Jaggery prices fall on lower demand from consumer sectors

A drastic shift in consumer sentiment has pulled down jaggery prices by 10 per cent in the last one month.

The sweetener in the benchmark Anakapalli, Andhra Pradesh, market was quoted at Rs 28 a kg on Thursday against Rs 31 a kg over a month ago. Similarly, the popular gur chaku variety of the sweetener was sold between Rs 29 and Rs 30 a kg in western Uttar Pradesh from the level of Rs 32-33 a kg a month ago.

"The consumption pattern has changed. While retail consumers have shifted to sugar from jaggery due to the almost negligible price difference, bulk consumers like wine makers have also found coarse grains as a major and economical substitute. Consequently, the overall demand of jaggery has fallen substantially," said Arun Khandelwal, president, Federation of Gur Traders, an association of gur producers, traders and exporters based in Muzaffarnagar, Uttar Pradesh.

Being a large chunk of the market controlled by the unorganised sector players, there has been no authentic data of jaggery production, stocks and traded quantity available. Prices were much higher seven-week ago when the cane crushing season was on and arrivals were very high. But gradually, jaggery price softened in tune with lowering its demand.

Gur for near month delivery fell a marginal 0.5 per cent to Rs 1,209 per 40 kg on the National Commodity and Derivatives Exchange (NCDEX) on Thursday from Rs 1,232 per 40 kg a month ago. The decline was a bit steep in the far month contract. Gur for delivery in December also fell 0.28 per cent to trade at Rs 1,184 per 40 kg on Thursday, compared with Rs 1,194 per 40 kg a month earlier. In the spot Muzaffarnagar market, gur chaku was sold at Rs 1,165-1,200 per 40 kg, a decline of around Rs 100 in a month.

According to Khandelwal, wine makers used to lift jaggery in bulk quantity earlier. But with the spoiled coarse grains available much cheaper than jaggery and chemicals providing adequate flavour and sweetness, the jaggery consumption has fallen substantially.

Normally by this time, around 15-20 loads (each load contains 10 tonnes) of jaggery used to move from the cold storage plants each week, but this year, local traders are able to sell only two-three loads per week, said K L N Rao, president, Anakapalli Jaggery Merchants Association.

A month ago, prices were ruling at Rs 3.1 lakh per load, however local stockists hesitated to offload them citing extreme heat conditions. Even at the current market price of Rs 2.8 lakh per load, traders from other states are not coming forward as they see a fall in demand in the key markets like Odisha, Chhattisgarh and Bihar.

Traders here had stocked about 2,500 loads during the 2012-13 season.

The other factor was the control from excise and police officials in the Telangana region on non-diversion of black jaggery used in the preparation of cheap liquor. "The police there had recently seized 10-15 loads of jaggery booked from the Anakapalli market ," said K Buchi Raju, a jaggery trader.

The association expects traders to lose Rs 20,000 - 30,000 per load if the situation continues in the remaining season. "During the season, traders purchased jaggery from farmers on an average at Rs 250,000 per load. They also spent another Rs 20,000-30,000 per tonne by way of interests and cold storage rentals," said Rao.