Contrary to expectations, the acreage for Kharif pulses as of August 24 has held up quite admirably, at 13.1 million hectares, marginally below the 13.4 million ha this time last year. Despite low prices in the last one year, growers have continued to plant pulses.

It is unclear whether this is on account of the widely believed “poor supply response to prices under Indian conditions” or whether pulse growers want to continue to bet on the crop for one more season.

Be that as it may, despite the near-record planted area, yields are likely suffer this season because of aberrations in the spatial and temporal distribution of the South-West monsoon in the major pulse growing regions.

Indian yields are already notoriously low by world standards. The production target of 8.9 mt for pulses is unlikely to be achieved and on current reckoning, the harvest size may fall by 10 percent.

Weighed down by two successive large harvests, huge inventory overhang and sluggish offtake in the domestic market, pulse prices continue to rule below the government declared minimum support price. A fall in kharif harvest size combined with a highly restricted imported pulse pipeline is likely to support prices in the months ahead. The early signals are already visible.

In particular, uradbean (black matpe) planted acreage has slipped by half a million hectares to 3.70 ml ha (4.25 ml ha). This particular pulse is likely to witness tightening supplies in the months ahead.

Interestingly, apart from India, Myanmar is the only country in the world to cultivate uradbean. Following quantitative restrictions imposed by India last August, the internal market in Myanmar has collapsed and growers there have incurred huge financial losses. Now, the Myanmar government has asked its growers to switch to other crops given the unpredictable nature of Indian demand.

Interestingly, reports from Myanmar suggest that the country faces a shortage of sugar and that at least one million tonnes may be required to tide over the supply shortfall. At the same time, the world’s second-largest producer India is facing a sugar glut.

It should be possible for the two countries to enter into a barter trade — swap sugar for pulses. Pulses from Myanmar (toor/arhar, urad) can be imported in a phased manner over the coming months and can be supplied through the public distribution system to the really needy sections of the population.

According to an official release, the Commerce Ministry is finalising the agricultural export policy. It is necessary to leverage our bilateral and free-trade agreements such as SAFTA, APTA, ASEAN and others with South Asia and Southeast Asia. (see BusinessLine issue dated March 1, 2018)

Indeed, given large supplies and low prices within the country, pulses can actually make a small contribution to export promotion. It will help lift domestic prices from the current low levels. The Commerce Ministry must set off a dialogue with trade partners in the region (Bangladesh, Sri Lanka) and persuade them to import pulses from India. Will the Commerce Minister take note and act promptly?

The author is a policy commentator and global agribusiness specialist, Views are personal

Related Topics
comment COMMENT NOW