Informist, Monday, Sep 2, 2024
By Pallavi Singhal and Shreya Shetty
MUMBAI/NEW DELHI – Notwithstanding the slight moderation in tur prices recently, a likely dip in imports and the upcoming festive demand is likely to push up prices of the pulse in the country, according to agriculture experts.
“There is no doubt that there is a tur shortage in India. With festive demand upcoming, upward pressures on prices of the commodity are going to rise. There is no country that will be able to export as much tur to India as it needs," agriculture economist Deepak Pareek said.
The issue with tur has been that its domestic consumption far outstrips its domestic production. As per the government’s third advance estimates, the country's tur production was estimated at 3.4 mln tn in the 2023-24 crop year (Jul-Jun) even as average consumption was estimated at 4.5 mln tn. Of the total consumption, the country needs almost 900,000 tn for festive demand in the next three months (Sep-Nov), Pareek said.
Sep-Nov is the highest consumption period, and generally, the consumption is about 900,000 tn -1.2 mln tn during this period. India needs a bare minimum of about 900,000 tn as there has been a demand destruction of about 200,000 tn because of unavailability and high price, Pareek said.
Prices of tur have been ruling high since June last year. According to the Department of Consumer Affairs data, the retail price of tur dal is 163.81 rupees per kg as of Sep 1, up 15.7% from a year ago.
According to market experts, the recent softening of prices is unlikely to be sustained. "Prices softened on the back of cheaper imports from Myanmar as their currency depreciated. However, with their crop already on the verge of getting exhausted, India will have to look to other players," Delhi Grain Merchant Association Vice President Gaurav Gupta said.
India, the third-largest importer of tur dal in the world after the US and Canada, imports most of its tur dal from Mozambique, Malawi and Myanmar.
India, which has already imported over 200,000 tn of the commodity in Apr-Jun this year, can import only another 200,000 tn in the coming three months due to low supplies globally, according to Gupta.
"There are negligible amounts of imports that are trickling into India. We have already taken almost all of Burma's (Myanmar's) inventory. Sudan's entire crop is here too," Gupta said. "There is only about 60,000-70,000 tn of tur which can come in from Tanzania and almost the same number from Mozambique. Even if we get another few thousand from these nations, it will not be enough."
According to the commerce ministry data, India imported 350,535.8 tn of tur in the first six months of 2024, down 14.5% from a year ago.
As per trade sources, there have been several issues with India’s tur imports from various countries, including the shortage of shipping containers and internal issues in exporting countries. Only earlier this year, tur shipments from Mozambique were disrupted and resumed only in August after intervention by the Ministry of External Affairs.
However, with lower imports coming into the country and the domestic crop output expected only in late November, tur prices are expected to face upward pressure.
DOMESTIC STOCKS
While there are no official figures on the estimated stock of tur available in the country, millers paint a grim picture.
"There is less than 200,000 tn of desi tur (Indian tur) available in the country even if we exaggerate the number. There is a severe shortage. Almost 50% of the tur mills are shut this season in Akola and those that are running are only processing imported tur which is trickling in from Chennai port," Avinash Bhala, chief executive officer of GHB Group, said.
Furthermore, though kharif tur acreage has been higher this year, the ongoing heavy rains in Karnataka and Maharashtra, the main tur-growing regions in the country, have dampened expectations of a good crop for the upcoming season.
The kharif acreage under tur in the country has risen 12% on year to 4.58 mln ha from 4.07 mln ha a year ago, as per the latest data. The cumulative southwest monsoon rainfall in Karnataka and Maharashtra has been 24% and 26?ove normal, respectively, as of Sep 1.
"Heavy rainfall has destroyed tur crops at their flowering stage, but it is too early to predict a loss in output," a member of the India Pulses and Grains Association said. "The crop can still be re-sown because it happened within the 90-day crop growing window," he said.
However, such long periods of moisture can lead to a rise in infestations, which will cause crop damage, Pareek said.
The India Meteorological Department, in its advisory on Friday, asked tur farmers to manage ash weevil, root grub menace, and phytophthora leaf spot with pesticides and uproot and burn plants affected by sterility mosaic disease.
Patchy rains have caused significant damage to India’s output over the last two years and have led to a sharp fall in production of tur from 4.22 mln tn in 2021-22 to 3.31 mln tn in 2022-23 and 3.39 mln tn in 2023-24, according to the government's third advance estimates of food grains production.
While the government had expected higher output in the current kharif season on account of higher acreage, market participants and traders brace for lower production, estimating it to fall to approximately 3.30 mln tn.
While market participants expect prices of tur dal to rise by at least 10-12 rupees per kg in retail markets, prices of tur in wholesale markets are expected to rise by a minimum of 300 rupees per 100 kg. Currently, prices of desi tur at Akola in Maharashtra are around 10,000-11,000 rupees per 100 kg, sharply higher the minimum support price of 7,550 rupees per 100 kg.
The India Pulses and Grains Association, in its weekly outlook report released today, said that it sees tur prices rising due to tight supply and renewed demand.
"Tur prices increased in the week ending Aug 31 due to fewer sellers at lower prices, increased demand from millers covering short-term needs, decreased seller interest in Burma (Myanmar) due to limited stock, shipment delays from Africa, mixed crop conditions in Maharashtra and Gujarat, with some areas hit by excessive rainfall and critically low domestic inventory levels," the report said.
Prices are expected to stabilise by the end of November once the domestic crop starts arriving in the market. Tur will start arriving by the end of November, as against normal December, as early rains in Karnataka led to an early sowing of the crop, Rahul Chauhan, director of IGrain India, said.
Prices are likely to ease further by early next year when the entire Indian crop has been harvested. "However, prices are expected to stay well above the minimum support price," Chauhan said. End
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