Pulses set for a bull run

Actual production runs the risk of declining between 12 and 15 per cent

The stage is set for the market sentiment on pulses to change. For an extended period of time, farm-gate prices have been ruling at or around the minimum support price. Indeed, chana or gram (desi chick pea), the dominant crop accounting for 50 per cent of the country’s total pulses output, ruled even below the MSP for 15 months.

This followed a sustained rise in pulses production since 2011-12 (from 17.1 million tonnes to 18.3 mt in 2012-13 and then on to 19.3 mt in 2013-14), and augmented by continuing duty-free imports. All this is set to change with the south-west monsoon playing truant.

At 7.6 million hectares, acreage for pulses this year has lagged last year’s 8.9 million hectares. Tur/arhar and moong plantings have lagged by 15-20 per cent vis-à-vis last year.

Importantly, erratic rainfall has affected input management and also the agronomic practices of growers. This is expected to hurt the yields which, in any case, are rather low at about 650 kg a hectare.

Rising trend

The kharif 2014 pulses production target is 7 mt, something that is not going to be achieved. In each of the last two years, actual output in the kharif season was 6 mt.

With lagging acreage, suspect input management and possibility of lower yields this year, actual production runs the risk of declining 12-15 per cent.

Worse, signs of the beginning of the withdrawal of south-west monsoon means there may not be sufficient subsoil moisture for the Rabi season which traditionally accounts for two-thirds of the total annual production.

Chana is the dominant rabi pulse crop and its record breaking streak of last three years runs the risk of coming to an end.

From 7.7 mt in 2011-12, chana harvest expanded to 8.8 mt in 2012-13 and then on to 9.9 mt in 2013-14. This consistent rise in production certainly prevented the price rise .

Below-normal monsoon this year is likely to provide the trigger market participants have been waiting for.

From the current levels of about ₹3,000 a quintal, chana prices are set to steadily rise in the coming weeks and months with the potential to test ₹4,000 a quintal before year-end.

In this emerging bullish scenario, a comforting factor is the record production of yellow peas in origins such as Canada.

To fill the shortfall, India is likely to import larger volumes of yellow peas available at more economical prices (less $450 a tonne). It is well known that yellow pea flour is freely blended with chana flour in our country.

Prices of other pulses — mainly urad and moong — are also set to rise by 10-15 per cent.

So, pulses are likely to begin to contribute to food inflation.

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