Withdrawal of Rs 500 and Rs 1,000 denomination notes has hit operation of the city’s Choithram wholesale sabzi mandi, the biggest vegetable market in the region, with sales dipping up to 40 percent.
Stocks of vegetables at the market is rising for the past few days as vendors are lifting far less stocks than normal due to cash flow problem.
“Sales at the mandi have dipped by about 30-40% as there is liquidity crunch after the government withdrew Rs 500 and Rs 1,000 notes. A lot of vegetables have started rotting,” wholesale trader Farooq Riaz said.
While the vegetable mandi is functional, onion and potato traders have decided to suspend their operation till Thursday.
“The problem is that we are not able to pay farmers and commission agents as there is shortage of smaller denomination notes. Farmers don’t accept cheque and so operations have been suspended for a few days,” Sunil Rajani, a wholesale trader said.
At present, onion and potato are trading at Rs 8 per kg but prices might increase in the coming days.
Around 100-125 truck carrying about 30,000-35,000 bags of onions come to Choithram mandi daily. Their local consumption is about 20% while the rest is sent to nearby areas. Some traders are giving vegetable to vendors on credit, but such operations are limited. Commission agents said while farmers were bringing their produce to the market there was no cash to pay them.
To tackle corruption, tax evasion and uncover undeclared wealth the Prime Minister on Tuesday demonetised Rs 500 and Rs 1,000 banknotes.