Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,921.50-96.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Commodity traders play safe as government talks tough on hoarding

“The trading community has no option but to be terrified.” Such is the fear, particularly among traders in fruits and vegetables.

, ET Bureau|
Updated: Jun 28, 2014, 04.36 AM IST
0Comments
“The trading community has no option but to be terrified.” Such is the fear, particularly among traders in fruits and vegetables.
“The trading community has no option but to be terrified.” Such is the fear, particularly among traders in fruits and vegetables.
NEW DELHI: Commodity traders are a panicked lot, with the government talking tough on hoarding. They aren’t taking any chances to speculate price movements because of fear that any adverse price comments could put them under the scanner.

Playing safe, most say that prices will remain stable with the government’s move to release more grain.

“The government, by giving a statement that we are hoarders, is making the market panic,” said Om Prakash Jain, president of the Delhi Grain Merchants’ Association who has been in the trade for 62 years.

“The trading community has no option but to be terrified.” Such is the fear, particularly among traders in fruits and vegetables, that even media-savvy ones don’t want to be quoted.

Recent raids on their premises have made them further wary of making speculations. Jain, who is associated with the RSS, the ruling BJP’s ideological parent, says the government should keep a check on companies who package and on retailers than on traders.

“I sell arhar dal (yellow pigeon peas) for Rs 70 a kg and in retail it is available for Rs 125 a kg. Why are we getting all the blame?” The sugar industry, which is delighted by the decisions taken by the government to bailout the industry – such as higher import duty and interest-free loans – is also terrified by the strict stand of the government on commodity hoarders.

With foreign supplies expected to dry up because of higher import tax, sugar prices in Delhi’s wholesale market rose by Rs 1.50 in less than a week to Rs 34.20 a kg on Thursday, despite abundant stocks with mills.

But market players say they expect the government to keep prices from fluctuating much. The bailout package was announced on condition that sugar makers will first agree to pay arrears to cane farmers, a step that some traders see as a proof to the government’s consumer-first stance.

A Maharashtra-based sugar trader, requesting anonymity, said the Narendra Modi government is a pro-consumer government, hence traders were under the lurking fear of scrutiny and the industry is under pressure to look for consumer’s interest first. “Recent decisions by the government have brought the traders in line with the governance.

Last week, it was for the onion market that the finance minister cracked the whip. With the government coming out with a strong statement that there is no shortage of foodgrain, there is a general sentiment that there could be a policy announcement of stock limit,” said MG Joshi, managing director of the National Federation of Cooperative Sugar Factories. But some expressed concerns over the supply chain getting chocked.

“Traders are the vital logistical arteries and if you hurt or choke them, the challenge of distributions and last-mile connectivity diminishes, resulting in non-availability of commodities and therefore inflationary pressures,” said Tejinder Narang, a grain analyst.

Nagpur-based BC Bhartia, president of the Confederation of All India Traders, felt that prices were stable and with huge stocks they were unlikely to move. “Hoarding and black marketing were words used in the early ’50s and ’60s.

In the current scenario, global conglomerates have a far bigger role in deciding the market prices,” he said. “Pulses and edible oil are stocked out of the country and supplies are dependent on these big companies. Does the government know how business is done?” Retail chains selling fresh vegetable, fruits and grocery are also in no mood to talk on prices.

“I have been told in clear terms not to speak to the media. The current government is doing what the Congress used to do,” said a retail executive who didn’t want to be named.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service