Kerala’s food-processing companies are facing a difficult Onam season as the ongoing Middle East conflict disrupts exports to the Gulf, one of their most important markets.
Demand for Kerala products such as rice, spices, payasam mixes, banana chips and other Onam delicacies normally rises sharply across the Gulf during the festive season. This year, however, higher logistics costs, shipment delays and uncertainty are putting small exporters under severe pressure.
The Gulf is a major market for Kerala’s food-processing industry, with many companies generating a significant share of their Onam-season sales from the region.
Exports of rice and packaged food from Kerala have faced major disruptions since March as the conflict intensified. More than 100 containers carrying rice, spices and other food products were reportedly stranded at ports or while in transit, causing losses running into crores of rupees.
Several perishable products also had to be discarded after being held up for too long.
A leading Kerala company that produces curry powders and packaged coconut milk has suffered losses running into crores over the past three months. A food-products manufacturer from the Malabar region said a shipment dispatched months ago has still not reached its destination.
With uncertainty continuing in the Gulf market, some exporters are now reluctant to depend heavily on the region for their Onam sales.
The impact is particularly severe on small and medium-sized food-processing companies. Large retail chains can arrange alternative logistics, including dedicated cargo flights, to keep supplies moving. Smaller exporters have far fewer options because air freight can make their products uncompetitive.
The sharp increase in freight costs is also difficult to pass on to consumers. Raising prices substantially could hurt demand, leaving exporters with little choice but to absorb a larger part of the additional cost.
This is likely to squeeze already thin margins.
The short duration of the Onam season makes the problem even more serious. Missing the sales window because products arrive late can result in significant losses, even if the goods eventually reach the market.
For Onam exporters, the biggest challenge is not necessarily the inability to ship goods but the steep rise in the cost of doing so.
Against the backdrop of the Middle East conflict, several airlines have increased cargo rates by around 20-40 percent, according to exporters. Sea freight costs have also risen sharply.
For products with relatively low margins, the additional logistics burden can make exports financially unviable.
Large retailers are taking extraordinary measures to ensure that Gulf consumers do not miss out on the traditional Onam fare.
Two special cargo flights operated for Lulu recently departed from Kochi carrying fruits, vegetables and banana leaves needed for Onam celebrations in the Gulf.
The first flight carried around 45 tonnes of fruits and vegetables, while the second transported about 60 tonnes of fruits, vegetables and banana leaves.
Lulu Fair Exports, which coordinated the shipments, has supplied more than three lakh units of fruits and vegetables to Lulu stores across the Gulf.
The Gulf market has long been a vital lifeline for Kerala’s food-processing and packaged-food businesses. The Onam season is particularly important because demand for Kerala-specific products surges within a narrow window.
But the current disruption is forcing exporters to balance three difficult factors: higher freight costs, uncertain delivery schedules and intense price competition.
While large retailers can deploy dedicated logistics solutions, smaller manufacturers may struggle to protect both their market share and margins.
For Kerala’s food exporters, therefore, this year’s Onam is not merely about meeting higher demand in the Gulf. It is about getting products there on time — and at a cost that still leaves the business viable.
