Agri Business

Government’s pulses production estimate is overstated

G. CHANDRASHEKHAR | Updated on September 23, 2021

Market participants unlikely to be influenced by overstated production data, even if from official sources

The first advance estimate of Kharif crop production released by the Ministry of Agriculture on September 21 has placed the Kharif 2021-22 pulses crop production at 9.45 million tonnes, lower than the production target of 9.82 millionl tonnes for the season.

The planted area for pulses this season has increased by about 300,000 hectares to a new high of 14 million hectares. However, the temporal and spatial distribution of the South-West monsoon rains has been less than satisfactory, with at least two breaks.

As of September 17, the country had an overall deficit of 4 per cent in total rainfall. Ten out of the 36 meteorological subdivisions showed deficient precipitation. Some subdivisions are borderline cases, close to the deficient zone. There is nothing to suggest that yields have improved dramatically.

Insofar as pulses are concerned, the government’s first estimate for 2021-22 has overstated pulses harvest size by at least one million tonnes. This author places the crop size at not more than 8.5 mt. One may recall, even in the 2020-21 season, the government first estimated the Kharif pulses crop at 9.3 mt; but gradually reduced that number in the subsequent estimates.

The fourth estimate for 2020-21 showed the Kharif pulses production at 8.69 mt which in reality, this author believes, was closer to 8.5 mt. This year too, the government may gradually reduce the harvest size in subsequent estimates. The next estimate is due in February 2022.

The market is the final arbiter of supply and demand. Market participants are unlikely to be influenced by overstated production data, even if from official sources. To be sure, over the coming weeks, the market will face harvest pressure and prices may show a softening tendency. That should lull no one into complacency. Once arrivals begin to taper, prices will begin to firm up again.

It is also becoming increasingly clear that the planted area for Kharif pulses is reaching its saturation point. It is unlikely to increase substantially in the years ahead. Therefore, there is no choice but to ensure a vertical growth that is growth in yields, which are relatively low.

Technology options in pulses inputs should be considered seriously to ensure a steady expansion in output. The strong gains of production in recent years should not be lost but consolidated as demand is expected to continue to expand. It would be tragic if the country were to go back to the situation of massive imports running to 5-6 mt.

(The author is a policy commentator and agribusiness specialist. Views are personal)

Published on September 23, 2021

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