Urad prices last week mostly traded weak on the back of poor off-take and comfortable supply due to regular inflow of imported stuff.
Some improvement is witnessed in Urad prices during mid-week on tender of Tamil Nadu Civil Supply Department but failed to sustain thereafter on supply pressure and turning bearish sentiments of the market on the back of higher acreage report.
India’s Southwest Monsoon showed some signs of abating and the rains during the week ended July 20 was 7 per cent less than normal, but there was no break in sowing as farmers rushed to take advantage of the available soil moisture.
The showers are expected to return over Central and Northern parts of India in the next few days, boosting Kharif sowing which has already touched 70 million hectares, 3.28 per cent more than the same period last year.
The water levels at the country’s large reservoirs continued to rise for a second week to 34% of their combined capacity versus 18% a fortnight earlier. The heartening part of the Kharif sowing data is that Pulses.
The highest gains have been recorded in Pulses, where the sowing area has increased 39 per cent to 9.01 million hectare so far in the 2016-17 Kharif season with Indian state of Karnataka on top.
Normally, an area of 10.8 million hectares is sown with Pulses every year, and this year’s planting can set a record if the rains are ample and well spread out.
Higher sowing of Kharif Pulses like Arhar (pigeon pea) and Urad (black gram) can also help tame prices which shot up over the past year due to deficit rains impacting production in 2014 and 2015.
Farmers in Indian states of Punjab, Haryana, Rajasthan and Gujarat are planting Pulses this Kharif season, largely Urad because of better prices and concerns of Cotton crop failure in North West India, while in Gujarat it was delay in Monsoon rains.
Urad sowing as on July 22, 2016 has been reported higher by 30.77% to 2.18 million hectares from 1.66 million hectares sown last year same time.
Currently, prices are ruling above the Minimum Support Price (MSP). In the Mumbai wholesale market, Arhar was being quoted at Rs 83-84 a kg, Urad at Rs 97-105 a kg and Moong at Rs 53-58 a kg.
Pulses acreage may further increase and be 50% more than the previous year. Large tracts of land under Cotton and Soybean is coming under Pulses- largely under Urad whose prices are above the MSP.
Farmers in Indian states of Madhya Pradesh and Maharashtra, who were going for replanting after the recent floods, are opting for Urad.
In view of better progress of sowing of Kharif crops, if rainfall conditions during the remaining period of the current monsoon season continues to be favorable according to IMD’s forecast, this year’s production scenarios of Kharif crops should be better than the last year.
Nevertheless, the festive seasons are about to start and prices have already declined too much, thus, demand at these level cannot be ruled out which would remain supportive for prices in short term.