Prices have dropped 30 per cent on poor demand, bumper cane supply.
Over 25 per cent of jaggery manufacturing units (kolhus) across the country have shut down within a month of beginning the season on a promising note due to a 30 per cent decline in prices.
Thousands of kolhu operators from the unorganised sector started operations mid-October, when jaggery prices were quoting at Rs 1,340 per 40 kg. But, prices fell dramatically due to massive availability of cane on bumper crop this year.
“Unseasonal rain during November damaged most of the rabi crop like wheat and mustard sown in October. Therefore, farmers had to re-sow these, resulting into the diversion of contractual labourers from cane harvesting to wheat plantings. As a consequence, most of the manufacturing units faced labour shortage, resulting in the closure of units,” said Vijendra Kumar Bansal, proprietor of Durgadas Narayandas, a Hapur-based veteran jaggery trader.
Also, farmers had been unwilling to hire contractual workers on competitive wages due to steep decline in jaggery prices, which had fallen nearly 30 per cent across the country due to the lack of demand, Bansal said.
Jaggery prices in Hapur were quoted at Rs 800 per 40 kg. The benchmark Chaku, Laddu and Khudpa varieties were traded in Muzaffarnagar in the range of Rs 860-920, Rs 845-865 and Rs 870-910 per 10 kg, respectively, on Friday.
The sweetener’s arrivals into both Hapur and Muzaffarnagar mandis, India’s two leading jaggery markets, have declined nearly 50 per cent to 10,000 quintals each.
Prices in Anakapalli, the second-largest jaggery market in the country, have dropped more than 30 per cent compared to the last jaggery season (September-August). During the current season, black jaggery prices in the market have been quoting at Rs 205-210 as against Rs 300-310 per 10 kg in the September-December period last year.
Jaggery arrivals to the market had dropped significantly in the last one week due to heavy rain, even though purchasing rates had raised, said K L N Rao, president, Anakapalli Jaggery Traders Association. In the 2009-10 jaggery season, arrivals were reduced to 2.7 million lumps (each lump contains 15 kg), as against 3.1 million lumps in the preceding year. Hence , traders offered higher prices in the last season.
Stockists have abstained so far from the market amid fears that buying at the prevailing price will result in losses. During the last season, they built huge stockpiles in anticipation of higher prices. But, the sudden price decline has resulted in losses to the tune of Rs 1,50,000 per 10 tonnes of jaggery sales.
During the last season, a trader stocked an average 2,000 lorry loads (each load consists 10 tonnes) at Rs 280 per 10 kg in Anakapalli. But, because of the price decline, they disposed off the stock at Rs 210-230 per 10 kg, resulting in losses of Rs 60,000-80,000 on each load, said K Buchi Raju, a veteran trader.
At present, the only relief for the kolhus is the decline in cane prices. As against Rs 260-270 per quintal last year, the raw material is available at Rs 180-200 per quintal this year.
