No burst November

Its November and normally the month that favors barbers the least and cracker manufacturers the most. The former part of the statement may not be subject to change but the latter is definitely bound to. While most industries have started to come out of the lull caused by Covid-19, the 2000 crore seasonal fireworks industry is all set to get the worst punch ever.

Issues in the past:

The lives of the firework supply chain stakeholders wasn't a bed of roses. Historically, this industry had faced several threats from environmental activists who are concerned about the hazardous effects of bursting crackers. The repercussions of bursting crackers though made aware largely could not resist the triumph of this industry. No amount of pollution taxes, caps on production and other measures to dampen the damages that are caused by bursting crackers were sufficient to soften what was like an ever inelastic demand for crackers.

Diwali- the festival of crackers

As per a survey, the month of November contributes to around 75% of cracker sales. The sole reason for such numbers is Diwali. What's supposed to be a festival of lights always ends up being a festival of noise, air pollution. With Covid-19 however, things are about to shape out differently. The virus that sucked the breath out of more than a million people has found yet another victim. The fireworks industry has been expecting a subpar Diwali sale on account of Covid-19. With social distancing norms and personal safety concerns operating, the urge to gather and celebrate is expected to decline. To add to the woes certain states like Odisha, Delhi, Sikkim, Karnataka  have flatly imposed bans on bursting crackers. On account of these bans around 30% of the expected sales has been wiped out. If the effects of personal safety & social distancing are factored in, the numbers would be devastating.

Who gets affected the most:

A whooping 95% of the industry is situated in Sivakasi (the firework hub).Close to 8 lakh workers are dependent on this industry. Any severe decline in sales shall majorly impact all these stakeholders as the fireworks industry is seasonal. Losing this opportunity might prove to be very costly as no other time of the year is as viable as Diwali.

The possibility of pent up demand?:

A section of the industry believes that the demand for crackers might be normal because it is pent up. Easing of quarantine restrictions  might boost demand because the psychological impact of quarantine on people will force them to step out and have fun. However such demand is likely to be minimal as a large segment of the population still operates under the fear of the virus. Who would've thought that an industry that was unscathed by so many issues and legitimate concerns in the past would succumb to a virus?