MARKET DEVELOPMENT
AP Move to Hike Oil Palm Price Could Hurt Us, Says Industry
AP Move to Hike Oil Palm Price Could Hurt Us, Says Industry
13/12/2013 (Hindu Business Line) - The Andhra Pradesh Government’s move to hike the price for oil palm will spell doom for the industry in the country, according to oil palm processors.
Value
Andhra Pradesh contributes more than 70 per cent of both the raw material and the oil in oil palm. In terms of value, the State produces oil worth Rs 800 crore.
The State Government raised the price for cultivators by Rs 609 to Rs 7,516 a tonne, after considering the long-pending demand of farmers.
About 60,000 farmers cultivate the crop over 1.36 lakh hectares in the State.
“The hike announced by Andhra Pradesh would kill the industry. It is not at viable for the industry,” Oil Palm Developers and Processors Association President R.R. Govindan told Business Line.
The calculation done by the CACP (Commissioner for Agriculture Costs & Prices) had not factored in the vital component of development (of nurseries and other crop development activities). “This works out to about Rs 440 a tonne. The Government should at least consider this and add up to the costs,” he said.
Seeks CM Intervention
The association has written to Andhra Pradesh Chief Minister N. Kiran Kumar Reddy asking him to intervene in ensuring a fair pricing formula for the oil palm fresh fruit bunches and avert an emerging crisis.
Cost Ratio
The CACP has considered the cost ratio between the farmers and processors at 75.25:24.75 and has recommended a price accordingly.
But had they considered the developmental charges, the ratio would have been 71:29, Govindan said.
Value
Andhra Pradesh contributes more than 70 per cent of both the raw material and the oil in oil palm. In terms of value, the State produces oil worth Rs 800 crore.
The State Government raised the price for cultivators by Rs 609 to Rs 7,516 a tonne, after considering the long-pending demand of farmers.
About 60,000 farmers cultivate the crop over 1.36 lakh hectares in the State.
“The hike announced by Andhra Pradesh would kill the industry. It is not at viable for the industry,” Oil Palm Developers and Processors Association President R.R. Govindan told Business Line.
The calculation done by the CACP (Commissioner for Agriculture Costs & Prices) had not factored in the vital component of development (of nurseries and other crop development activities). “This works out to about Rs 440 a tonne. The Government should at least consider this and add up to the costs,” he said.
Seeks CM Intervention
The association has written to Andhra Pradesh Chief Minister N. Kiran Kumar Reddy asking him to intervene in ensuring a fair pricing formula for the oil palm fresh fruit bunches and avert an emerging crisis.
Cost Ratio
The CACP has considered the cost ratio between the farmers and processors at 75.25:24.75 and has recommended a price accordingly.
But had they considered the developmental charges, the ratio would have been 71:29, Govindan said.