Cracker industry faces crippling blow due to COVID with low demand, rising costs

Several manufacturers and stakeholders in the industry feel that the sale of crackers is yet to pick up even as the festival is nearing.

Due to the raging pandemic and restrictions on manual labour, it entailed a production loss of about 40 per cent and moreover demand for the finished product is not much on the expected lines, according to T Kannan, general secretary, The Indian Fireworks Manufacturers Association (TIFMA), Sivakasi.

Annually, the festival season would pick up in July and climb to its peak a month ago, but unfortunately COVID-19 had an impact on the economy and livelihood of people. The pandemic has changed nearly every aspect of our daily lives and consumer spending is no exception. Normally, festival celebration, especially Deepavali is not complete without bursting of crackers, for which revelers accord priority, but this year it has been relegated.

When asked whether market uncertainty would result in any curtailing of prices, Kannan ruled out the possibility saying that production costs spiked this year owing to non-availability of raw material from China, from where key raw materials for cracker manufacturing would normally be imported at cheaper cost. As an alternative to China, many manufacturers have relied on indigenous products as raw material for the manufacturing this year. This time, manufacturers could hardly make a profit despite rise in production cost, Kannan told DT Next on Sunday.

According to G Radhakrishnan, former president, TIFMA, COVID scare has made people to think about crackers as the last item or least important in their Deepavali shopping list, most even feel it is not essential for the celebrations. Even the demand is low in retail stores numbering around 500 in Sivakasi alone.

Usually, manufacturers tend to get orders placed from various Northern states for assorted crackers and fancy items from January to March every year and lodges in Sivakasi would be full from April onwards. But it’s not so this year. Adding to the woes, travel e-pass restrictions from other states remained in effect owing to the pandemic situation, he said.

According to M Elangovan, general secretary, Federation of Tamil Nadu Fireworks Traders, only about 40 to 50 per cent of the trade is expected this whole year as restrictions on mass celebrations of Holi, Vishu, Ganesh Chathurthi and Navarathiri caused a big setback for the trade.

About 10 per cent of the total production is sold out in Tamil Nadu during Deepavali season every year. For this season, Elangovan predicted a market potential of Rs 200 crore in Tamil Nadu as against its average potential of Rs 300 crore.