Cash crunch in Pune: Trade in non-perishable items falls by 30 per cent

Trade in perishable agricultural goods such as vegetables has seen a significant slide since last month or so as retail markets have been severely hit due to demonetisation.

Written by Parthasarathi Biswas | Pune | Updated: December 18, 2016 3:40 am
Pune, Trade in Perishable goods, Trade decline post demonetisation, Demonetisation and perishable goods trade, latest news, India news Non-perishable items were insulated from the effects of demonetisation for some time

Trade in non-perishable agricultural goods in and around Pune has seen a 30 per cent dip, as smaller retailers have substantially reduced their holdings. Ajit Sethiya, national vice-president of the Confederation of All India Traders, said they feared that the volume of trade would drop further unless the cash situation improved soon.

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On an average, the Pune market sees trade worth Rs 30 crore in non-perishable goods.

Trade in perishable agricultural goods such as vegetables has seen a significant slide since last month or so as retail markets have been severely hit due to demonetisation.

However, non-perishable goods such as grains, pulses and sugar etc were insulated from its effects for some time. Now, retail traders have started complaining about low uptake by the end consumers, which has bought the trade to a virtual standstill. Retail traders normally buy their goods from wholesale markets for future trade, said Sethiya.

“For every 1,500 households, there are 12 retail grocery shops in Pune. These shops normally buy from wholesale markets in anticipation of future demand. But after demonetisation, people have become cautious about using loose cash, so the retail business has suffered,” he said.

The lesser uptake in the retail sector has affected wholesale markets, which have seen a dip in business of over 30 per cent, said Sethiya. As supply remains steady and demand becomes sparse due to the cash crunch, prices in wholesale markets have also gone down significantly.

In case the cash situation does not improve soon, the volume of trade would fall further, he said. Over the next few days, the fall in prices would be visible in retail markets also, said Sethiya. In the initial days, many of the retailers issued goods on credit to their customers, who didn’t have enough cash. As the cash situation has not improved much over a month after demonetisation, small retailers have significantly reduced their holdings and stopped buying from wholesale retailers.

While some retailers have started using alternative payment platforms like Point of Sales (POS) machines and e-wallets, majority of retailers are finding it difficult to make the switch, said Sethiya. “Most of them are from outside Pune… the usage of such technology is an operational constraint for them,” he said.

Various merchants’ associations have taken up the task of educating the retailers about using these platforms but the response, said Sethiya, was far from satisfactory.

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