Chennai, Sep 29 The sago industry in Tamil Nadu, which supplies nearly the entire country’s sago rice requirement, is grappling with a steep decline in demand from Northern India despite unprecedented production growth.
Mechanisation and modern processing have enabled a surge in output, but sales have failed to keep pace, leaving thousands of tonnes of finished goods unsold. In the western belt, especially Salem and Namakkal districts, where most sago units operate, production levels have soared in recent years.
Daily output has increased from an earlier range of 8,000-10,000 bags to about 15,000 bags, each weighing nearly 90 kilograms. However, demand in major markets such as Delhi, Uttar Pradesh, Madhya Pradesh, Maharashtra and Gujarat has dropped sharply. The number of manufacturing units has dwindled dramatically from about 1,500 three decades ago to only 350 now, and fewer than a third of these operate continuously. Yet mechanisation has allowed factories to run throughout the year, unlike earlier cottage-style units that depended on dry weather to process and sun-dry sago.
Demand for sago traditionally spikes during July to September when fasting and festivals like Navratri drive consumption in northern states.
But changing food habits, the decline in religious fasting practices, and consumer concerns about adulteration have severely hit sales.
As a result, around five lakh bags of sago produced for this festive season remain unsold. Price erosion has added to the crisis. The wholesale price of a 90-kg bag has dropped to about Rs 3,200, down from Rs 6,000 a few years ago, marking the lowest levels in recent memory. Exports too have stagnated, compounding the losses faced by manufacturers. However, the parallel starch industry is thriving.
Starch extracted from tapioca, a byproduct of sago production, has seen robust growth due to high demand from sectors like paper, pharmaceuticals, and food processing.
Production has more than doubled in the past decade, and prices remain stable at about Rs 2,400 per bag. Industry stakeholders say stronger marketing support is needed to revive sago sales. They want the Tamil Nadu government to resume distribution through Public Distribution System (PDS) outlets, include sago in the noon meal scheme, and promote its nutritional value to boost demand both within the state and across India. Without such interventions, they warn, one of Tamil Nadu’s most iconic agro-industries risks further decline.
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