Lentil prices cool on rising arrivals, imports

Written by Reuters | Mumbai | Updated: Jan 27 2010, 03:32am hrs
Prices of pulses, or lentils, which had risen to near-record levels, leading to spiralling food inflation and political concerns are now correcting on rising arrivals and imports.

Pigeon peas, chickpea, black matpe and green gram are staple food for most Indians and spiralling prices of these commodities had led to disruption of parliament proceedings by opposition parties as well as media criticism of the governments food policies.

Prices had risen too much and were bound to come down on arrival pressure, KC Bhartiya, president, Pulses Importers Association of India, said.

The food price index rose 16.81% in the 12 months to January 9. Industry estimates put the countrys annual pulses demand at 19 million tonne, while production hovers near 15 million tonne.

Arrivals of pulses have risen significantly this month and helped reverse the trend, say traders. Weak demand from stockists because of stock limits in key states are also weighing on prices, they add.

In major spot markets spot price of pigeon peas or tur has corrected by 23% to Rs 4,460 per 100 kg in last one month while black matpe or urad by 10% to Rs 4,310.

Tur and urad prices will fall by another Rs 200-400 (per 100 kg) before stabilising, says Prem Kogta, a dal miller and importer based in Jalgaon in western Maharashtra state.

The other negative for prices is the entry of imported pulses, he added.

India, the worlds biggest producer, importer and consumer of pulses, has allowed duty free imports of pulses to bridge the widening gap between domestic demand-supply.

This year production of tur and urad was good in Myanmar. It has reduced export prices significantly in last two weeks, Kogta said.

The trend may continue as the winter crop production is looking better than the summer crop, which was hit by the weakest monsoon rains in nearly four decades.