A decline in pulses production for two years in a row should normally have caused a spurt in India’s pulses import volume; but contrary to general expectation, physical arrival of imported pulses has been rather slow since the beginning of the new fiscal in April.
Enquiries with several traders across the country confirms the slowdown in physical arrivals. There is general consensus that in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes. “It is the outside limit and could be slightly lower”, asserted an executive of a large trading house.
Import volumes this year compare poorly with arrivals of 14.7 lakh tonnes (lt) in April-September 2011 and 13.0 lt during the same period in 2010.
What is worrisome is the composition of the import basket.
Well diversified imports including pigeon pea (tur/arhar), lentil (masur) and beans have now largely given way to yellow peas.
A significant part of the imported material so far has been yellow pea, the lowest priced pulse available in the world market today.
Actually, the commodity – used mostly as cattle feed in advanced economies - does not enjoy a natural demand in our country. Yet, imports continue because at $425-450 a tonne, it comes cheap and makes itself attractive for traders and consumers to mix it with more expensive pulses.
Most other pulses are really expensive quoting in excess of $650 a tonne. General buoyancy in agricultural commodity prices – mainly corn, wheat and soyabean - following weather aberrations in different parts of the world – including in the main drought in the US Midwest – has helped lift price of pulses too.
Even in the domestic market, despite a bumper crop of 76 lt chana (desi chick pea) harvested in April, prices are not at all consumer-friendly. Many traders have attributed this to excessive speculation and inventory built up by some operators.
Worse, a weak rupee has pushed the landed cost of imported pulses higher in the country. The offtake of pulses in the domestic market is rather sluggish, traders claim. Clearly, price elasticity of demand seems to be playing out. It is also believed that demand is getting compressed at higher prices.
According to government statistics, out of the 33 lt pulses imported in fiscal 2011-12, yellow peas accounted for 20 lt or 60 per cent. Many in the market still recall how in 2009 and 2010 State enterprises imported large quantities of yellow peas to augment supplies and rein in price rise, but failed to find a ready market within the country, and the government had to issue advertisements exhorting people to consume yellow peas.
Going forward, the import outlook appears less-promising.
The rabi pulses crop is still months away. With general expectation of a rebound in southern hemisphere crops, there is a clear possibility of a significant correction in the prices of major agricultural commodities such as grains and oilseeds in the first quarter of next year.
At that time, Indian rabi crops would also come into the market. The emerging situation of softer world and domestic prices can potentially spur consumption.