Prices likely to rise 25% on festival demand, fall in imports due to low global output.
The price of pulses is likely to rise by at least 25 per cent this year, on a steep fall in estimated output in other major producing countries such as Australia, Canada, US and Myanmar.
The prices here are determined by global developments, as nearly 17 per cent or three million tonnes of India’s yearly pulses’ consumption of 18.5-19 mt is imported.
Excessive rain caused inundation in the major sowing area in Australia and Canada, the two major exporting countries to India. Consequently, the crop is likely to decline by 50 per cent in Australia, as farmers could not sow the seeds in time. Although farmers in Canada aggressively re-planted the crop damaged in the flood, output is estimated to decline by at least 20 per cent this year.
Myanmar is another supplier of urad and tur to India, which are 60-65 per cent of our total annual import. But the crop is likely to remain low in Myanmar as well. Consequently, overall supply here from abroad is estimated to decline to half the norm, or around 1.5 mt this year.
According to an estimate by the Union agriculture ministry, total sowing of pulses fell 11 per cent to 9.93 million ha as on August 18, as compared to 11.16 m ha around the same time last year. This was despite a record rainfall this season. The India Meteorological Department reported 26 per cent above normal rain and the highest weekly fall during the current season for the week ended August 19.
| THE GLOBAL SCENARIO Balance sheet of pulses (2010-11) | |||||
| Country | Acreage (mn ha) | Percentage of global acreage | Production (mn tonnes) | Percentage of global production | Yield (ha/kg) |
| India | 26.0 | 75 | 16 | 56 | 600 |
| Canada | 2.6 | 8 | 5.2 | 18 | 1,900 |
| Australia | 1.5 | 4 | 1.8 | 6 | 1,100 |
| US | 1.1 | 3 | 2.3 | 8 | 1,900 |
| Myanmar | 3.3 | 10 | 3.5 | 12 | 980 |
“Many farmers migrated to other more remunerative crops this year, including cotton and soybean, as the price of pulses remained low this season after hitting a high last year,” said Pravin Dongre, president of the India Pulses and Grains Association, earlier known as the Pulses Importers Association.
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When prices of major varieties of pulses, including tur and urad, hit a record high of around Rs 100 a kg in retail markets, the government intervened and started selling imported pulses of these varieties at Rs 40 a kg through the ration shops of the Public Distribution System (PDS). The intensified import at the government subsidised rates resulted in a dramatic price decline.
“The lower acreage is the result of government intervention to pull the price down. Therefore, we urge the government to procure pulses at the minimum support price (MSP) and allow nationwide distribution through PDS,” said Dongre.
In the past three days, lemon tur has surged Rs 175 a quintal; it traded at Rs 2,875 a qtl on Tuesday at the Vashi wholesale market due to fear of low supply from abroad and rising festive demand from local markets. Similarly, imported urad of the Burmese variety has risen by Rs 100 a qtl to trade at Rs 3,700 a qtl. In New Delhi, wholesale tur and its dara variety moved up by Rs 100 each to Rs 3,000-3,500 and Rs 4,400-4,800 per qtl, respectively.
“Meanwhile, the gradual reduction in areas under pulses cultivation has prompted a number of Indian companies to look for large land holdings in African countries. Many are in talks with the government of Ethiopia to buy land to plant pulses there. Since, the agronomical condition is similar to India, growing of pulses would help reduce dependence on existing suppliers,” said Bimal Kothari, vice-president of IPGA. He emphasised the need to increase yield in India, currently the lowest in the world.
Sudha Acharya, an analyst with Kotak Commodities Services, said, “The prices of pulses are likely to rise by at least 25 per cent this year on sustained festival demand and lower supply from overseas.”