High excise duty, VAT blamed for 100 per cent increase

A.J. Vinayak

Alarming factors

Soaring prices

of copper scrap at Rs 380 per kg in the market has direct impact on copper sulphate.

Big manufacturers

are not keen in manufacturing copper sulphate due to high excise duty and VAT.

Absence of

local players in the manufacture is attributed as another for price rise.

Mangalore, June 4

A 100 per cent increase in the price of copper sulphate has caused concern among arecanut growers. Prices, which stood between Rs 60-75 a kg in the last season, have touched Rs 150 a kg in the current season.

Growers spray copper sulphate on arecanut plants to prevent them from being affected by fruit rot disease.

Reasons

Factors such as the soaring prices of copper scrap in the world market and high excise duty and value-added tax (VAT) on copper sulphate manufacturing units are seen as the major reasons for a 100 per cent increase in the price of copper sulphate this year.

Sources in Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd told

Business Line

on Thursday that the price of copper sulphate was in the range of Rs 60-75 a kg during the last season, when the price of copper scrap was Rs 110 a kg in the market. Now, copper scrap fetches around Rs 380 a kg in the market.

While cooperatives were selling copper sulphate at Rs 150 a kg, private traders were selling it at Rs 160 a kg, they said.

Campco halts production

Added to this, high excise duty and VAT on copper sulphate has kept the big manufacturers away from its manufacturing. Though Campco has a copper sulphate manufacturing unit, it has stopped the production due to some reasons.

"It is very difficult to run the copper sulphate unit by paying 16.32 per cent of excise duty and 12.5 per cent of VAT. However, we have arranged to purchase ISI brand copper sulphate from the open market and distribute them to our grower members at reasonable rates," a source said.

Other factors

Absence of local players in the manufacture is attributed as another reason for the price hike. Various factors such as obtaining licence for setting up a manufacturing unit and the seasonal market for the product prevent local entrepreneurs from venturing into this area.

The President of the All-India Areca Growers' Association, Mr M. Srinivasa Achar, said a grower sprays around 20 kg of copper sulphate mixture on an acre of plantation in the three-month period during the rainy season. While some growers spray twice during the season, some others prefer to spray thrice. The spray, which gives a coating on the tender nut, protects it from rotting. Arecanut growers in the country require around 700 tonnes of copper sulphate for their plantations.

Fruit rot disease

Arecanut growers fear the most when their plantations face heavy rainfall. The reason is the occurrence of fruit rot disease in the plantations. Its occurrence is directly related to production in the coming season.

(This article was published in the Business Line print edition dated June 5, 2006)
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