Ahead of what promises to be a good crop later in the year, traders of pulses are not very optimistic about good farmgate prices of commodities. With no significant boost in consumption, chances of pulses crossing the government-declared minimum support price (MSP) are slim, said market sources.
Since the beginning of the lockdown announced by the central government in March to control the spread of the Covid-19 pandemic, wholesale and retail prices of almost all lentils had seen a sharp rise. As people started hoarding daal in fear of an extended lockdown, prices continued to improve. However, supply to wholesale markets was affected as labour and transport problems caused disruptions in the supply chain. Farmers also kept stocking up their produce, especially tur, chana and masoor, which they had harvested earlier, rather than bringing it to the markets. As a result, the price of almost all daals had crossed the Rs 100 per-kg mark in retail markets.
But over four months down the line, as the country reports satisfactory crop conditions thanks to the timely and robust monsoon, markets do not appear optimistic about the bullish trend in pulses continuing. The latest sowing report released by the Agriculture Ministry shows an year-on-year increase in sowing of pulses. As against the 114.77 lakh hectares of kharif 2019-20, farmers have sown pulses over 119.59 lakh hectares of area this season. Moongbeans have shown the highest increase in area, with sowing over 32.13 lakh hecatres as compared to 27.54 lakh hectares of last season. Acreage of other pulses has shown single digit rise in area. Farmers have reported satisfactory crop condition across the country.
The rise in area, however, will not be the major driver in determining wholesale prices as farmers bring their produce to the mandis later this year. Consumption pattern points to lukewarm demand, which will dictate prices, said Nitin Kalantri, of Latur-based Kalantry Food Products, a major dal miller and trader in the country.
“At the beginning of the lockdown, people stocked up their supply of daal and thus retail demand is unlikely to pick up in the days to come,” he said. Kalantri pointed out how wholesale prices of urad dal, which was Rs 105 per kg before the lockdown, has corrected itself to Rs 75 per kg.
“At Latur’s mandi, Urad beans were trading at Rs 7,000 per quintal before the lockdown, but since then prices have corrected itself to Rs 6,500,” he said. Most households have already stocked up on daal, due to lockdown and other factors, and they are unlikely to buy more in anticipation of the upcoming festive season.
Traders in Latur’s wholesale market say their consignments to urban centres like Mumbai, Pune and Kolhapur have dipped to almost 20 per cent of their normal value. “The present trend is expected to continue for the next two-three months as households continue to live off their stocked daal,” he said.
Another major problem is the continued closure of hotels, restaurants and catering business, which account for around 40 per cent of consumption of daals like chana and urad. “In case of a normal monsoon and good yields, we fear wholesale prices will be below the MSP, requiring government intervention,” said Kalantri.
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