Silver lining: Perishable prices dip
Kolkata-India (Nov 13) The severe liquidity crunch in households has triggered a downward slide in prices of perishable commodities as traders attempt to clear accumulated stocks before they rot and also garner some funds to remain in business.
While vegetable prices have gone down by 20-30% in several markets across the city, potato, onion and tomato prices have all gone down in the past couple of days. Price of fish is also down by Rs 50-70 a kg. But it has not elicited a smile yet from customers struggling with cash. At Lansdowne market, Jadu Babur Bazar and Lake Market in south Kolkata, onion price has nosedived from Rs 25 a kg prior to Prime Minister Narendra Modi's demonetization announcement on Tuesday to Rs 18 a kg on Saturday. A similar situation was witnessed at Maniktala market in the northern part of the city.
"People are just not buying unless absolutely necessary. One generally says that Bengalis will never compromise on food but I suspect less fish and meat dishes are being made now. So the demand for onion has dropped. Though supply in wholesale market has dipped because of the liquidity crunch across the country, there is still a glut due to lack of demand," said Asit Das, a vegetable vendor at Lansdowne Market.
With dues piling up and pressure to clear the stock mounting, vendors are reducing prices. Everyone associated with onion, right from the farm in Nasik to here, is desperate to kick-start sales. "At any other time, a drop in supply would have led to price rise. But it's just the opposite," said Mahadeb Mondal of Lake Market. "While commodity prices dip normally when there is a liquidity crunch, the trend has so far been missing in Kolkata. But this time we see that happening," said Shankar Gupta, a vegetable trader in Kolkata.
Price of tomato that comes from farms near Bengaluru is also headed southward, having dropped by Rs 2 in two days and is now retailing at Rs 18 a kg. "The suppliers are not accepting payment in the demonetized currency notes and have agreed to take the payment later. They have slashed the price so that we accept the stock in this adverse situation," said Das.
Is the first signal of "Achhe Din"? If this works out, we might see things turning around for India.
Price of Jyoti variety of potato that commanded Rs 20 per kg till Thursday was selling for Rs 18 on Saturday.
Lower consumption has also brought down fish prices at city markets by at least Rs 50 per kg across varieties.
