Price of pulses likely to remain under pressure for next 3-4 months

Trading at a 40 per cent discount to the central government’s minimum support price (MSP), the price of pulses is likely to remain under pressure for the next three to four months, thanks to a sharp rise in availability.

Deficient rain in some major pulses’ growing pockets of Maharashtra have affected the tur (red gram) and urad (black gram) crops. The kharif output is projected, by the first official estimate, at 9.22 million tonnes (mt), down from 9.34 mt in the same period last year (and total production at 24 mt for 2018-19). Yet, availability will be up, due to around 4.5 mt of stocks with state agencies, primarily the National Agricultural Cooperative Marketing Federation of India (Nafed), and a spurt in import.

Since demand is stable, the excess is likely to keep pressure on prices.

“The (central) government tried to restrict import, to stop falling prices in local markets. But, the draft of the notification gave room for traders to challenge it in court and it was stayed. Now, import is coming in large quantity from Myanmar and Africa at a price much below the level in India,” said Sri Prakash Goenka, director at U Goenka & Sons, a big trading house here.

Compiled by BS Research Bureau

Prices have fallen by three to five per cent over the past month. Tur is Rs 3,500-3,600 a quintal; its MSP is Rs 5,600. Traders have started importing from Africa at a landed cost of Rs 1,800-1,900 a quintal (that from Myanmar is Rs 2,800-2,900 a quintal. So, too, for other varieties of pulses, where the spot market price is 30-40 per cent lower than their respective MSPs.

Nafed has started auctioning of pulses that were procured during the previous rabi season at the MSP. “We are doing so at the market-driven price,” said Union food minister Ram Vilas Paswan during a recent visit here. In other words, sale at a big loss;this could hit MSP operations for this season.

“Since the new-season harvests have already started, prices are unlikely to move up from here in the next few months,” said a sector veteran.