Traders at Delhi’s Azadpur Mandi — Asia’s largest wholesale market for fruits and vegetables — are feeling the pinch of rising inflation. They have reported a 50% dip in sales over the past three-four months.
Many traders said they were unable to pay their dues due to the slump in sales and given that such wholesale markets run on credit, the drop in demand was having a domino effect on the entire supply chain.
Those hit by low sales include not just traders involved in the trade of items such as lemons and tomatoes, whose prices spiked recently, but also those dealing with potatoes, garlic and onions, whose prices have not changed.
According to Jayati Ghosh, a noted economist, “What this suggests is that the economic distress of ordinary people is much wider than what has been suggested by the media or by the government officials.”
Inflation faced by Indian consumers climbed to an almost eight-year high of 7.8% in April, according to the data released by the National Statistical Office last week.
Traders’ woes
Amjad Qureshi, a papaya trader based in the market for the last eight years, said that despite the fruit selling having come down from ₹35 in the first week of May to ₹30 last week, sales have remained poor. He added that the reduced demand has caused him to procure less.
In April, Mr. Qureshi sold three tons of stocks, on average, every day. While in May he was able to sell just 200 kg a day.
The price of used newspapers used in packing the fruit has also gone up from ₹25 per kg in January to ₹40 per kg in May.
Ilyas, another papaya vendor, based in the market for close to two decades, said he would make a daily profit of close to ₹7,000 from his sales a few months ago. Now it takes him 10 days to make the same money.
“Despite procuring less, I, and most traders, are unable to clear our stocks. So, we are forced to either dump our stocks or sell them at dirt cheap rates,” Ilyas added.
Low sales
However, the worries were not limited to the fruit traders alone. Several vegetable vendors, including those selling garlic, whose prices had remained stagnant, also reported a slump in sales.
Abhinav, a second-generation garlic trader at the market, said while the prices of garlic remained constant — at ₹20 to ₹80 per kg depending on size and quality — his sales had dipped in the weeks following the second wave of the COVID-19 pandemic.
“During the first wave, people were still spending on these essentials, including blue-collar workers. But in the aftermath of the second wave, we are seeing fewer buyers,” said Mr. Abhinav.
He added, “It is crucial to understand that we work on a credit-based system. Many traders have been unable to pay their dues after the second wave. This has resulted in many accruing bad debts”.
Similar views were expressed by vendors selling onion and potatoes, whose buyers have reduced despite prices not having increased.
A trader of lemons, whose prices shot up from ₹20 in February to ₹77 in March, reducing to ₹67 in April and further to ₹50 in May, also reported thin sales.
According to Adil Khan, chairman, Agricultural Produce Marketing Committee (APMC), Azadpur, “People have definitely cut down on fruits and vegetables over the last three to four months. Azadpur mandi feeds the entire north India. So, this phenomenon is definitely playing out over a large scale”.
However, Anil Malhotra, an APMC member, said the “real problem” was the increasing debts accrued by traders over time, which they are unable to pay.
‘Severe implications’
Ms. Ghosh said “What you have seen at the mandi is a reflection of a much larger economic process that has very severe implications”.
She said the incomes have been falling as more people have lost cash income compared to the pre-pandemic period.
She added, “Informal workers are either getting fewer days of employment or they are getting paid less. While those who are self-employed, like those working at the Mandi, are not able to sell enough. As incomes are falling while prices of essential commodities have gone up, so one will obviously focus on the essentials in their spending”.
Ms. Ghosh elaborated that depending on the level of income, “one will cut down on meat or fish, milk, pulses and then get down to a point where you choose between vegetables — as to what is the minimum that one can manage with”.
