India to build buffer stock of 2 million tonnes of pulses

MUMBAI (Reuters) - India on Monday approved the creation of buffer stock of 2 million tonnes of pulses as the world's biggest producer of the protein-rich food grains is set to harvest record crops.

Government agencies will procure 1 million tonnes of pulses from farmers while 1 million tonnes will be imported, the government said in a statement.

The prices of pulses such as green, black and red gram hit record highs earlier this year after back-to-back droughts curbed output in 2015.

But in the past few weeks, prices of some pulses fell below their minimum support prices (MSPs) as ample rains prompted farmers to cultivate them on more area.

India fixes the MSPs based on production costs and makes purchases if prices drop below the government-fixed rate.

India, which consumes nearly 22 million tonnes of pulses annually, sources yellow peas and lentils mainly from Canada and the United States, chickpeas from Australia and Russia, and green gram and pigeon peas from Myanmar.

(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)