High production costs eat into price benefits

High production costs eat into price benefits
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First Published: Sun, Sep 07 2008. 10 35 PM IST

Pick of the season: A woman plucking tea leaves in a Darjeeling tea garden. Tea production in the country rose to 476,000 tonnes between January and July, from 459,000 tonnes in the year-ago period. I
Pick of the season: A woman plucking tea leaves in a Darjeeling tea garden. Tea production in the country rose to 476,000 tonnes between January and July, from 459,000 tonnes in the year-ago period. I
Updated: Mon, Sep 08 2008. 10 48 AM IST
Coonor: Better price realization in plantation crops such as tea, coffee, rubber and spices has given the sector some comfort, but high production cost still remains a concern for the United Planters Association of Southern India, or Upasi, that is set to start its 115th annual conference on Monday.
Pick of the season: A woman plucking tea leaves in a Darjeeling tea garden. Tea production in the country rose to 476,000 tonnes between January and July, from 459,000 tonnes in the year-ago period. Indranil Bhoumik/Mint
Around 1.62 million ha. of land is under plantation crops in India and some 1.44 million growers and 2.29 million labourers are involved in the sector. During 2007-08, the total value of plantations was estimated to be around Rs18,120 crore, close to 2% of India’s agricultural gross domestic products or GDP.
According to Upasi president D. Maheswari, global coffee production during 2008-09 is expected to be around 140.6 million bags, compared with 122.4 million bags in the previous year. Each bag contains 50kg of coffee. The Coffee Board, the government trade promotion agency, has, on post-blossom scenario, estimated production to be at 293,000 tonnes against 262,000 tonnes the previous year.
During April-July, exports rose to 79,869 tonnes worth Rs888.23 crore compared with 73,688 tonnes worth Rs645.74 crore in the year-ago period.
In sync with the global trend, the prices of coffee have gone up in India. The price of the robusta variety rose to Rs94.93 per kg during April-August from Rs74.01 in the corresponding period last year, while the prices of arabica variety rose to Rs111.19 from Rs93.93.
In the case of rubber, prices zoomed up to Rs140 per kg last week. Between January and August this year, domestic rubber prices have veered around Rs115.72 per kg against Rs88.72 last year. During this time, international prices have been Rs121.44 per kg against Rs94.77.
Rubber production in the country has jumped 30.6% in the same period to touch 239,000 tonnes tonnes against 183,000 tonnes last year.
Kenya, a major tea producer, has reported a fall in production but in India, tea production during January-July went up to 476,000 tonnes, from 459,000 tonnes in the corresponding period last year. Exports during this period too have gone up to 105.6 million kg, worth Rs1.096.4 crore, against 89,000 tonnes last year, valued at Rs910.3 crore. The price realization at the auction centres across India has been higher at Rs76.40 per kg against Rs65.80 last year.
Pepper and cardamom prices too have increased substantially with the former ruling around Rs600 per kg, about 20% higher than last year’s price. Between January-August, the price of pepper has been Rs143.95, against Rs134.18 last year.
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First Published: Sun, Sep 07 2008. 10 35 PM IST