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Informist, Wednesday, Oct. 16, 2024

 

By Shreya Shetty and Taniva Singha Roy

 

MUMBAI – Wholesale prices of most pulses are on the downswing and may slip further in the coming months, according to market participants. But, to the government’s chagrin, consumers are yet to benefit as retail prices are proving to be sticky.

 

Owing to cheaper imports and the availability of higher carry-over stocks, prices of different pulses across the country have fallen significantly over the past month, traders and analysts said. An increase in kharif acreage, as recently reported, may also ensure prices continue their downward movement.

 

Imports of pulses also nearly doubled to 4.74 million tonnes in the financial year 2023-24 (Apr-Mar) from 2.5 million tonnes a year ago. India imported nearly 163,991 tonnes of chana in FY24, up a whopping 177% from the previous year. Yellow pea imports were at 1.2 million tonnes in FY24, up from 538.9 tonnes in FY23, according to data from the commerce ministry. Imports of yellow peas before December were low as there was an import duty of 50% in place. The government then exempted yellow peas from the duty. The exemption has since been extended till Dec. 31.

 

Imports of urad also rose by 18.9% to 62,422.5 tonnes in FY24. However, imports of tur fell by 13.8% on year to 771,024.63 tonnes in FY24, according to the ministry's data. Different countries have been dumping pulses into India, and now the country has comfortable stocks of lentils such as urad, traders said.

 

As a result, prices of various pulses have taken a plunge. Chana prices have fallen by INR 500 in the last 20 days to INR 7,450 per 100 kg in the benchmark market of Indore, Madhya Pradesh. Prices are likely to fall further by INR 500-INR 800 by December, said Rahul Chauhan, director at IGrain India, an agricultural commodity research centre.

 

Wholesale prices of tur have also been on a downward trend since June and are currently at INR 9,975-INR 10,000 per 100 kg, down 5.45% on month. Prices could fall by a further INR 200-INR 300 till mid-November as market sentiment is down, said analysts. Urad prices in the benchmark market of Indore were at INR 6,500-INR 8,200 per 100 kg, down from INR 8,000-9,200 per 100 kg a month ago.

 

Mandi prices of chana are expected to continue falling. “As there were problems of sowing in the previous season, everyone expected lower supplies of domestic chana," Dinesh Mangal, a trader from Vidisha in Madhya Pradesh, said. Owing to scanty rainfall, there was delayed sowing. Hence, everyone wanted to take advantage of the seasonal price hike and ended up buying chana in bulk, pushing prices beyond INR 8,000 per 100 kg in some mandis."

 

However, prices have come down from the peak as issues relating to the supply of domestic chana were countered with an increase in imports and the availability of yellow peas as a substitute, even as farmers and stockists offloaded stocks, according to analysts and traders.

 

Similarly, ample supplies of urad due to an increase in imports have also lowered prices of the commodity since June 2024, said analysts. Production of urad has increased in Myanmar and India can expect 900,000 tonnes of the commodity from the neighbouring country this year, up from 650,000 tonnes in the previous year, said IGrain's Chauhan. “The sowing of urad in Myanmar is in full swing, and the new crop will hit Indian markets starting January,” he said.

 

Brazil is also planning to increase its production of urad, Chauhan said. “In the previous year, Brazil exported 20,000-30,000 tonnes to India. This year Brazilian imports are expected to be around 50,000 tonnes, and next year the imports can double,” he said.

 

The new urad crop is in a good position, Prem Kogta, a mill owner from Jalgaon in Maharashtra, said. "Prices of urad could remain steady in the lower range for now," he said. Unless the new crop suffers damage due to heavy rainfall caused by the late withdrawal of the southwest monsoon, prices of urad will not change. "While it is difficult to pinpoint, prices could also fall further as the new crops start arriving," he said.

 

In the case of tur, prices will continue to fall due to cheaper imports and increased kharif acreage, analysts and traders said. The country’s imports of tur, or pigeon pea, stood at 275,393.7 tonnes in Apr-Jul, up 59.7% from the same period last year, according to data from the commerce ministry. Myanmar, Mozambique, and Sudan were the top sources of the seed for India.

 

Moreover, tur acreage was up 14% on year at 4.7 million hectares as of Sept. 17, data from the agriculture ministry showed. “The new crop’s conditions are looking good--there could be higher yields this season,” IGrain's Chauhan said. Prices could fall further by INR 200-INR 300 till mid-November as market sentiment is down, said Ankit Kedia, a trader from Akola in Maharashtra.

 

According to the final estimates of India’s food grain output for the crop year 2023-24 (Jul-Jun), India produced 3.4 million tonnes of tur, down 100,000 tonnes from the previous year. “Due to low tur production last year, there was a big gap between production and consumption,” Chauhan said. “However, this gap was taken care of by imports.”

 

BHARAT BRAND IMPACT

Availability of subsidised pulses under the Bharat brand is also likely to weigh on market prices, some traders believe. The Department of Consumer Affairs allocated 300,000 tonnes of chana from its buffer stocks to government agencies on Oct. 6 for sale under the Bharat brand till Dec. 31, according to a release from the consumer affairs ministry.

 

Under the brand, 80% of the allocated stock is to be sold as chana dal at a retail price of INR 70 per kg, and the remaining 20% is to be sold as whole chana at INR 58 per kg.

 

However, the re-introduction of Bharat Dal only creates psychological pressure, said Chauhan. “I do not think prices of pulses have fallen due to Bharat Dal. You can say it has affected the market slightly, but not at a bigger level,” he said.

 

It was on Jul. 18 last year that the sale of subsidised chana dal under the 'Bharat Dal' banner was launched. This was the first of the Bharat brands to be brought to market. The dal was priced at INR 60 per kg, 18% lower than the prevailing market price of INR 74.5 per kg, according to data from the consumer affairs ministry. It was also made available in packages of 30 kg at INR 55 per kg to further temper prices.

 

However, the government's own stocks of chana are now running low, so it may discontinue the Bharat brand after some time, Chauhan said. The availability of chana with the government is low as compared to last year, and it may end up procuring more chana to keep the scheme running.

 

RETAIL PRICES

Interestingly, the declining trend in wholesale prices of pulses is yet to be reflected at the retail level. The all-India average retail price of chana dal is currently at INR 9,451 per 100 kg, which is up 6.2% from the retail price in August. The all-India average retail price of urad, on the other hand, is largely steady at INR 12,498 per 100 kg, compared with INR 12,487 per 100 kg in August. Only the average retail price of tur was down 1.3% from August, at INR 16,306 per 100 kg. 

 

Consumer Affairs Secretary Nidhi Khare Tuesday upbraided retailers for the persistent high prices of pulses despite wholesale prices falling and warned that the government would take action if the trend continued. Chairing a meeting with the Retailers Association of India and major organised retail chains, Khare said the diverging trends between wholesale and retail prices are indicative of increasingly unwarranted margins that retailers are extracting.  End

 

Edited by Rajeev Pai

 

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