Pulse prices move up on lower kharif output estimates

Lower kharif production estimates fuel the rise; fall in global output also likely to keep prices up

The prices of pulses have started rising, due to lower production estimates for the kharif season.

Data from the Union ministry of consumer affairs shows the price in wholesale markets has risen up to 6.6 per cent so far this month. The government had forecast a 26 per cent decline in output at 5.2 million tonnes (first advance estimate) this kharif season, against a target of seven mt (and 6.02 mt in the kharif of 2013-14). The kharif season contributes around 40 per cent of annual pulses’ production.

A fall in global output is likely to keep prices up in India even if our production achieves last year’s level. Canada, for example, estimates its output (mainly peas and lentils) at 5.5 mt this year as against 6.1 mt last year. India imports pulses mainly from Canada, Australia and Myanmar.

“With the kharif output estimated to remain low, our major focus for the rabi season would be to cover 3.37 million hectares of unsown area. The government has sanctioned an additional Rs 300 crore for rabi,” said J S Sandhu, agriculture commissioner at the Centre.

A delayed, erratic and deficient monsoon in the kharif season has led to less of sowing, at 10.11 mn ha as compared to 10.81 mha in the same season last year, a fall of 6.5 per cent.

India has been a major importer of pulses. During 2012-13, about $2.3 billion (3.84 mt) was imported. In the following year, it was $1.7 bn for 3.05 mt of import. Between April and August, the first five months of this financial year, there was import for $0.96 bn (1.07 mt), a rise of 18.2 per cent in value terms over the previous year.

  An Assocham study has forecast a possibility of further increase in import this year, on rising domestic demand, estimated to be 23 mt this year.

“It would not be surprising if the prices of urad and tur increase further, at least by 15 per cent, starting from Diwali and up to the third week of January 2015. The inefficient supply systems, coupled with inherent weaknesses in regional markets, are expected to further contribute to higher prices,” said the study. “Chana is likely to trade steady, with an upward bias on festive buying and fall in warehouse stocks. The extent to rise would be capped with Nafed’s decision to sell 1,000 tonnes of chana everyday. Nafed holds around 123,415 tonnes of chana in its 45 warehouses across Rajasthan,” said Prerana Desai, an analyst with Emkay Commotrade.