Crisil Ratings has expressed concerns about inflation in pulses due to changing weather patterns, highlighting the potential impact on prices. They predict that if pulse inflation follows the cobweb phenomenon, the next peak could occur in 6 to 7 months, albeit with less intensity.
Last year, irregular weather conditions resulted in production damage, further influencing prices. Policymakers are advised to closely monitor monsoon patterns and their implications on prices, taking the necessary measures to alleviate price pressure.
The delayed and erratic rainfall this year has already affected pulse sowing, creating additional price pressures. However, government interventions, such as price stabilization schemes and the removal of the 40% procurement ceiling for key pulses, aim to support farmers and increase the sown area in future cropping seasons.
These measures facilitate better price signaling through the announcement of minimum support prices (MSP) and discourage traders from stockpiling supplies by imposing stock limits on certain pulses like Arhar and Masur. These timely policy actions aim to address the incorrect price signaling that contributed to the cyclical pattern of pulses’ price fluctuations.