Jaggery prices plummet 25%

Jaggery prices slumped about 25 per cent in just one and a half months to Rs 1,500 a quintal on the lower side and Rs 1,900 a quintal on the higher side. Just before Diwali, the prices were hovering around Rs 2,100 a quintal on the lower side and Rs 2,500 a quintal on the higher side.

"Production has got underway in all parts of the country, and almost all sugar companies have started commercial production. The prices, therefore, have declined drastically in Mumbai," said Deepak Shah, partner of Nagindas Harilal & Co, an active trader at Agricultural Produce Marketing Committee (APMC).

Jaggery prices start declining at the beginning of season as only the conventional uses drive demand. Except for some medicinal uses, demand for jaggery is traditional in nature.

Consumers are more inclined to using sugar in tea, coffee and other brewage items on a daily basis. So, there is no fresh demand at the beginning of the new season.

Jaggery consumption in Mumbai is around 10 trucks a day, with each truck containing 10 tonne, and it is more or less stagnant. In comparison, demand in rural India grows a little when new varieties hit the market, said Shah.

Arun Khandelwal of Muzaffarnagar ruled out any price decline in jaggery prices in north India. "The jaggery prices have risen by Rs 100 per 40 kg due to rising demand from individual consumers before Makar Shankranti," Khandelwal said.

"During Makar Shankranti, jaggery demand, especially in the north, rises about 50 per cent as lots of new edible varieties are prepared in houses and jaggery "� and not sugar "� is used in most of them. Hence, a substantial rise in prices," Khandelwal added.

In western Uttar Pradesh, jaggery prices are quoted in the range of Rs 530-555 a bag (40 kg), arrivals being around 15,000 bags a day.

The UP government has fixed the SAP (sugarcane buying prices) at Rs 105 a quintal, which is expected to go up in the coming months. If it goes up to Rs 140 a quintal, the jaggery production cost would shoot up to Rs 525 a bag.

Looking at the projected price, the current selling prices are at the level of production cost. So, it is unlikely that the season would see a further price fall, Khandelwal said. If selling prices dip any further, the producers would incur loss, he feared.

At Ncdex, the March contract jaggery was sold at Rs 539 a 40-kg bag, and at MCX, the December contract was pegged at Rs 504 a bag.