Cash crunch leads to closure of jaggery market in Anakapalle

Limit on withdrawal hits traders; Rs. 50 lakh required per day to carry out transactions

Demonetisation has badly hit the Anakapalle jaggery market affecting farmers that sell the product and labourers involved in unloading and loading.

Going by the present average arrival of around 8,000 lumps from nearby villages, the requirement of cash is put at around Rs. 50 lakh a day. The market yard has been closed since November 17.

Unloading, grading and auction of the stock is completed on the same day at the market yard and cash has to be paid to labourers and farmers and for the vehicles by which the stock is brought.

“The limit for withdrawal of cash from current account is Rs. 50,000 for a week which is quite inadequate compared to the requirement at the yard,” says prominent trader Korukonda Butchiraju.

The process from arrival of stock to auction is completed during the day and all the payments have to be made in cash. Neither farmers, nor others can be paid in cheques and the non-availability of cash has brought the transactions to a standstill, he says.

It's not paucity of money but the limits on withdrawal that is causing the problem, he points out stating in the initial days the market had managed to carry out transactions.

He estimates that at the present rate of arrival the stock is sent by 30 to 40 farmers with some of them supplying daily too.

The market yard has 300 to 400 labourers and on a given day about 50 labourers will be at work as they are in the employ of different traders.

The annual turnover at the market is more than Rs. 110 crore. Said to be one of the largest jaggery markets in the country, it had received 35 lakh lumps (45,000 tonnes) of jaggery in 2015-16 season.

Besides even for exporting the jaggery, lorry operators demand cash in advance. For a 20-ton capacity lorry about Rs. 30,000 has to be paid in cash as advance and if someone wants to send three trucks he has to shell down Rs. 1 lakh.

Limit on withdrawal hits traders in Anakapalle

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Printable version | Jul 14, 2020 4:54:52 PM |

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