Small mandis in UP, MP post higher jaggery trade

Small mandis in Uttar Pradesh and Madhya Pradesh "� the two leading jaggery-producing states in the country "� have started attracting substantially higher jaggery arrivals as their trade volumes are surging.

These emerging mandis, believed to be a stronghold of politically-linked traders, are giving state-level mandis a run for their money, with a substantial volume of trade being shifted to them.

The development assumes significance as domestic jaggery traders, in general, are striving for survival on the back of falling sugar prices and consumers' growing preference towards refined sweetener.

"When prices are going down in the wake of higher production, and the outlook remains bearish, creation of parallel mandis in any commodity is not a healthy sign, and jaggery is no exception," said Arun Khandelwal, president of Muzaffarnagar-based Federation of Gur Traders.

The average daily jaggery arrivals in Muzaffarnagar are currently estimated to be 10,000 quintals, which is substantially lower than the normal arrivals of 15,000 quintals.

On the other hand, small mandis, which are growing stronger by the day, have seen a growth of about 50 per cent in daily arrivals to 4,000-5,000 quintals.

Expressing views similar to Khandelwal's, Vijendra Kumar, proprietor, Durgadas Narayandas & Co and ex-chairman of Chamber of Commerce, Hapur, said smaller mandis "are gaining momentum in these two states and, thus, are threatening existing mandis".

The daily arrivals in Hapur plummeted to 25,000-30,000 lumps (1 lump = 10 kg) now from the usual level of 40,000 lumps.

On parallel mandis in UP, Khandelwal said the government had not yet announced the SAP (state advisory price), generally announced in the beginning of the season. This could be because the government was not ready to take any risk before the state elections, he added.

Despite a production boost, Maharashtra has not yet seen any such parallel mandis in the state mainly because of strong existing mandis across the state.

The average daily arrivals in Kolhapur, Sangli and Karad are 20,000 lumps (1 lump = 30 kg), 6,000 lumps and 5,000 lumps respectively.

Although jaggery prices have not seen any significant fall in Muzaffarnagar and Hapur, they have declined in Mumbai by Rs 50 a quintal over the past five days. In Mumbai, Maharashtra-origin jaggery is currently quoting between Rs 1,600 and Rs 2,200 a quintal.

Since a majority of producers belong to the unorganised sector, no organised data are available for the country's jaggery production. A rough industry estimate puts it at approximately 150 lakh tonne this year.

Deepak Shah, partner, Nagindas Harilal & Co, projects higher-than-estimated output this year as he believes a favourable monsoon and higher recovery rate will boot production this year.