Commodity traders wary of building inventory

Stockists halt buying on hopes of farm produce becoming cheaper after GST comes into effect

A sustained fall in prices of farm produce on expectations of a bumper kharif output is hurting farmers nationwide. Traders are not buying even at low prices due to tight liquidity and expectations of even lower prices after the GST is imposed.

The government’s decision to place essential food in the “zero” tax GST bracket has brought trade to a standstill. “Uttar Pradesh levies a purchase tax on wheat and Haryana and Jharkhand levy VAT on rice. Gujarat, Maharashtra, Karnataka, Tamil Nadu and Madhya Pradesh levy VAT on oilseeds. Many such commodities fall in the zero-tax GST bracket. Stockists are wary