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Informist, Tuesday, Mar. 11, 2025

 

By Pallavi Singhal

 

NEW DELHI – Prices of pulses could fall at least 10?low the minimum support price due to the government's decision to extend duty-free imports of yellow peas by another three months, market experts and traders say. Factors such as duty-free imports of tur until the end of the next financial year, higher production estimates for some key varieties of pulses, and surplus stocks of yellow peas in the country are expected to keep prices from rising, they say. 

 

The market also expects the government to extend duty-free imports of chana beyond Mar. 31, which may ensure prices remain subdued through the year despite expectations of lower production. "It is likely that the government extends duty-free chana policy by another year due to the expected fall in domestic output. I estimate India will need about 1 million tonnes of chana imports to balance the requirement. I do not see chana prices rallying and expect them to remain range-bound at INR 55-INR 65 this year," said Kunal Parakh, business head at Full Circle Commodities. 

 

According to the agriculture ministry's second advance estimates released on Monday, chana output in 2024-25 is pegged at 11.5 million tonnes, lower than 12.3 million tonnes the previous year. Chana prices in Indore, Madhya Pradesh, were at INR 5,700-INR 5,800 per 100 kg on Monday, around the MSP of INR 5,650 per 100 kg. 

 

Though chana output is pegged lower, the overall production of pulses is seen rising, with summer pulses acreage across the country at 501,600 ha, up from 205,200 ha last year. Production of tur is expected to rise about 6% to 3.5 million tonnes from 3.3 million tonnes, according to the second advance estimate. 

 

With higher production and free imports, prices of tur have already fallen below the MSP of INR 7,550 per 100 kg. Tur prices at Solapur in Maharashtra were at INR 6,500-INR 7,350 per 100 kg on Monday. Agricultural Economist Deepak Pareek expects prices to fall to INR 6,400- INR 6,700 within a month.

 

Prices of masur are likely to remain lower than the MSP. "The 11% duty that the government has imposed on masur seems illogical, as the prices are already hovering at the same level. The government, via National Agricultural Cooperative Marketing Federation of India Ltd., is itself selling masur at INR 56 per kg, much below the MSP of INR 6,700 per 100 kg. The prices of masur will keep falling on the back of higher domestic production and continued imports," Pareek said. Masur prices in Indore were at INR 6,100-INR 6,125 per 100 kg on Monday. 

 

Meanwhile, with China levying 100% tariff on imports of peas from Canada, traders expect all of Canada's yellow pea exports to find their way into India. "Canada has about 300,000 tonnes of yellow peas which it will dump in India. I expect about 1.3 million tonnes of yellow pea to come to India in the calendar year 2025 till May 31," Pareek said.

 

In December 2023, the government had allowed duty-free import of the cheaper variety of pulses due to prospects of lower chana output. The relaxation was extended from time to time till the end of February this year. As a result, India imported a substantial 3 million tonnes of yellow peas in 2024, as per trade estimates. This achieved the intended aim of pulling down prices of other key pulses such as tur, urad, and chana.

 

While duty-free imports of tur and urad have been extended till Mar. 31, 2026, masur imports will attract 11% duty. Chana imports continue to be duty-free till Mar. 31, with a decision on any extension likely soon. 

 

The government could lean towards keeping prices of all pulses low, after prices rallied during the past two years. Pulses inflation remained firm in double digits from June 2023 to August 2024, considerably adding to overall consumer inflation. "Contribution of vegetables and pulses to the overall inflation stood at 32.3% in FY25 (April to December). When these items are excluded, the average food inflation rate for FY25 (April-December) was 4.3%, which is 4.1% lower than the overall food inflation," the Economic Survey for 2024-25 pointed out. 

Pulses inflation finally came down to 2.6% in January, the least in over three years, after the government came out with rigorous policy interventions.

 

In her Budget speech on Feb. 1, Finance Minister Nirmala Sitharaman announced the allocation of INR 10 bln to a six-year mission aimed at boosting the output of pulses to help achieve self-sufficiency. The initiative will focus on three varieties of pulses – tur, urad, and masur.

 

Traders and market experts have termed the continuation of the government's import policy as anti-farmer. "These measures directly contradict the prime minister and home minister's stated vision of achieving pulses self-sufficiency, as they undermine farmer confidence. With prices plummeting despite assurances of fair returns, farmers may hesitate to expand pulses cultivation in the coming seasons. This erosion of trust could jeopardise India's long-term agricultural and food security goals," Pareek said.  End

 

Edited by Avishek Dutta

 

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