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Lentil prices in India started rise suddenly indicating lower output

The reliable sources from the trade reported the analysts having noted that the lentil prices have started to rise suddenly, indicating two factors. One, the domestic production is much lower than government estimates two, farmers are holding back stocks. On the other hand, major producers anticipate further price rise in the coming months. During the month or two past, the government essentially banned the sale of pulses. This came adding to the market fluctuations.
As far the production estimates, the Union Agriculture Ministry estimated red lentil production at approximately 1.650 million tonne for the Rabi season of 2023-24. However, the industry and trade sectors believe actual production is closer to 1.1-1.2 million tonne. This discrepancy is significant, enough to impact the market prices and supply stability. Despite the harvesting of the lentil crop has concluded, the price of lentils has remained stable over the past few months, unlike other pulses. This stability, as the analysts believe, is attributed to substantial imports from Canada, Australia, and other countries, alongside the arrival of the new domestic crop.
According to the reports available on various trade platforms, in March 2024, India imported approximately 68,000 tonne of lentils, the lowest monthly import figure since May 2023. Typically, lentil imports decreased during the domestic crop harvests and the arrival of new crops in March-April. In March, about 39,000 tonne of lentils were imported from Australia and 18,000 tonne from Canada, with the remainder coming from countries including Russia. Despite a reduction in imports for March, the total lentil imports, for the financial year 2023-24, reached a record high of 1.670 million tonne. This is 0.41 million tonne higher than the previous record of 1.26 million tonne in 2015-16. The import trend still continues the financial year 2024-25, with the government expected to purchase about 0.125-0.15 million tonne of lentils from farmers. Currently, the total government agency stock is close to 0.6 million tonne.
Notably, the southwest monsoon reached Kerala, well in time, on May 30, 2024. The Indian Meteorological Department (IMD) and private weather agencies have predicted 106 percent rainfall as compared to the long-term average (LPA), during June- September 2024. While, June may experience relatively less rainfall, heavy rains are expected in the following months. These estimates have perhaps made the government estimates a bit liberal.
The disparity between government and industry estimates of lentil production, and the recent weather patterns and import trends, have created a volatile market environment. As domestic production falls short of expectations, reliance on imports may likely continue, affecting global trade supplies and pricing structures, noted the analysts.