War to cast shadow on Indian pharma, other sectors
Major impact in store over next 3 mths as Ukraine is major supplier of Palladium; We expect strong disorder in supply chain system will hit us badly, says Jawaharlal Nehru Pharma City; Further, mango exports to take a hit
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Bitter Pill
- JNPC exported $131-mn worth pharma products to Ukraine
- Supply disruption will increase raw material prices
- Freight costs turn unsustainable
- War will impact exim trade with EU as well
Visakhapatnam: If not immediate, the long-term fallout of ongoing war between Ukraine and Russia has created serious concern among the investors. Top executives fear that the impact will be felt more on the pharmaceutical sector.
When Bizz Buzz spoke to few experts in Andhra Pradesh on Monday, it's observed that the general fear that the fuel prices are bound to increase after the elections in Uttar Pradesh due to surge in global crude rates. On the whole, the impact will be felt on all the sectors by pushing the inflationary trends further. The market will continue to remain volatile due to adverse effects on the investor sentiments.
"The war will have a heavy toll on the Indian pharmaceutical industry. Prior to war, we used to export $131 million pharma products to Ukraine. Though there will not be any impact in next two to three months due to the supply chain in place, it will hit us badly," Jawaharlal Nehru Pharma City (JNPC) CEO PP Lal Krishna said.
He said Ukraine is a major supplier of palladium. Difficulty in getting it from there may lead to increase in raw material prices. Palladium is a chemical element needed as a catalyst for production of several life-saving drugs made for neuropathic pain, anti-inflammatory, anti-hypertension, anti-angina, heart stroke and embolism and Alzheimer disease. Import of Palladium from alternative markets will cost more for the pharma manufacturers. Another CEO of a pharma company said there are apprehensions that the war impact might lead to an increase in the cost of pharmaceutical products in the domestic market.
Neeraj Sarda, CII AP Vice-Chairman and Deputy Managing Director at Sarda Metals & Alloys Ltd, said that after the ebbing of Omicron and world returning to normalcy, the Russia-Ukraine conflict has come as a big shock to the global economy.
He said: "the sky-high crude prices and the uncertainty in the whole European continent will prolong economic recoveries worldwide and will add to disruptions in global trade and inflationary pressures especially on India due to unsustainable freight costs."
G Sambasiva Rao, MD, Sravan Shipping Services, added that "the ongoing conflict will lead to disruption in the export-import business with mango exports suffering a lot. The logistics cost will go up and anticipating the breaking out of the conflict due to warmongering, container supply for cargoes bound and originating from the affected countries were stopped well in advance. Every sector has to bear the brunt of the uncertainties ahead."
