In the lead-up to the Diwali festival, India is poised to grapple with ongoing constraints in pulses supply, according to experts at a recent webinar organized by the Indian Pulses and Grains Association (IPGA). The situation has been exacerbated by multiple factors, including a lower-than-expected production of kharif moong, damage to urad crop quality due to September rainfall, and an anticipated shortage of 1 million tonnes of tur until new crops arrive in December/January.
Despite measures taken by the government to cap pulse prices, such as the recent reduction in stock holding limits for wholesale traders, the supply remains tight. Wholesale prices have witnessed a 2% to 4% decline following the 75% reduction in stock holding limits, but this move has also posed challenges for organized retailers like Reliance Retail in managing their inventories.
Dilip Mohanty, Senior VP of Reliance Retail, expressed their concerns, stating that their daily pulse requirement far exceeds the new stock limit of 50 tonnes. Organized retail chains with a substantial presence across the country are finding it difficult to operate within these restrictions and plan to approach the government with their concerns.
Transporting pulses from production centers concentrated in a few states to other parts of the country has become a daunting task for millers and processors. Nitin Kalantry, a pulses processor from Maharashtra, highlighted the logistics challenges, including the need to purchase different qualities of the same dal, often exceeding the truck capacity of 25-30 tonnes, which aligns with the new stock limit for wholesalers of 50 tonnes.
Trade and industry leaders have observed a further decline in pulse prices due to the new stock limits. Ex-mill prices of tur dal have decreased by 2% to 4% at various centers since the announcement. Rupesh Rathi, a pulses processor from Maharashtra, noted that there is a lack of buyers, and many processors are operating at less than 50% of their capacity.
As the festival season approaches, the Indian government and industry stakeholders continue to grapple with striking the right balance between ensuring fair prices for consumers and maintaining a stable supply of essential pulses. The situation is expected to persist until the first week of Diwali, further underscoring the need for effective measures to address the pulse supply challenge.