INCOME BOUNCE.
The lure of luxury goods is catching up with the nouveau riche in rural Kerala
G. K. Nair
Kochi, May 13
In the sun dappled plantation of rubber trees, the gleam of white is striking. Get a bit closer, you realise that the glint is coming off a large SUV, obviously foreign made.
For the first-time visitor to rural Kerala, the presence of the vehicle and the setting may be surprising. But not for the locals, who have been buying up vehicles on a scale scarcely seen elsewhere in rural India.
Luxury cars of German and Japanese make, SUVs/MUVs, and medium and small-cars of indigenous manufacturers in Kerala's villages and towns seem to be overtaking the vehicle population of many an urban centre, thanks to the zooming natural rubber and cardamom prices. And not just cars, sales of consumer durables, jewellery and gourmet food items are soaring in the rubber/cardamom-growing districts, according to major dealers.
However, Kottayam, the latex district of the country, with most of its land area under natural rubber, topped in sales in all segments followed by Pathanamthitta, Kollam, and Idukki. Of an estimated one million rubber growers in the country, the majority are in these districts.
The average cardamom price has been ruling above Rs 1,000 a kg for the past several months though prices have been remunerative for about three years now, a grower said.. According to a Kottayam-based dealer, the response has been tremendous to a special sales promotion scheme under which “a household with an annual income of Rs 2 lakh is offered a Maruti car through bank finance.” State Bank of India and its subsidiary, State Bank of Travancore, are in the forefront of vehicle financing in this belt. No repayment default has been reported so far, banking sources said.
In 2009-10, car sales in the rubber-cardamom belt rose a whopping 76 per cent over the previous fiscal; the key beneficiary has been Maruti, which drove away with 31 per cent of vehicle sales.
But, those in the lower middle and middle income groups go for cars in the Rs 2-4 lakh price range. They settle for the Alto, the Wagon R, the Chevrolet Spark, the Hyundai i10.
The upper middle income set plumps for the A Star, the Esteem, the Swift, the SX 4, the DZire, the Aveo, the Fiat Punto, the Ford or the Xylo.
A major dealer told Business Line that most cardamom growers preferred SUVs considering the hilly terrain they operate in.
Also, upper and high income groups own more than one vehicle, the second usually being a luxury car or an SUV. About 50-60 Hondas and 40-50 Toyotas are sold a year in Kottayam and Pathanamthitta districts. According to a major Kottayam dealer, Benz and BMWs also find buyers here.
Rubber incomes
The income from natural rubber, which is hovering around Rs 150 a kg, is significantly high. According to official sources, from 15 trees one can get one kg of sheet rubber, though growers put the number varyingly at 20-30 trees.
Usually, 200 trees are planted on an acre and tapping starts from the seventh year of planting. The daily rubber output from one acre is 7-10 kg, a grower estimates. Tappers are paid 75 paise a tree and one person can easily tap up to 600 trees daily. The prosperity of the tappers is evident from the fact that many arrive at plantations by two-wheelers early in the morning, work till noon and go away.
“For the last two years, rubber cultivation has become profitable. Last year, despite the recession, prices went up,” Mr J.K. Thomas, Managing Director, Malankara Plantations, told Business Line. Compared to three years ago, rubber prices are up 150-200 per cent.
They were hovering around Rs 100 in 2007 and are now above Rs 150, he said. Going by the kind of income rubber growers are getting now, there is certainly a change in their lifestyle. It is evident from the sale of cars in Kottayam. Until a few months ago, if you booked a car, you could take delivery the next day. But now, you have to wait for one-two months,” said Mr Thomas, a former President of United Planters Association of Southern India (UPASI).
Besides cars, sales of consumer durables too have gone up by 35-50 per cent, Mr Sathya Chandran Nair, a major dealer told Business Line. Attributing this growth to high prices for natural rubber, he said sales of air-conditioners had increased substantially. Home UPS/inverters are flying off shelves to beat the power outages. Sales of small home gensets have also gone up.
Mushrooming of mega jewellery shops in the major rubber growing districts is also an indication of increased disposable income among the people. As an icing on the cake come the remittances from those working in other States or abroad.
Spot rubber prices improve
Kottayam, May 13
Spot rubber market showed signs of improvement on Thursday. According to sources, the prices surged following sharp gains on the TOCOM. The market was also moderately bullish on the NMCE. On the spot market, sheet rubber firmed up to Rs 155 from Rs 152 a kg on fresh buying and short-covering. The trend was mixed.
Futures gain
RSS 4 improved at the May futures to Rs 153 (151.10), June to Rs 154.05 (152.77), July to Rs 154.30 (152.89) and August to Rs 151.31 (150.62) a kg on the National Multi Commodity Exchange. The May futures bounced back to ¥351/Rs 170.56 (¥333), June to ¥326.5 (¥312), July to ¥294.1 (¥287.1), August to ¥279.3 (¥272.9), September to ¥269.9 (¥262.7) and October to ¥269.4 (¥262.3) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. Spot rates were (Rs/kg): RSS-4: 155 (152); RSS-5: 151 (147.50); ungraded: 148 (144); ISNR 20: 138 (139) and latex 60 per cent: 97 (97).
Rubber Falls as Much as 3.3%, Erasing Gains Earlier This Week
May 14 (Bloomberg) -- Rubber futures fell as much as 3.3 percent and are headed for their third decline this week.
October-delivery rubber slumped to 260.6 yen per kilogram on the Tokyo Commodity Exchange and traded at 262.4 yen at 9:20 a.m. local time. The contract climbed 2.7 percent yesterday and is barely changed for the week.
No comments:
Post a Comment