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Why plantation industry is vital for South India
Sep 13, 2017
The plantation industry in South India plays an integral role in the economy of three States – Tamil Nadu (tea), Kerala (rubber, coffee and spices) and Karnataka (coffee) – as it accounts for over 60 per cent of the country’s 19-lakh hectares under plantation crops.
Moreover, considering that a vast majority of growers are small and marginal farmers, the functioning of the industry becomes crucial, as it can impact the life of around 12.5-lakh growers and an equal number of labourers who depend on the plantations for permanent employment.
Value realisation of the various plantation commodities has seen highs and lows, as it is impacted by the global price movement.
Recent moves show that the estimated value of plantation commodities in 2016-17 was Rs.44,581 crore, out of which South India’s share was roughly 60 per cent.
After registering a decline in crop production for two years in a row, South India’s tea production appears to have gained some momentum during the first seven months of 2017 due to better climatic conditions.
The total crop as at July-end is estimated at 598.8-million kg (up from 574.6 mln kg during the corresponding period the previous year), with the South accounting for a 12.8 per cent increase (from 121.1 mln kg up to July 2016 to 136.6 mln kg till July 2017). The crop in the North was higher by less than 2 per cent at 462.2 mln kg (453.5 mln kg).
On the export front, India’s tea exports till July 2017 grew 4.6 per cent to 121.1 mln kg.
Destination-wise export of Indian tea confirms that we have lost some major destinations such as Pakistan, UK, Russia/CIS and Kenya, but reported gains from Iran and Netherlands. The latest trend suggests a turnaround in export volume and value realisation.
A noticeable aspect on the import front was the shift in the origin of imports. During the previous phase, Vietnam and Indonesia were the principal origin of imports, whereas since 2012, Nepal and Kenya have turned out to be the major source.
The import quantum from Nepal in 2016 was estimated at 12.17 mln kg, accounting for around 58 per cent of the total imports.
The latest trend in domestic price (January to mid-August 2017) indicates negative sentiments. The price fall in South India was more pronounced, particularly after the introduction of GST in July, with the industry contending that there is no clarity in the billing system, and also with major packeteers abstaining from the auctions in the South.
Domestic coffee production in 2016-17 was initially projected at 3.20-lakh tonnes, before the downward revision to 3.12-lakh tonnes (post-monsoon estimate).
Despite the drop in production, coffee exports from India showed signs of improvement – both volumewise and valuewise. The premium position of Indian coffee in the world market further helped regain the market share by increase in the value of coffee exports.
Indian rubber production registered a decline as growers abandoned tapping operations due to rise in production costs. But the situation is showing signs of improvement as the production is improving.
This is evident from the April-July 2017 production figures. It was higher by 14,000 tonnes at 2.01-lakh tonnes.
Consumption data published by Rubber Board suggest an increase of 50,000 tonnes to 10.44-lakh tonnes. Imports also have slipped and is estimated at 130.54 thousand tonne.
India is the second-largest producer of cardamom. The output, though, depends on prevailing climatic conditions, as cardamom plant requires intermittent spells of rain and good sunshine during the growth stage.
The crop production declined in 2016-17 to 19,625 tonnes from 23,890 tonnes the year before.
The Hindu Business Line
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Agricultural & Processed Food Products Export Development Authority
(Ministry of Commerce & Industry,
Govt. of India)
NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016
Phone : 91-11-26513204, 26514572, 26534186
Fax : 91-11-26526187