Scanty rainfall and erratic distribution system to lead price rise in pulses: ASSOCHAM

 | August 21,2012 01:04 pm IST

Poor rainfall together with rise in middle class population and weak distribution system, the prices of pulses may register a huge increase nearer Diwali festivals according to the ASSOCHAM study.


The most impacted will be the Gram (Desi Chana) which registered 90% price increase between June 2011 and May 2012.

It is expected that by Diwali 2012 Chana prices will touch unprecedented levels as already overseas suppliers of desi chana have hiked their prices.


The study on Emerging Pulses Scenario in 2015 was released by National Secretary General, Mr. D S Rawat at the ASSOCHAM press conference here at Bhopal.

Mr. Rawat further said that It has been noticed that while farmers benefit marginally 10 to 15% on account of rising prices of pulses, middlemen are the biggest beneficiaries to the extent of 85%.


Import of pulses in the current year is likely to 3.5 million tones and 3 million tones in the next two years due to the weakening rupee resulting in higher cost of imported pulses which threatens viability of large imports at prohibitively high prices, adds the paper.


India is dependent largely 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.).


All the pulses exporting countries have limitations and indicatively Indias import basket is expected to be Tur, Urad and Moong one million metric tone (MMT) from Myanmar, Yellow Peas 1.80 MMT from Canada, Ukraine and U.S.A., Desi Chana at 0.25 MMT from Australia, Canada and Myanmar and other pulses 0.45 MMT from mixed/available origin.


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. Secondly 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. After studying the pulses availability and consumption pattern in the country, we expect moderate increase in demand, added Mr. Rawat.


Keeping in view the middle class and upper middle class population, the weaker section of the population, income/GDP growth, etc., ASSOCHAM has worked out the demand for pulses in the coming three years as: 2012-13 1.220 billion (population), 21.00 MMT (demand of pulses), 2013-14 1.239 billion (population), 21.42 MMT (demand of pulses), 2014-15 1.259 billion (population), 21.91 MMT (demand of pulses). Judging by the present trend and global economic uncertainties, GDP growth in India is likely to be around 7% in the coming three years.


Consumption of pulses is expected to increase mainly on account of the growing middle class population. The growth in middle class/upper middle class population is expected to be equivalent to the increase in population of the country. In other words it will work out to approximately 1.6% increase in population (or 19 million people) corresponding to 5% growth in middle class.


It should be noted that there is an apparent/marginal surplus in availability which is due to demand compression and floating stocks. As the prices soften, demand will catch up and the surplus will be offset.


The existing MSP (minimum support price) for pulses is not backed by assured procurement as in the case of rice and wheat. Appropriate government agency should be entrusted with the responsibility of monitoring prices and undertake timely intervention, if prices fall due to pressure of arrivals. If this issue is not tackled properly and farmers are left to the mercy of middlemen, especially at the time when production is picking up and arrivals are heavy immediately after harvest, farmers are likely to shift to competing crops (in succeeding years), adds the Secretary General.


Low cost pulses processing machinery are now available and farmers should be encouraged to undertake value addition at farm, level. This will ensure lower cost of processed pulses.


As middlemen polish off unduly large margins, price of pulses are pushed up and consumers are eventually burdened with these costs. By offering a window of opportunity to farmers for selling to corporate and retails chains without involvement of middlemen, both farmers and end consumers can be benefitted. For this purpose farmers need to be well informed and should have access to market intelligence. Unless serious efforts are made to bring down the prices of pulses, consumption is unlikely to grow, notwithstanding the nutritional needs in pulses. Hence there is a need to promote pulses consumption along with growth in pulses production. The following key action points will help in achieving consumption growth in India:


?Create awareness among the people about the importance of intake of pulses for all ages for healthy living, as pulses are the storehouse of proteins and minerals which are so vital for the human body.
?Government has the responsibility to make pulses affordable to the majority including economically weaker section of the society.
?Contain overall food inflation so that other essential items of food (like milk, eggs, staples, F&V, vegoils, etc.) do not burden the poor in their meager purchasing power and them with very little or no surplus for pulses.
?Existing Public Distribution System in all states should be refined to distribute pulses to economically weaker section the society at affordable prices.