VIRUDHUNAGAR: Deepavali celebrations are likely to be more expensive this year as manufacturers in Sivakasi, the fireworks capital of India, have hiked cracker prices by 15% to 20%. The increase follows a steep 30% rise in production costs, driven by higher raw material prices and transportation expenses.
Prolonged closure of factories due to safety violations has also severely cut production capacity, triggering fears of product shortage and spike in demand during the peak festival season.
“Though a marginal increase in prices is common every year, the spike this year is unprecedented,” said a cracker manufacturer from Sivakasi.
According to the Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA), though there is technically no shortage of raw materials, delays in the arrival of imported materials has affected the production cycle.
Speaking to TNIE, TANFAMA president Ganesan Panjurajan said most of the raw materials required to manufacture quality fireworks are imported.
“Geopolitical tensions have led to an increase of over 17% in raw material costs this year. Though the materials are available, it takes a longer time for them to reach the units,” he said.
Just 60% production completed: Cracker units
Ganesan added that the price of sulphur — a petroleum-derived product crucial for ignition — has increased by around 250%.
Many cracker manufacturers in the region said the cost has surged by up to 40%, putting heavy pressure on profit margins. Small Cracker Manufacturers Association president G Vinayagamoorthi pointed out that small-scale manufacturers source raw materials from states including Telangana and Maharashtra, and domestic procurement costs have increased multifold due to fuel price hikes. “The cracker price has gone up by around 20% and is expected to reach 30% during Deepavali season,” he said.
Vinayagamoorthi also noted that the prolonged suspension of licences over safety violations has affected production. “Though units rectify the violations, the process of revoking the suspension takes a few months. As a result, only around 60% of the production has been completed so far,” he added.
Manufacturers said that they were trying to absorb a part of the increased cost by reducing their profit margin to soften the hike in prices.
Meanwhile, traders expect purchases to decline this Deepavali due to the price hike. A representative of the Federation of Tamil Nadu Fireworks Traders said manufacturers had increased prices by an average of 20% compared to last year.
“Due to lower production, prices have gone up and shortage of raw materials has also forced us to shell out more for procurement. However, we will have to compromise on our profit margins to avoid passing on the entire price hike to customers,” he said.
Cracker shop owners said they were struggling to procure products amid the shortage, with rising demand pushing up wholesale prices by at least 25%. S Kannan (36), who has been running three cracker shops in Virudhunagar district for the past 12 years, said he had approached at least 20 to 25 manufacturing units but was unable to source even basic varieties such as bijili. Aerial shots and several other varieties are also expected to face severe shortages this season.
“Adding to our woes, regular customers who buy crackers in bulk are now reluctant to buy some of the products due to the price hike. We are unsure whether they will buy even if we manage to stock the products,” he added.
‘Sulphur cost up by nearly 250%’
Geopolitical tensions have led to an increase of over 17% in raw material costs this year. Though the materials are available, it takes a longer time for them to reach the units, TANFAMA president Ganesan Panjurajan said. The price of sulphur, a raw material crucial for ignition, has increased by 250%, he said
