Pulses Inflation in India

IAS Prelims 2023

After onions, prices of pulses — a source of protein for every Indian — are now at a five-year high in some parts of the country. The gap between prices of food articles and non-food items is stark. Pulses shot up 38.56% in September while fuel prices fell 17.71% from a year ago and manufactured goods declined 1.73% year-on-year.

Increase in prices of pulses may register highest growth this year due to untimely rains which have severely affected 2.28 million tonnes (MT) of Rabi crop and widened the gap between demand and supply to the extent of 6 MT, says an Assocham Study.

Facing a huge shortage of 10 million tonnes (MMT), pulses prices may shoot up further by as much as 10-15 per cent in the ensuing festival season, exerting prices on food items.

current affairsAs deficit monsoon rains have affected the yield in several producing states, the country may have to import over 10 million tonnes (MMT) of pulses since the domestic production may be limited to 17 million tonnes against the rising demand of 27 million tonnes.

It said with festivals like Diwali round the corner, the demand for pulses would further shoot up and prices may be looking up , further by at least 10 -15 per cent . As it is, the pulses are selling at Rs 90-145/150 per kg with prices varying in different states, depending on the demand pattern.

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The consumption of pulses and cereals increases because of increased demand for preparation of sweets and other delicacies going with different festivals, from Diwali right up to Christmas.

As per the study, India has a total annual demand of 27.1 million metric ton of pulses out of which it grows 17 million metric ton and imports the remaining 10.1 million ton to meet its domestic demand. With the lack of proper monsoons, there might be less production than usual.

Import of the pulses from other countries could be extremely expensive this year as the grower countries already facing a shortage of supply have increased their selling rates.

The major pulse crops grown in India are Gram and Tur. Gram, with a production of more than 7 million tonnes, contributes more than 41 percent in the total pulse production of the country. Tur, with a production of 2.7 million tonnes and a contribution of about 16 percent, is the second major pulse crop grown in India. Other leading pulse crops in India are Urad and Moong, adds the paper.

India is dependent mainly on Myanmar for Tur, Urad, Moong, Canada and U.S.A. for yellow peas, Australia, Canada and Myanmar for chana (desi chana/chickpeas), Canada, Australia and U.S.A. for lentils. Small quantities of various pulses are imported from other origins (viz. China, Kenya, Tanzania, Mozambique, Malawi, turkey etc.).

The demand for pulses will be driven by middle class population and growth of this section will be the force behind growing pulses demand in India. The growth in organized food retail is likely to influence demand for pulses, as this sector depends largely on middle class boom. Most of the projections for growth in organized retail chain are highly optimistic.

The major pulse-producing states -Maharashtra, Karnataka, Rajasthan, Madhya Pradesh and Uttar Pradesh which together account for about 70% of the country’s total kharif pulse production may witness less rainfall affecting the output and prices.

The pulses are grown across the country with the highest share coming from Maharashtra (24.9), Karnataka (13.5%), Rajasthan (13.2%), Madhya Pradesh (10%), and Uttar Pradesh (8.4), which together share about 70% of the total pulse production, while the remaining 30% is contributed by Gujarat, Chhattisgarh, Bihar, Orissa and Jharkhand.

In India pulses are cultivated on marginal lands under rain fed conditions. Only 15% of the area under pulses has assured irrigation. Because of the high level of fluctuations in pulse production (due to biotic and abiotic stress) and prices (in the absence of an effective government price support mechanism) farmers are not very keen on taking up pulse cultivation despite high wholesale pulse prices in recent years.

Farmers are getting attracted towards cash crops like Bt cotton, maize and oilseeds (mainly soybeans) because of better return and lower risk. Consequently area under these crops has increased over the years to the detriment of pulses.

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Taking note of the situation, finance minister Arun Jaitley said the government had decided to build a buffer stock of pulses through imports to tackle a spike in prices. He said he hoped to see prices of pulses come down soon as a result of measures taken by the government, including speeding up imports, some of which had arrived.

A series of storms in spring and a back-to-back drought have hit the output of pulses.

As against recommended daily requirement of 50-60 grams, current availability of pulses is less than 30 grams per day.

Declining per capita availability of pulses and likely high prices in 2015 is a matter of serious concern on the nutritional security of the nation. It is an accepted fact that intake of cereals along with pulses help in achieving balanced diet.

Domestic price inflation for pulses as a group measured by Wholesale Price Index remained in the negative territory since June 2013, largely due a significant decline in gram prices, the major pulse in India.  Currently, pulses wholesale index is at 256.9.

The increasing mismatch between production and consumption of pulses has resulted in larger imports of pulses in recent years. India’s large dependence on imports, higher prices and declining per capital availability and consumption of pulses have been matter of concern. Therefore, the Government must prepare an implementable action plan to incentivize farmers to cultivate more pulses in the Rabi season by providing seeds and technical support.