Biggies planning to become ASEAN planters to circumvent tariffs
Thrissur: More biggies are planning to invest in direct production of raw materials in the ASEAN countries. In 2010, a major tyre company had started rubber cultivation in 10,000 acres in Laos. The industry majors, attracted by the cheap labour and easy policies, may soon resort to this technique by leasing land on a larger scale opening the doors to agricultural migration opportunities across ASEAN.
The political instability of ASEAN countries is one of the dampeners. The military junta in Thailand had collected rubber at prices above those prevailing in the market when the overall rubber prices fell. But later they dumped the same in the market bringing the prices crashing down.
It is also a matter of concern that the import tariffs on several agricultural products will be removed by 2019. The import tariffs on coffee, pepper, palm oil and tea has been reduced from 100% to 37.5% from January 1, 2017. With this the market has seen large inflow of pepper from Vietnam and Sri Lanka.
Kerafed had stopped collection of coconuts from farmers by the end of 2016. With reduced productivity, large amounts of coconuts flowing in from other states and situations more conducive for large scale import of palm oil, the coconut farmers may have more bad news coming up.