Jaggery prices dip on fresh supplies

The Jaggery prices have declined by about Rs 80 per quintal in Mumbai and about Rs 100 per quintal in Uttar Pradesh (UP). The fall in prices, in the last two days, was due to resumption of supply after about two months. The supply was interrupted due to rains.

Maharashtra jaggery is now being sold in the range of Rs 1,825-1,850 per quintal in the lower side while in the upper side it is now quoted at Rs 2,500 per quintal. Jaggery prices in UP are in the range of Rs 640-725 per 40 kg in comparison with Rs 780 per 40 kg two days ago.

"The prices were going up for the last two months due to heavy rains in different parts of the country which has stopped now. Fresh festival demand also supported the price rise. But supply has become normal now. Therefore, prices are settling down gradually," said Deepak Shah, a Mumbai-based trader.

"Jaggery is not at all linked with sugar. Therefore, any momentum in sugar does not affect the price of jaggery in any part of the country. About 10 years ago jaggery and sugar used to be interlinked but they are separated now," Shah added.

Mumbai consumes about ten trucks of jaggery everyday and any supply disruption hits the prices. The quality of Maharashtra jaggery is totally different from that of UP. The jaggery from UP is not at all sold in Maharashtra except Balti, which comes to Mumbai through Solapur market in small quantity.

Khudpa jaggery is sold only in UP and neighbouring states.

But, any price volatility in one of the markets hits the other markets.

Muzaffarnagar, the largest jaggery market - where jaggery futures are also active - is also hit as production in existing as well as new facilities has not yet started because of water logging in sugarcane fields and the areas around the mills.

Last year jaggery production started on September 20 but it will take another 20 days for the production to begin this year.

"Unless water is cleared, production cannot start," said Arun Khandelwal, a jaggery trader in Muzaffarnagar.

Jaggery (khudpa) prices in Muzaffarnagar slumped to Rs 785 per 40 kg on Thursday compared with Rs 815 per 10 kg on Wednesday due to large arrival of 3,000 bags this morning.

Two more new sugar mills are being set up by Bajaj in two different sugarcane producing centres that are expected to start production in the next three weeks with all other existing sugar mills. With these two facilities, the total sugarcane crushing capacity of this region would go up to 22,500 quintals per day.

That means the sugar mills would share about 68 per cent of sugarcane crushing capacity compared with 23 per cent in 1999. About 7-8 per cent sugarcane is reserved for seed and juice making purposes. Remaining sugarcane would be available for jaggery production, which was more than 60 per cent few years ago.

"Price war is going to continue in the long run. I wonder if jaggery in near future would be available only in confectionary shops if the trend continues," Khandelwal said.

Jaggery price is coming towards its normalcy and traders would see it to settle between Rs 525-550 per 40 kg in Muzaffarnagar. Sugarcane prices are currently quoted in the range of Rs 125-130 per quintal.

Spot jaggery for Muzaffarnagar is quoted at Rs 784.25 per 40 kg on National Commodity and Derivative Exchange (NCDEX). Jaggery futures for October, November and December is traded at Rs 735.20, Rs 558 and Rs 544.40 per 40 kg respectively while jaggery on Multi Commodity Exchange of India (MCX) is quoted in the range of Rs 524 - 528 per 40 kg.