Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Indian output of pulses to hit record high, drag on prices -industry

Published 06/09/2016, 08:19 pm
Updated 06/09/2016, 08:20 pm
© Reuters.  Indian output of pulses to hit record high, drag on prices -industry

* Farmers cultivate pulses on record area after 2015 price rally

* Production of summer-sown pulses expected to jump 40 pct y/y

* New crop supplies could pull prices below govt-fixed price

By Rajendra Jadhav

JALGAON, India, Sept 6 (Reuters) - India's production of summer-sown pulses is likely to surge to a record high this year, dragging down prices of the protein-rich food grains after last year's sharp rally that prompted farmers to increase area under cultivation, industry officials said.

Higher output by the world's top consumer and importer of pulses could help Asia's No.3 economy rein in its headline inflation that hit a near two-year high in July on double-digit annual increases in prices of sugar, vegetables and pulses.

"Prices have been moderating and in some pulses they could halve from the peak due to bumper production," said Pravin Dongre, chairman of the India Pulses and Grains Association.

He estimated India's output of summer-sown pulses at a record 7.8 million tonnes this year, up 40 percent from a year ago. The government has not yet issued an official forecast.

"Last year, higher pulses prices were hitting consumers. Now farmers could suffer due to steep fall in prices," Dongre said.

The price 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 have softened with ample rains prompting farmers to cultivate more.

"I have reduced area under cotton to cultivate pulses on more area," said Sukhdev Nathu Mali, a farmer from Jalgaon district of western state of Maharashtra.

PRICES TO REFLECT NEW SUPPLIES, IMPORTS

As of Sept. 2, India's area under summer-sown pulses reached a record 14.2 million hectares, up 33 percent from a year ago, with the market already reflecting the expected bumper supplies.

"New season supplies of moong (green gram) have started and prices have fallen below the minimum support price (MSP)," said Nitin Kalantri, a miller in the western state of Maharashtra.

Prices of other pulses could fall below the MSP once supplies roll in from the new season crop, he said.

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

Rising imports are also expected to drag on prices.

"Canada and Australia are set to harvest record crops. They are consistently reducing prices," said a Mumbai-based importer.

Australian and Canadian farmers raised pulses area to cater to Indian demand. 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.

"It is necessary to protect Indian farmers from cheaper imports. Otherwise next year they will shift to other crops and again prices will rally," Kalantri said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.