DROUGHT AND low government stock have caused an increase in the prices of toor after a gap of almost two years. Prices crossed the government declared minimum support price (MSP) in wholesale markets in the state. Traders said this will continue till the new crop is ready.
Earlier this month, toor prices crossed the MSP mark of Rs 5,675 per quintal in wholesale markets of Latur and Akola. Latur, the hub of toor trade is a price setter for the lentil in the country.
On Monday, the average traded price of the dal, also known as arhar, at the Latur market was Rs 5,850 per quintal while it was Rs 5700 per quintal at the Akola market. Sources said prices were expected to rise further in the coming months in both the markets.
At Latur’s wholesale market, Nitin Kalantari, CEO of Kalantary Foods — a leading dal miller and trader — said he expected prices to cross Rs 6,000 to 6,500 per quintal mark this year.
“In the last two years, prices were down which saw farmers moving away from toor. Also the effects of drought were felt in major toor growing areas of Maharashtra, Karnataka and other parts of the country,” he said.
Government stock, Kalantari said, had almost dwindled leading farmers and traders to stock the lentil in anticipation of future price rise.
The central government has revised its production estimates for toor dal from the target of 4.5 million tonne to 3.68 million tonne. The price rise in wholesale markets has made its presence felt in retail markets too. In Pune’s Gultekdi market, toor dal prices have seen a steady rise from the Rs 65 per kg a few months back to Rs 85 per kg.
Nitin Nahar, a wholesale dal trader, also cited low productivity and drought as reasons for the price rise. “Most dal prices are above Rs 50 to 60 per kg,” he said.
A lot hangs on the monsoon, which is predicted to be near normal by the Met department. In case the monsoon fails or there are large dry spells, dal prices could shoot up further in the later part of the year.
Back in 2016, the retail prices of toor dal had crossed Rs 200 per kg mark as a result of a sharp dip in area and productivity. The drought of 2015-16 had taken its toll on the acreage and low government stocks had pushed up the prices in wholesale as well as retail markets in the country. Imports were called in to address the situation.
Toor acreage had seen a significant rise in 2017 but general unpreparedness of the government procurement process and availability of cheap imports had pushed down prices in the wholesale market.
As government agencies continued offloading their procured toor in open markets, wholesale prices remained below the MSP mark in 2017 as well as 2018 despite a dip in the acreage.