While retail pulses such as arhar, urad and chana have softened since the beginning of the year because of record output in the 2016-17 crop year (July-June), the prices of chana or gram, a mass consumption rabi crop which has a large share in overall pulses output, are set to rise in the next few months. According to assessment done by agri-cooperative Nafed, the agency for pulses procurement and creation of buffer stock, the current mandi prices of chana, which accounts for more than 40% of the country’s total pulses production, are ruling far above the Minimum Support Price (MSP) of Rs4,000 per quintal and farmers are holding stocks in anticipation of further price rise. The agriculture ministry in its third advance estimate of major crops released last month had stated that output of chana was 9.08 million tonne (MT) in 2016-17 crop year (July-June). “There is negligible carry over stock with trade and import of gram is till not sizeable. These circumstances are indicative of price rise in coming month,” Nafed stated in its crop assessment report.
Last year the opening stocks of gram was around 8.5 lakh tonne while this year the open stock is around 1.6 lakh tonne. Trade sources told FE that although farmers have been bringing in their produce but the arrivals have been rather slow. The Nafed report also stated that in 2013-14 crop year the gram output was reported at a record 9.5 MT, the mandi prices had fallen below the then MSP of Rs3,100 per quintal. “Since the prevailing prices of gram are much above MSP, there is strong possibility that the actual production is lower than the estimated,” the assessment had stated. Trades sources said that chana prices are set to rise from next month onwards. The Nafed, which has so far purchased around 47,000 tonne under the government’s Price Support Scheme (PSF) from farmers in Rajasthan, Madhya Pradesh, Uttar Pradesh and Haryana, has urged the government to create sufficient volume of buffer stocks so that it could be disposed during lean season when prices are set to rise. “In case state government and other agencies do not show interest in taking supply of gram from buffer stocks then such stock may be disposed off profitably in open market,” says a Nafed note.
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Out of the total pulses buffer stocks of around 1.8 MT created mostly through procurement and imports by agencies such as Nafed, SFAC and Food Corporation of India, Nafed has purchased 1.3 MT of pulses like tur or arhar, urad and moong from farmers. According to third advance estimate, the pulse production during 2016-17 crop year is expected to increase by more than 37% to 22.4 MT compared to previous year’s output of 16.35 MT.