Deficiency in rainfall this monsoon has started weighing on jaggery with its prices jumping up to 10 per cent since the beginning of the month. The sweetener's upward march also got support from lower production during the last season amid rising consumption.
In Vashi Agricultural Produce Marketing Committee (APMC) market, jaggery supply has deteriorated in the last one month as jaggery production units (kolhus) have halted production due to exhaustion of sugarcane. As a consequence, traders are supplying to mandis from cold storages which they had stored during the peak cane crushing season. Arrivals in Vashi APMC have declined by 40-50 per cent in the past month to around 240-250 tonnes. The supply shortage has pushed jaggery prices of all varieties in Vashi APMC market up by Rs 300-400 to trade between Rs 3,200 and Rs 4,500 a quintal.
“More than the deficient rainfall, lower production and carryover stocks in the market are pushing up the price during the ongoing lean season. Until, new arrivals begin, prices would remain firm,” said Deepak Shah, president, Bombay Gur Merchants' Association.
According to trade sources, jaggery production during the last season was lower by 10-15 per cent as the government in Uttar Pradesh asked sugar mills to crush the last cane supplied. Sources estimate total jaggery production at 10 million tonnes during the last season.
For the viability issue, sugar mills generally do not crush cane with less than 7-7.5 per cent of recovery. But, under pressure from the government, mills especially in state advised price (SAP) states crushed as much cane supplied to them irrespective of recovery.
In a move which could support jaggery's upward trend, Indian Meterological Depar-tment estimated 19 per cent rainfall deficiency so far this season resulting into an estimated 10 per cent lower cane crop this year. Proportionate decline in jaggery production cannot be ruled out, said Hapur-based jaggery trader Vijendra Kumar Bansal, proprietor of Durgadas Narayandas. The sweetener from old stock was also quoted at Rs 29,000-30,000 a tonne, higher by Rs 3,000-3,500 in Anakapalli, Andhra Pradesh, India's second-largest jaggery market.
“Vagaries of monsoon rainfall are fuelling jaggery prices,” said K L N Rao, president, Anakapalli Jaggery Merchants Association and added, “Jaggery prices have gone up by around 10 per cent.”
“Barring Western Uttar Pradesh, jaggery price has risen in all regions including Madhya Pradesh, Andhra Pradesh, Karnataka and Maharashtra. Apparently, the trend is likely to continue until the new season output hits the market,” said Arun Khandelwal, president, Federation of Gur Traders, Muzaffarnagar.
In fact, this year, jaggery traders of Anakapalli market have enjoyed good profits by disposing of their old stocks. Traders procured about 23,000 tonnes of jaggery for stocking from farmers on an average price of Rs 22,500 a tonne, and about 60 per cent of their stock was sold to other states at Rs 26,500 a tonne.
Since past two weeks, these prices have increased rapidly and now traders from other states are offering jaggery at Rs 29,000-30,000 a tonne, K Buchi Raju, senior trader at Anakapalli market, said. As of date, Anakapalli traders are still holding about 6,500 tonnes of jaggery, but this stock will also finish very shortly with good price, he added.
Due to drought conditions in Karnataka and Maharashtra, traders are expecting delay in new jaggery arrivals, so we can fetch good earnings on our old stock, Raju said.
"Anakapalli region also recorded very low rainfall. Thus, we are anticipating minimum 45-60 day delay in new jaggery arrivals. Due to this, traders of Orissa, Bihar and Jharkhand are paying more prices for existing stocks, which are very low in quantity," he added.