Source: The Hindu Business Line, Nov 14, 2016
New Delhi / Mumbai: Demonetisation has hit business at the Azadpur mandi in Delhi – Asia’s largest wholesale fruits and vegetables market – with traders estimating a 30-40 per cent drop in daily sales.
There are concerns that if there are no relaxations from the Centre in the coming days, perishables will be hit severely affecting traders, farmers as well as consumers.
Demand for cash
“Most customers are coming to the mandi with big notes, which traders are finding difficult to accept. Some traders are not accepting the notes at all, choosing to store their produce instead. Daily trade has fallen by at least 30 per cent, and things would get worse if the cash crunch is not addressed soon,” a Delhi-based wholesale trader of fruits told BusinessLine
Azadpur mandi supplies about 15,000 tonne of fruits and vegetables to Delhi everyday, according to industry estimates.
“While cheques are being given to transporters, they are also demanding cash to meet other expenses,” said Harish Chauhan, President (Fruits and Vegetables), Flower Growers Association of Himachal Pradesh.
The All India Motor Transport Congress, a national level transporters’ body, has already warned in a release that essential commodities, including milk, vegetables, fruits and medicines will get impacted as 80 per cent of its operational cost is based on cash
Chauhan, however, is optimistic that in the long run, the demonetisation policy will bear fruits “It is the big industrialists who are sitting on black money. Demonetisation in the long term will benefit farmers, as with more cash in the banks, getting loans will be come easier,” he said.
In the short-term, however, things are expected to get worse if no ameliorative measures are taken. “Our association was deliberating the idea of asking banks to have a separate queue for withdrawals for vegetable and fruits traders. But the idea was shot down because banks are not entertaining any such requests,” the Delhi-based fruit trader said.
Once fruits and vegetables start rotting in the mandi, the scenario may turn ugly, he cautioned. The Centre needs to respond to the situation soon.
Mumbai stays silent
The Navi Mumbai fruit and vegetable market too, remained quiet, amid a 20-30 per cent decline in trading volumes.
Since the early hours of Wednesday, more than 2,000 trucks have arrived with fruit, vegetables and grains but traders found it difficult to settle the payments due to the currency issue, a senior APMC official told BusinessLine.
Prominent fruit merchant, Mahesh Vasandani, said that in some products, cash dealing in the market has declined up to 30 per cent. There is an element of uncertainty in the market.
A number of labourers are asking for their dues in small denomination notes, therefore, additional manpower has to be deployed for scrounging the notes from the market, he said.
The impact of the market disruption can be gauged from the fact that trading floor is usually strewn with vegetable leftovers and rotten fruits, but on Wednesday there were hardly any leftovers on the floor.
Vegetable trader Hariom Tiwari said that a majority of his dealings since mornings have been on credit. Until the situation improves some traders have even gone to the extent of asking farmers to reduce the supply of goods, he said.Former APMC Director Sanjay Pansare said a number of dealings did happen with Rs.500 and Rs.1,000 notes out of desperation. It is an illegal trade therefore the trader’s body have strictly asked all to members not accept discontinued from Thursday, he said.