Despite increased investment, I anticipate a serious fall in profit margin, says a trader
For the small and medium flower vendors on Sattara Street, the hub of flower market at Srirangam, running the trade has not been a bed of roses for the past seven to eight months, ever since the inflation started registering its upward trend.
Be it capital, labour wages or cost of raw materials, every single thing matters much for these traders who have been bearing the brunt of the spiralling prices. These small time traders rely solely on wholesale dealers who procure flowers from the grass-root producers. “A major problem is the huge jump in the quantum of capital for purchasing flowers from the wholesale dealers,” they say.
Fixing of prices by wholesale dealers, in turn, depends on arrival of flowers from interior villages such as Ettarai, Kuzhumani, Seerathoppe and Irungalur in Tiruchi district besides distant villages in and around Ottanchathiram, Dindigul and Hosur.
The inflation has had an adverse impact in terms of capital. “Navarathri is one of the important festivals with an assured seasonal profit in our trade. But, this season, I have to invest Rs. 2 lakh as against Rs. 1 lakh last year,” says S. Mahendran, a flower trader. An irony is that, despite increased investment, he anticipates a serious fall in his profit margin. “Against last year’s profit of Rs.10,000, I expect to get just Rs. 15,000,” he says, explaining the compelling circumstances that force him to shell out a huge sum of money on other expenditure.
Rise in labour wages has been eating into his profit margin this year. He has to incur a huge expenditure of Rs.35,000 towards wages, lunch expenses and snacks for a team of 10 labourers. “The cost of even commonly available raw material, the banana fibre, has shot up. The price of a bundle (‘kathai’) of the fibre with 15 long pieces (‘pattai’) has doubled from Rs. 20 last year to Rs. 40. Mr. Mahendran, who has been in the trade for the past 25 years, says he had never witnessed such a steep increase in prices of flowers, wages and capital — all simultaneously. The purchase price per kg of ‘sampangi’ flower, for instance, has shot up to Rs.80, as against Rs.70 a few days ago.
The trader says he had increased the price of a garland from Rs.20 last season to Rs. 30 to Rs.40 this year. “Despite doubling the sale price, I have not been able to cope with the inflation, because of the overheads including maintenance and rental charges,” he says.
The only solace for him is that the arrival of flowers at the wholesale market has, of late, been steadyA section of these small traders is also skilled in decoration of marriage halls. Their skill fetches them a good income during non-festival seasons. “Here again, as fate would have it, we have been chased away. The contract system currently in vogue has thrown us out of this alternative source of income,” says A.S.M. Sakthivel.
Another small-time dealer, M. Rengan, says that prices of carry bags has increased by 50 paise.
The small and medium traders point out that their trade would become more profitable if the shops were shifted to the adjoining place. “A huge advance for a small shop, measuring 5 feet by 5 feet, together with the recurring expenditure of rent, has been a major setback. On the other hand, if the Corporation allotted a new and more spacious market, our profit margin will increase through a big investment,” they say.