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Plantation sector under threat in Kerala

26 Sep 2014

KOCHI, INDIA(Commodity Online): Kerala, the Southern Indian state, is harrowed by the fall in prices of tea, cardamom and rubber. As the state’s plantations accounts for 46% of India’s total output, the situation is grave. Traders are foreseeing a halt in the operations in many plantations in the near future, putting the lives of farmers in the state at peril.

Low demand and increased supply has been pushing down the states plantation commodities. Traders say the price of tea has suffered a dip of 30%, rubber 40% and cardamom witnessed a fall of 50%. The rubber price was at Rs 120.50/kg on Thursday. The price of tea is in the range of ’55-157/kg against Rs 80-200 per kg during the same period last year. Cardamom price is around ‘870/kg now.

Weak demand from top consumer China and the pressure of over supply are still driving the global rubber prices. The prices plunged deeply in global markets this week with Bangkok market recording a price below Rs100 mark for the first time in seven years. Traders say the trend is likely to continue in near future.

Kerala has recently sought the intervention of Prime Minister Narendra Modi to implement immediate measures to curb the import of rubber as the farmers are in distress due to falling prices.

Oommen Chandy,Chief Minister of Kerala , sought the Centre’s directive making the use of rubberised bitumen mandatary in the constuction of national highways. “In the interests of rubber farmers, the government should raise import tariffs on natural rubber. The Centre could also encourage NHAI to utilise natural rubber in its roads,” Chandy wrote to Modi.

He reiterated the state’s demand for a Rs 1,000-crore stabilisation fund for crops like rubber. To support rubber farmers, the state government, though subsidiaries Rubbermark and Marketfed, has been procuring rubber at Rs 2 per kilo mark-up over the market price identified by Rubber Board.

At present India impose a duty of 20% on rubber imports and has ruled any hike in the import tariff. Earlier this month, Rubber growers in India’s Karnataka has urged the government to hike import duty on natural rubber to 75%.

According to the Rubber Board data, India produced around 51,000 tonnes of rubber in August 2014 against an output of 69,000 tonnes during the same period last year. In July India’s rubber output has been at 59,000 tonnes a rise of around 28%.

Production during April and August in the current financial year, is 277,000 tonnes against 265,000 tonnes in the same period last year. This signals a 4.5 per cent surge in output. According to the Rubber Board estimate India is likely to produce around 820,000 tonnes rubber in this financial year, compared to 835,000 tonnes in 2013-14.

– Commodity Online

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