Indicus price monitor

Commodity for the week: ARHAR

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Arhar or tur, is turning out a record output for 2013-14. The crop which is the second most important pulse in the country is grown only in the kharif season and has benefitted from a good monsoon. The 2nd Advance estimates have put production at 3.34 million tonnes, exceeding the target for the year that is 3.2 million tonnes, and 10.67% higher than the previous year's output.

The prices of arhar have generally been on an uptrend; the average all-India wholesale price has been rising since the summer of 2012 and though there has been considerable stability over the year, prices have stayed above Rs 6500 per quintal since last November. Retail prices have been over Rs 69 per kg. since September.

There are many reasons why prices are not falling significantly, even with good output. To begin with, the MSP for 2013-14 fixed at Rs 4,300 per quintal was an 11.68% rise over the previous year. Though duty free import of arhar was allowed in March 2013, subsequent rupee depreciation and high domestic demand tempered pass-through of large benefits to domestic prices.