CHENNAI: The West Asia conflict-triggered LPG shortage is having a ripple effect on the wholesale food grain markets, with slowdown already visible in falling orders from hotels and institutional buyers – traditionally the backbone of the wholesale food supply chain.
Traders say a clearer picture of the impact is expected by Monday.
“Hotels and institutions account for more than half of our business. With some of them either shutting down temporarily or cutting back operations because of the LPG shortage, our sales have dropped by about 20%,” said Ashok Kumar, manager of Magizhchi, a shop operating in the Chennai’s wholesale food grain market in Koyambedu.
“Earlier, we used to get enquiries from nearly 50 customers a day. Now it has come down to about 25,” he said.
The slowdown is particularly worrying for traders who depend on daily bulk purchases by restaurants, small hotels, caterers and hostels. These establishments typically procure rice, pulses, wheat, edible oil and other staples in large volumes from wholesale markets.
P G Srinivasan of PMG International, who is also treasurer of the Koyambedu Food Grains Market Association, told TNIE the drop in footfall has begun to affect trade. “The West Asia war has disrupted the global plastic supply chain. Shortage of key resins and petrochemical feedstock has pushed up costs by more than 20%. That is another cause for concern,” Srinivasan added.
Despite the dull sales, traders continue to procure essential commodities amid fears that fuel prices could increase if the conflict drags on.
S Chandran, president of the Market Management Committee Licensed Merchants Association and general secretary of Anaithu Sangankalin Kootamaipu, said it’s too early to assess the full impact. “Hope the conflict doesn’t impact the fuel prices which would impact the supply chain,” he said.
N Chinnamayan, president of the Mattuthavani Central Market Traders Association, said vegetable prices in the Madurai market remained largely unchanged for now. Chennai Hotel Association president M Ravi said 20% of small eateries may have shut shop.
(With inputs from MS Thanaraj @ Madurai)