Pulses to remain benign in short-term on expectations of new crop arrival

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Pulses prices have shot up during the recently concluded monsoon season, especially Kharif pulses, owing to lower production estimates compared to the last year, propelled by the erratic rainfall distribution in the key producing states like Maharashtra and Karnataka, and lower crop area this year as farmers shifted to competitive crops.

Tur (Arhar) dal prices have gained by about 25 per cent since June 2022 while, urad prices have surged by about 21 per cent during the same period in main mandis, and prices of moong have upped by about 13 per cent.

Chana, which is the key pulse crop in India and is cultivated in the Rabi season, remained supported during the same period due to a rally in the Kharif pulses but higher supplies of chana will keep the prices sideways over the medium-term.

Looking forward, due to the onset of Kharif crops’ arrival, prices are likely to remain steady during October-December 2022 quarter, as we witnessed during most of September 2022, wherein prices capped 2 per cent range. Now, much will depend on Rabi Crop Planting’s intention, especially for China

Whether farmers will opt for more area amid a huge pileup of carryover stocks or shift area to other remunerative crops will drive the sentiment to some extent but nothing will change the outlook of Chana until we have clarity about crop progress in the Rabi season.

A look at the stock position and procurement:

Chana stocks with NAFED are around 30.5 Lakh MT, of which 15 Lakh MT will go into the buffer for states. Chana procurement by NAFED: Chana procurement stood at 25.92 Lakh MT. The state-wise breakup is as follows – Maharashtra 7.60 Lakh MT, Gujarat 5.59 Lakh MT, Madhya Pradesh 8.02 Lakh MT, Karnataka 74 KMT, Andhra Pradesh 72 KMT, Rajasthan 2.99 Lakh MT and Uttar Pradesh 26.45 KMT.

The procurement program is completed across all the above-mentioned states. Government Chana procurement target for 2022-23 is 29 Lakh MT, against which 25.92 Lakh MT procurement is completed, reaching 89 per cent of the target. In Maharashtra, procurement reached 98 per cent of the target, in Gujarat 104 per cent, in Madhya Pradesh 92 per cent, and in Rajasthan 50 per cent.

Origo pulses crop production estimate (for the crop year 2022-23)

Tur production for 2022-23 is estimated to drop 4.64 per cent YoY at 3.66 MMT against 3.84 MMT in 2021-22. Tur acreage is down by 4.78 per cent YoY while yield is estimated flattish from the last year.

State-wise production breakup

Maharashtra’s production is projected to be lower by 12.89 per cent YoY at 1.02 MMT and Karnataka is seen down by 8.08% at 0.86 MMT while production would increase in Madhya Pradesh and Uttar Pradesh.

Urad production for 2022-23 is estimated to fall by 7.92 per cent YoY at 1.60 MMT against 1.74 MMT in 2021-22. Urad acreage is down by 6.27 per cent YoY while yield is estimated to drop by 1.77 from the last year. There is more downside risk to the urad crop as rains affected the yield in Madhya Pradesh.

State-wise production breakup

Production in Madhya Pradesh is projected to increase by 10.15 per cent to 0.51 MMT, while production in Uttar Pradesh is estimated to decline by 4.23 per cent to 0.36 MMT and Maharashtra is seen down by 22.14 per cent to 0.22 MMT.

Moong production for 2022-23 is estimated higher by 3.49 per cent YoY at 1.53 MMT against 1.48 MMT in 2021-22. Moong acreage is down by 6.09 per cent YoY while yield is estimated to be higher by 9.57 per cent from the last year.

Table 1: Tur Production Estimate-CY: 2022-23