Pulses prices plunge from all-time highs; here’s why.

Thanks to news of robust kharif sowing and liberal release of government stocks, retail prices of key pulses have declined sharply in major markets in recent weeks and could plunge further in coming days, trade sources and government officials said. While pulses inflation, as gauged by the Consumer Price Index (CPI), rose an annual 27.5% in July, pushing overall food inflation to 8.4%, the prices of these protein-rich staples have since started declining fast.

The price fall was witnessed across metros and other major cities: The price of tur, for instance, fell 24% between April 29 and September 4 in both Delhi and Mumbai; it fell by 17% in the month to September 4. Similarly, urad, moong and masoor also turned cheaper during the period.

Food ministry sources told FE that prices would decline sharply once kharif pulses start arriving in the market by October and November. “Because of our measures to intervene in the market by creating buffer stocks and higher kharif sowing, the prices are expected to fall in the next couple of weeks,” food minister Ram Vilas Paswan said.

The agriculture ministry’s latest data say area under pulses grew 34% in the current kharif season, compared with the previous year. Encouraged by the price spike, farmers have resorted to pulses sowing, taking the area under this crop to 142 lakh hectares. Area under tur has gone up by 47%, while urad and moong areas have risen 27% and 36%, respectively. “Due to widespread rains this monsoon, we are expecting a bumper kharif crops. Besides, soil moisture has improved, boosting forthcoming rabi pulses output,” an official said.

Meanwhile, the food ministry has asked Food Corporation of India (FCI) and farmers’ cooperative Nafed to prepare a state-wise roadmap for procurement of pulses. The ministry has told these agencies to commence procurement of moong in Karnataka immediately as the new crop has started to arrive in the markets.

For creating buffer stocks, the government has already imported about 1 lakh tonnes of pulses. Besides, the government agencies like FCI, Small Farmer’s Agri-Business Consortium and Nafed have purchased more than 1.2 lakh tonnes of pulses from the open market for creating buffer stocks. So far about 40,000 tonnes have been allocated by the Centre to the states from the buffer stock for distribution at not more than Rs 120 per kg. These pulses are provided to the states — tur at Rs 67 per kg and urad at Rs 82 per kg. “The government agencies have been also been directed to gear up for domestic procurement for coming crop of pulses, which is expected to good this year,” an official said.

Due to a deficient monsoon, pulses production fell to 16.47 million tonnes (mt) in the 2015-16 crop year (July-June), from 17.15 mt in the previous year. In 2013-14, output was over 19 mt. In quantity terms, pulses imports in 2015-16 stood at 5.79 mt against 4.58 mt reported in 2014-15. Domestic consumption is around 21-22 mt.

Earlier, India had signed a memorandum of understanding with Mozambique to import 3. 75 lakh tonnes of pulses during 2016-19. Besides Mozambique, the government is also exploring the possibility of importing pulses from African countries like Malawi through leasing of farms for growing pulses to meet domestic demand.

Source : financialexpress.com