Pulses prices have been on consistent bull run since last 1 year and despite multiple steps being taken, bull seems far from getting any tired. Most of the pulses rates have doubled in last 12 months and scenario is likely to remain for coming festival period as well.
If we look at fundamentals it all started with anticipated shortfall in production which was getting factored in primarily in Moong and Tur dal. Later it got fuel from poor monsoon and damage in standing crops in some regions. So far the story was pure fundamental based and it triggered price rise to the extend of 30-40% for like to like period of last year. while all these natural factors were in play, unfortunately Govt failed to anticipate and was slow to react to it. Imports were ordered but few thousand tonnes against demand of multi million tonnes would never be enough. It is generally assumed that if Govt takes some strict steps and order extra imports/ tighten hoarders to control, prices generally comes down. But that scenario is likely when price rise is driven more by pure speculations & less on fundamentals.
This time Teji (Bull run) was primarily driven by Fundamentals like Shortage, poor monsoon, limited import pipelines and ever increasing demand of Indian consumers This was supposed to have just limited to 2 main dals Moong & Tur. Sustained bull run and inaction from responsible authorities gave clue to Bulls and they triggered artificial shortage across Pulses be it Massor, Urad, Chana etc. Today we stand and look at below price points in nearby retail stores.
All in all my personal view is that prices are stretched way too far and a sharp correction of 15-20% is just round the corner. Steps are being taken to increase domestic production like increase in MSP but a lucrative crop incentive, production subsidies, assured procurement and crop insurance will be the key to increase domestic availability.
Above will be short-term measure and to make availability a sustainable feature we need to look at alternates & the next step will be to have a "Post Harvest Management" process in place. (Most likely my next blog topic).
We are consumption driven country and we have to ensure we are putting more efforts to speed up infra & logistics sector development. Our farmers are more than capable of producing to feed every countryman all we need to do is to support them with good returns and ensure minimal losses on account of supply chain and storage.
If we look at fundamentals it all started with anticipated shortfall in production which was getting factored in primarily in Moong and Tur dal. Later it got fuel from poor monsoon and damage in standing crops in some regions. So far the story was pure fundamental based and it triggered price rise to the extend of 30-40% for like to like period of last year. while all these natural factors were in play, unfortunately Govt failed to anticipate and was slow to react to it. Imports were ordered but few thousand tonnes against demand of multi million tonnes would never be enough. It is generally assumed that if Govt takes some strict steps and order extra imports/ tighten hoarders to control, prices generally comes down. But that scenario is likely when price rise is driven more by pure speculations & less on fundamentals. This time Teji (Bull run) was primarily driven by Fundamentals like Shortage, poor monsoon, limited import pipelines and ever increasing demand of Indian consumers This was supposed to have just limited to 2 main dals Moong & Tur. Sustained bull run and inaction from responsible authorities gave clue to Bulls and they triggered artificial shortage across Pulses be it Massor, Urad, Chana etc. Today we stand and look at below price points in nearby retail stores.
Above will be short-term measure and to make availability a sustainable feature we need to look at alternates & the next step will be to have a "Post Harvest Management" process in place. (Most likely my next blog topic).
We are consumption driven country and we have to ensure we are putting more efforts to speed up infra & logistics sector development. Our farmers are more than capable of producing to feed every countryman all we need to do is to support them with good returns and ensure minimal losses on account of supply chain and storage.
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