Prices may rule lower as global market is saddled with ample stocks

With monsoon playing truant during its early stages, the area under pulses is estimated to be lower than last year.

But traders, exporters and officials are confident that showers in August and September could help the crop and most importantly, lead to better yield.

According to the Agriculture Ministry’s estimate, the area under pulses is likely to be 101.69 lakh hectares (lh) against 104.41 lh last year.

“Though the area is lower, we expect yield to be better this year and make up for whatever loss is there in terms of coverage,” said Pravin Dongre, President, Indian Pulses and Grains Association.

“There is a small drop in moong and tur acreage. Reports are conflicting on the effect of rain over yield. But I see no cause for concern with regard to pulses production as kharif crop will be good,” said B. Krishnamurthy, Secretary, Tamil Nadu Pulses Importers Association.


Pulses growing regions in Madhya Pradesh, Maharashtra, Uttar Pradesh and Andhra Pradesh have been well covered by monsoon this year, raising hopes of a better crop.

These States contribute over 50 per cent of pulses production.

The problem areas are Gujarat, where only 60 per cent of the normal area has been covered, and Rajasthan, where monsoon coverage was tardy during June-July.

“South Maharasthra, western Maharashtra and Konkan regions have got good rain. Only the Marathwada region should face problem,” said Dongre.

In Madhya Pradesh, the area under various pulses has increased up to 20 per cent.

A trade source said that rain still continues in interior Maharashtra and one would have to wait to know what was happening.

However, Krishnamurthy said that rain is over and there was no fear over any damage to pulses crop.


In view of chana (gram) being a rabi crop, kharif pulses output makes up only one-third of the total pulses output every year.

Still, other pulses such a tur, moong and arhar contribute almost equally during kharif and rabi.

“Sowing of urad is likely to be higher,” said Krishnamurthy. Hopes of better yield and a kharif production of 6.40 million tonnes (mt), same as last year, would mean that imports will be tempered down.

Last year’s kharif production was lower than during 2010 when a record 7.12 mt were produced.

Overall pulses production during 2011-12 ending June was 17.28 mt against 18.24 mt during 2010-11.

Pulses production has been above 15 mt in the last two years and this year, too, the trend is likely to continue.

The Government’s policy of promoting production of pulses seems to be paying off to some extent, said Dongre.

“We are near self-sufficiency in pulses production. Therefore, imports will drop,” said Krishnamurthy.


“Imports could be around last year’s level of three million tonnes,” said Dongre.

The view in trade circles is that there may not be any need for imports of almost all pulses, barring green and yellow peas.

“Imports are also mired in regulatory issues. Besides plant quarantine norms, the new Food Safety Act discourages imports. Volatility in the foreign exchange market is also a concern,” said Krishnamurthy.

On the other hand, if required, there is plenty of material available for imports, according to Dongre.

“Australia has harvested a record chickpea crop. Canada has plenty of lentils and yellow peas and pulses are also available in Myanmar,” he said.

Price forecast

This situation of ample supplies in the global market is likely to reflect in pulses prices in the domestic market.

“Prices could rule in ranges,” said Dongre.

“Prices will continue to rule soft due to possibility of cheaper imports,” said Krishnamurthy.

The Centre has raised the minimum support price (MSP) for pulses this year. The MSP for urad, for example, has been increased to Rs 4,300 a quintal from Rs 3,300 last year. On an average, the MSP for pulses has been increased 16 per cent.

In contrast, market prices are currently ruling lower. Urad is currently ruling below Rs 3,800.

“Prices could be lower until the kharif marketing season begins in October. In case, the Government launches market intervention operation, then prices could tend to rise,” said a trade source.


(with inputs from Our Rajkot, Indore Correspondents)

(This article was published in the Business Line print edition dated September 19, 2012)
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