![]() To make matters worse, a global shortage in the supply of commodities produced by Ukraine and the heavily sanctioned Russia has sent inflation spiralling to unprecedented levels across economies. The war waged by Russia on Ukraine, raging for four months now, has led to capital flight towards safe-haven assets in the US, leading to a fall in most global currencies. Demand destruction will happen if there is 10 percent fluctuation.” Even if I get my components from Mumbai or Chennai there could be such a fluctuation since my freight component will increase. “I don’t see a reason to raise my blood pressure over this,” he said, adding, “As such, a 1 to 2 percent fluctuation keeps happening in businesses. Kedia says that while a drop of 1.5 rupees in the last two months sounds like a lot, in percentage terms it is only 2 to 3 percent and, while that pressures his margins for some months, he expects things to stabilise after that. It has already tested a record low of 80.0575 twice this week, recovering when the Reserve Bank of India stepped in to support it. The rupee has fallen rapidly to 79.97 a dollar – from 77.64 at the end of May and 74.55 on February 23, a day before Russia invaded Ukraine. “Unless it falls to 85-a-dollar levels… then we will be in trouble,” he says. Kedia says if the rupee falls further in the coming days, he may have to compromise on profit margins for a few months, but the long-term impact on his business will be negligible. Raw material prices have normalised, and a similar depreciation in the currencies of his trade partner China have helped offset the hit to his business from the rupee’s fall. ![]() A surge in the cost of imported raw materials – metals and plastic – and a plummeting rupee slashed its profit margins drastically.īut when asked if there is a panic now that the rupee stands at the threshold of 80 to a dollar, and may soon fall further, Managing Director Neeraj Kedia says he isn’t losing sleep over it. ![]() Mumbai, India – Chakradhar Chemicals, a medium-sized company that manufactures micronutrient and soluble fertilisers and farm equipment, has braved a lot so far this year.
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