In the past two months, the rupee has depreciated by almost 2 per cent. Exporters and analysts are expecting weak rupee to help in boost exports and support prices of agriculture commodities. Farmers are likely to benefit from getting higher prices for their produce.
Contracts for commodities such as Basmati Rice, Groundnut, Soyabean meal, Cotton and Mentha Oil, the harvest of which will begin in the next one month, are currently being signed by exporters. These are usually signed in dollar terms and with the local currency ruling low, exporters will get more rupees for the dollar earnings.
A week rupee is good for those commodities which are exported from India like Cotton, Pulses, Guar Gum, Mentha Oil, Spices, etc. The weak rupee may give support to falling agri commodity prices, however, this may also a cause of inflation.
In the domestic market, prices of commodities like Guar Gum appreciated by 14 per cent, while Cotton prices appreciated almost 5 per cent.