Sago hit by slump; prices crash, stocks pile

COIMBATORE: Sago manufacturers in the Western region are concerned about a significant decline in demand for sago rice in northern India.

Manufacturers claimed that sago production has increased manifold due to mechanisation, despite a drop in sales due to a multitude of reasons.

“From an average of 8000 to 10,0000 bags daily (each bag is around 90 kg) until a few years ago, production rose to 15,000 bags. As compared to increasing production levels, sales have not been encouraging due to low demand,” said N Tamilmani, former chairman of Sagoserve.

However, the number of sago units has reduced from around 1500 units three decades ago to just 350 units now. Of them, only around 100 units are in continuous production of sago.

Yet, the volume of production is high due to advances in production techniques. In the past, they functioned as cottage units, and sago could not be produced during rains as it needed to be dried in the sun, whereas mechanisation has ensured production is possible round the year.

Sales began to dip due to issues like adulteration and the waning habit of fasting among people during auspicious days. Demand for sago typically peaks during July, August, and September, when a host of religious festivals, including Navratri, are observed in North India.

A majority of sago production is concentrated in Salem and Namakkal districts, and almost 95 per cent of the country’s requirements are met by Tamil Nadu.

Even though sago consumption is less in Tamil Nadu, it is mainly in demand in Delhi, Uttar Pradesh, Madhya Pradesh, Maharashtra, and Gujarat.

Manufacturers also claimed that a huge volume of sago rice meant for exports has stagnated, resulting in unbearable losses.

“Up to five lakh bags of sago have stagnated in units due to poor sales for this Navratri season. Currently, sago is sold at Rs 3,200 per bag, a sharp drop in prices from up to Rs 6,000 per bag a few years ago. Its prices have never gone below Rs 4,000 per bag before,” added Tamilmani.

However, manufacturers see a better market for starch produced from tapioca. It is used in various sectors, including the paper industry, and in the food-making sector, including papad, ice cream, and chocolate, as well as in making medicine by the pharma industry.

“Starch production and sale have increased phenomenally over the years. From around 1,500 bags a decade ago, the production has increased to 4,000 bags. Price is also reasonably good at Rs 2,400 per bag,” said R Venkatesh, a manufacturer in Namakkal.

More awareness is needed to increase the sale of sago and also make efforts to resume the sale of sago through PDS outlets across Tamil Nadu.

“It was sold in PDS shops during the previous AIADMK regime, but was discontinued. Also, the government should initiate efforts to introduce sago in the noon meal scheme and take measures to market the rice in other states,” said R Murugesan, a sago manufacturer in Salem.