Informist, Thursday, Nov. 14, 2024

By Taniva Singha Roy

MUMBAI – The projected 25?cline in kharif urad production this year will likely have only a minimal impact on the prices and availability of the pulse as imports are likely to offset the fall in domestic output, market participants said. Urad prices will most likely be range bound and rise slightly thereafter as imports will ensure availability of the pulse, they said.

The production of urad (black gram) in India during the kharif season is projected to hit a 15-year low at 1.21 million tonnes, according to farm ministry estimates. Kharif urad output last year was 1.60 million tonnes.

The drop in production is largely attributed to a fall in acreage, with farmers in key urad-producing states like Maharashtra and Karnataka shifting to other crops like tur due to factors including better returns. Kharif urad acreage in the country declined 5.7% from a year ago to 3.07 million hectares, while the area under tur has increased 14.1% to 4.65 million hectares.

To compensate for the shortfall in domestic production, India has been importing urad in large quantities, according to Rahul Chauhan, director of IGrain India. Imports of urad rose 43% on year to 460,000 tonnes in Apr-Oct, according to Chauhan. Apart from the imports, big farmers and stockists have ample carryover stocks, which if released will cap any gains in prices, Chauhan said.

The all-India average wholesale price of urad was at INR 11,527.60 per 100 kilograms on Wednesday, almost unchanged from a month ago and up about 3% from a year ago, according to the Consumer Affairs Department data.

Urad prices are likely to remain at the current levels for the month as there is a post-Diwali lull in the market and low demand, according to Prem Kogta, a mill owner in Vidisha in Madhya Pradesh. Prices in some key markets have fallen slightly, and market participants expect urad prices to come under downward pressure as global supply dynamics continue to evolve.

Prices of urad in the benchmark market of Indore in Madhya Pradesh were at INR 7,500-8,500 per 100 kg on Wednesday, according to the India Pulses and Grains Association.

"Prices are steady at a lower range currently due to lower import prices," Kogta said. Prices of urad arriving in the country through the Chennai port have fallen by INR 150-INR 200 to INR 9,000 per 100 kg, he said. Low demand is also weighing on prices, he said. "Demand is always low for eight to nine days post-Diwali, as it comes down from its temporary high," Kogta said.

However, prices will start improving from the second week of December, when demand is expected to pick up slightly. But the trajectory of prices mostly depends on the amount of imports coming in, said Kogta. Currently, imported urad is cheaper than domestic urad.

Imports from Myanmar, the largest supplier of urad to India, are likely to slow down due to a huge difference between the domestic and import prices, the India Pulses and Grains Association said. "Myanmar knows there is a shortage of good quality bold urad in India, so after Diwali, India may have to rely on imported urad from Myanmar due to the lack of good quality options locally," the association said.

The government policies and procurement will also impact prices in the near term, Chauhan said. The government has recently removed the 25?iling on procurement of tur, urad, and masur for 2024-25 to encourage farmers to produce more pulses to ensure self-sufficiency in pulses. Under the price support scheme, the government could earlier buy only up to 25% of the total pulses produced during the season. Now, the government can procure more than 25% of the total produce of urad for the season at the minimum support price.

The government has already agreed to procure 133,000 tn of urad in Maharashtra, Telangana, and Karnataka in the ongoing kharif season. End

With inputs from Shreya Shetty

Edited by Saji George Titus

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