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As incomes fall, people consume less
As incomes come down owing to job losses and pay cuts owing to lockdown and Covid fears, demand for groceries has come down. Normally, prices have to rise steeply during this season, but there is an exception this year probably due to the declining demand.
Tirupati: As incomes come down owing to job losses and pay cuts owing to lockdown and Covid fears, demand for groceries has come down. Normally, prices have to rise steeply during this season, but there is an exception this year probably due to the declining demand.
The Covid-19 pandemic and the resultant lockdown increased the demand for groceries initially. Fearing prolonged lockdown, people went on buying large quantities of groceries standing in long queues during lockdown relaxation hours in March-end and April.
Still, the prices were more or less under control since the government has stepped in to control any price hike and hoarding. With this people started stocking up essential commodities in more than double to quantities anticipating more restrictions in future. But, the situation has changed since unlock 1.0 and no long queue lines are seen now before shops.
The demand for various commodities has started to wane for various reasons. Retail traders and super market owners have been saying that there was a reduction in sales by about 30-40 per cent on the whole. "Instead of buying all items when they visit the super markets, now the consumers are going away with only those commodities which they need for immediate use. This kind of behaviour was never seen from our regular customers," said Madhu of 'Buy n Save'.
From lockdown period to now, the prices of various pulses and oils have increased by about Rs 5-10 which cannot be considered as abnormal hike. With this the demand would have been normal or even more if the situation is entirely normal. However, the pandemic led closure of colleges, hostels, hotels and restricted functions, etc., all led to the steep fall in demand.
Another major factor cited by the traders as well as the consumers for the reason to buy in reduced quantities was that there was a drastic cut in the income levels with many have either lost their job during the pandemic or getting almost 50 per cent of their original salaries.
Given this situation, the prices would have dropped instead of going up. But, president of Sri Balaji Food Grains Merchants Association S Ayyappa said that every year the prices are tend to go up around this period as the demand would be more. But, with no exports and cut in domestic demand this has not happened. Reduced demand keeping prices down. The new produce will be kept in AC godowns and these charges will be added up to the prices which is reflecting the prices now, he said.