Urad prices surge 20% in two months on incessant floods, crop damage

Other pulses follow suit; govt allows imports and release of buffer stock to cool prices

Urad prices have surged 20 per cent in the last two months owing to crop damage in the kharif sowing period following incessant rain and floods in the monsoon season. Data compiled by government-owned Agmarknet portal showed urad prices have jumped to trade at Rs 70 a kg in the benchmark wholesale Latur mandi in Maharashtra compared to Rs 58 a kg in the beginning of October. 

This is significantly above the minimum support price (MSP). In retail, urad dal trades at Rs 100 a kg.

All other pulses, including milled (dal) tur, gram and masur have also become costlier following urad, which is hurting the middle class consumers. “Urad prices have run quite a bit in the last two months due to crop damage in major growing areas. Devastating floods during the monsoon have hit the standing kharif crop,” said Bimal Kothari, managing director, Pancham International, a pulses trader and importer. 

However, Kothari expects the price of pulses, led by urad, to decline in the coming months.  This is because extended seasonal rainfall has left adequate soil moisture in the field, thereby leaving the potential of a bumper rabi pulses crop this year.  Meanwhile, sowing area under urad bean reported a marginal decline to 3.88 million hectares this year compared to 3.96 million hectares last year. 

But trade sources estimate that around 20 per cent urad crop has been damaged due to floods in Maharashtra, Madhya Pradesh and other major growing regions. To ease the price pressure, the government has allowed urad imports to the tune of 400,000 tonnes for the one-year period ending December 18, 2019. 

Additionally, the government has also allowed urad imports of 250,000 tonnes, which needs to be completed by March 31, 2020. Trade sources, however, believe that full quantity of urad imports would be impossible during the specified time. India imports urad primarily from Myanmar. While harvesting of early season crop is complete, farmers in Myanmar are set to sow the second round of urad crop for harvesting by February-end.

“Given that the shipment from Myanmar farms to Indian ports takes at least 20 days, the import of full quantity by March 31, 2020, would be impossible. Hence, the government must extend the timeline by at least one month to achieve full quality of urad import,” said a senior industry official. Apart from imports, the government has also announced release of 850,000 tonnes of various pulses from its buffer stock.

“The government should release only urad, which is selling above MSP, from the buffer stock. All other pulses are selling below MSP and therefore buffer stocks of these should not be liquidated. Apart from this, the government should actively consider relaxing import norms for urad,” said Jitu Bheda, chairman, India Pulses and Grains Association (IPGA).

Selling of pulses from the buffer stock though is a continuous process. Kothari, too, believes that further liquidation of buffer stock may not have much impact on prices. With an estimated production of around 25 million tonnes, India is self-sufficient in pulses but imports occasionally to meet the deficit.