Higher 'dal' prices spoil the broth for millers: CRISIL SME Tracker

In kharif 2019, sowing was delayed due to late arrival of the south-west monsoon

Crisil Research expects higher raw material prices following lower crop output in kharif 2019 to weigh on the operating margins and working capital cycles of small and medium enterprises (SMEs) engaged in milling dal (pulses) in fiscal 2020.

Given the seasonal nature of dal production and availability of raw material, SMEs, which make up around 80-85 per cent of the dal milling industry, have high working capital requirements. Raw material cost accounts for over 60 per cent of their revenue. Also, given that the industry is highly unorganised, millers have limited ability to pass on the increase in raw material