By Vishal Dagar & Prerna Kundu
Dagar is a PhD Scholar & Research Fellow at the Agricultural Economics Research Centre, DSE. Kundu is a PG Scholar at DSE
Moong farmers in India have sown 34.36 lakh hectares in the current kharif sowing season, and there is an increase over the previous period by 2.37 lakh hectares. But climatic conditions—lower rainfall during the growth period and heavy rainfall at the maturity period—have negatively affected the quality of moong.
Cash markets (mandis) for moong are expected to trade steady as new arrival continues. Government agencies have started procurement in Karnataka and Maharashtra. As there are reports of crop damage in Uttar Pradesh, Maharashtra and Rajasthan, any major dip is unlikely in the near future. The Jaipur mandi may trade in the range of Rs 4,950 to Rs 5,250, depending on both quality and quantity of the crop. As new procurement is on, the release from the central pool stock would continue. It would limit uptrend.
In this kharif season, the area under moong grew by 7.49%. Major kharif moong sowing states are Rajasthan, Maharashtra, Karnataka, Madhya Pradesh and Gujarat. In Rajasthan, the area under moong this season was 19.23 lakh hectares (up by 22.46%), but it was lower in Maharashtra by 10.72% to 4.03 lakh hectares, as also in Madhya Pradesh (down by 7.795% to 2.1 lakh hectares) and Gujarat (down by 53.5% to 0.61 lakh hectares). It increased in Karnataka (by 16.2% to 4.2 lakh hectares). The broader picture depicts moderate production growth, despite heavy losses in parts of many states. While the production of kharif moong may decline slightly (from 13.68 lakh tonnes to 12.42 lakh tonnes this year), if we add rabi production to it—based on normal conditions—the total moong production is expected to touch 18.04 lakh tonnes this year (last year, India produced 19.25 lakh tonnes—rabi and kharif crop combined).
There is a fear in the market that the grain size of moong will not be like last year’s, and it would negate the impact of higher area coverage. The overall volume for moong seemed bullish till August 15 and September 15 this kharif, despite higher stocks, and agencies outsourced by the government procurement drive would push moong market up.
Last month’s data depicts continuously weaker demand for dal (especially for moong). As the supply is lower from Rajasthan, Madhya Pradesh, Maharashtra and Telangana this year, further downside from current levels is unlikely. In fact, there is poor demand for moong in the prevailing cash markets of major moong-producing states, as buyers are not active enough, and even sellers are not interested to sale at the current price level. Supply- and demand-side seems unbalanced as the expected arrival of moong is lagging behind by 1.32 million tonnes, due to floods in major producing states, and it is keeping prices high, near last year’s MSP. But the area under moong is expected to increase as MSP for kharif has been raised from Rs 5,600 to Rs 7,000 per quintal. The variations in the range-bound movement are expected in cash markets in the coming few months. Also, the procurement at the new MSP of Rs 6,975 announced for the kharif crop is yet to begin. In cash markets, moong is being traded at Rs 5,100 to `5,650 per quintal. Farmers in Karnataka have demanded to procure moong on MSP as soon as possible. And the pressure on demand and supply forces of kharif pulses market continues due to weak demand and selling of masur and moong crops by NAFED (National Agricultural Cooperative Marketing Federation of India).
The price uptrend in masur, moong, tur and urad has come to a point of hitting back downward. Selling at lower levels is said to be poor, while demand seems to be improving in major markets of Rajasthan, Madhya Pradesh, Maharashtra. So, prices are likely to levitate at current levels.
NAFED has started selling moong and masur from last month onwards to balance demand and supply forces. There is a huge pressure of selling other pulses—tur, masur, etc—too, as the storage crunch and the problem of procurement for new arrivals is obvious for kharif pulses. In Madhya Pradesh, the arrival of moong is below expectations in Harda, Pipariya and other markets. Also, as the new MSP of moong is much higher than prevailing prices, farmers won’t sell entire quantity—there is a common view among farmers that they would sell moong at new MSP when the government starts procurement. These developments would not allow the moong market to dip more from the current levels. Going forward, however, the area under kharif moong is likely to increase and the possibility of a bumper crop could be there.