Sago, that is derived from tapioca, has witnessed a sharp fall in prices in all the five varieties that range between Rs 1,100 and Rs 1,400 per quintal (inclusive of tax), Naresh Chandarana, a leading wholesale merchant at the Navi Mumbai APMC (Agriculture Produce Market Commission) market said.

According to Chandarana, sago stocks topped three-year record high at around 115,000 bags (90 kilogram each) at the warehouses in Salem, the only production centre of the country.

The price of the premium quality Extra super fine (Maharaja) was Rs 1,401 per bag, Super fine quality (Rajdhani) was Rs 1,691, Extra milk white (Dudhmalai) was Rs 1,161, Milk white (Madhurmalai) was Rs 1,125 and Special quality (Rasmalai) was Rs 1,075-1,100 on Saturday.

The prices of these varieties on the same day of the previous year (1997) were Rs 2,151, Rs 2,051, Rs 1,801 and Rs 1,751 respectively. In 1996 the prices were comparatively lowerat Rs 1,801, Rs 1,691, Rs 1,531 and Rs 1,451 respectively.

Moreover, the demand for sago which peaks during religious festivals, June through September, has witnessed a gradual decline which has accentuated the stock offtake position.

Though Maharashtra consumes sago round the year as a staple breakfast, supplies are far more than the demand.

Moreover, the new crop arrivals of tapioca, which is expected at the end of next month, has led to distress selling by the sago production mills, market sources said.

The producers in a bid to encash their investments have started unleashing stocks into the market which further dampened the prices.

The Co-operative Society of Sago Producers, popularly known as Sagoserve in Salem, has also not succeeded in arresting the declining trend.

The prices are likely to decline further in the next couple of months as the market is expecting the arrival of new crop.

The declining trend would be arrested only if the crop fails or the production of sago is curtailed,traders said.