Prices of chana (gram), which were below the minimum support price (MSP) for all of last season and almost half the ongoing season, have been rising for nearly a month now despite surplus production. This could be an additional headache for the government, which is battling inflation on many fronts, including Kharif pulses.
Prices of chana have shot up from ₹5,300-5,400 to ₹5,925-6,200 a quintal in 20 days in Delhi wholesale markets as demand picks up pace ahead of Ganesh Chaturthi. Chana stocks with National Agricultural Cooperative Marketing Federation of India (NAFED) and state agencies are in reasonably better shape than those of other pulses such as tur (pigeon pea) and urad (black gram). Mint explains why prices of chana are rising despite surplus production.
What is the current price trend?
According to data sourced from private traders, prices of desi chana sourced from leading producers Madhya Pradesh and Rajasthan shot up 12-13% to ₹5,925-6,200 a quintal in Delhi between 1 July and 16 August. Prices of Kabuli chana, a premium variety, shot up 15-30% to 12,600-16,300 per quintal in the same period.
Retail inflation in whole chana rose to nearly 3% in June from 1.2% in January, while retail inflation in tur jumped to 27.5% in June from 10.9% in January – the highest inflation recorded in the pulses basket.
Why are prices of Rabi pulses rising?
According to traders, prices of chana are rising because quality produce is not available in the market ahead of the festive season. The scarcity of chana is attributed to NAFED’s aggressive procurement of 2.35 million tonnes (mt) in the quarter that ended on 30 June. The heatwave in February and inclement weather in March affected crop quality this year as those are the months when chana is harvested.
Although the government, in its third advance estimates, pegged chana production in 2022-23 (July-June) at 13.5 mt, meaning there would be surplus production for the second consecutive year, the industry estimates output at 9-9.2 mt against domestic consumption of 9.5-10 mt.
Additionally, prices have been increasing in tandem with those of tur and urad as the prospects for Kharif pulses seem to be weak amid thanks to rainfall so far in August, and tur and urad acreage dropping 5.4% and 13.5% on-year, respectively.
What will prices be like in the coming months?
Prices may hit ₹6,500 a quintal in a month despite NAFED holding 2.94 mt stocks and government’s intervening in the retail market with the ‘Bharat Dal’ scheme. The impact of this scheme won’t be seen for some time as the government has just begun supplying chana to the retail market at subsidised rates.