, the production activities of stone processing plants depended on some fixed orders, which easily led to the reduction of production by these manufacturers, Mr Veeramani said.
Payment issues
Mr Laxmi Kumar KS said that buyers in the US and European markets are facing a credit crisis and payments are irregular.
Mr Laxmi Kumar said that in July-August 2008, the payment problem began to show signs of bad, and since September, there has been a significant decline. When asked if the payment problem would put pressure on pricing, he said: "The place where there is no buyer is pricing in this case becomes a meaningless issue."
Indian exporters are looking for other markets such as Russia, Ukraine and other CIS countries. Not long ago, I took an industrial delegation to these markets and found that different markets have different needs, and it is very difficult to transfer the resources of one market to another. Some of the products are now being transferred to the domestic market and sales are starting to take place.
However, the market for semi-finished products exported to China has not experienced any depression in other regions. The export volume of granite has increased from 2.147 million tons in 2007 to 2.563 million tons in 2008.
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