Market Update/
An Early Look at India’s 2021 Rabi Chickpea and Lentil Crops

The second advance estimate released by India’s Ministry of Agriculture and Farmers Welfare pegs the country’s pulse output in 2020/21 at 24.42 million MT, shy of the Ministry’s 25.60 million MT target for the cycle but up from the 23.03 million MT produced in 2019/20. The 2020/21 estimate includes 8.4 million MT of kharif season pulses that were harvested at the end of last year and 16 million MT of rabi season pulses that are currently being harvested.

Chickpeas are the major pulse crop grown during the rabi season, with lentils a distant second. According to the official figures, the 2020/21 rabi season chickpea crop is expected to come in at 11.6 million MT. The lentil crop is estimated at 1.4 million MT.

However, industry sources believe the official production estimates overshoot the mark.

“The government of India has an interest in showing an optimistic number because it helps to keep food prices in check, demonstrates economic growth and signals that marginal farmers are progressing,” explains Sumit Gupta, business manager for McDonald Pelz Global Commodities and the co-founder of the Agronomics Analytics Lab.

The actual size of the crop will become clearer as more and more new crop from this rabi season enters the market. India’s harvest starts in the south of the country and advances northward. Nirav Desai, managing partner at GGN Research, reports that the pulse harvest is mostly wrapped up in Maharashtra, underway in Madhya Pradesh and set to start in mid-March in Rajasthan. Overall, he puts harvest progress at about the midpoint.

At Viterra India, Saurabh Bhartia, the company’s senior trader, says, “Harvest should be completed by mid-April, but a good volume of new crop arrivals will of course continue to flow into the market till June.”

Below, we take a closer look at how the chickpea and lentil crops are coming along this rabi season.

Weather Conditions

India’s top chickpea growing states are Madhya Pradesh, Maharashtra and Rajasthan. The top lentil growing states are Uttar Pradesh and Madhya Pradesh.

This crop year, the monsoon left normal soil moisture conditions across much of the pulse growing area. This allowed growers to seed their chickpea and lentil crops in the regular window (mid-October through mid-November).

Desai reports that soil moisture levels were especially good in Maharashtra, but deficient in Rajasthan, where subpar monsoon rains forced many growers to leave their fields fallow. Following the seeding of the crop, Bhartia indicates rainfall was below average from November to January, and from mid-January through February, temperatures rose as high as 4 to 8 degrees Celsius above the norm.

The high temperatures, Desai says, will likely impact yields in Madhya Pradesh and Rajasthan. Further south in Maharashtra, though, growers got their pulse crops off before the high temperatures set in. Reports from McDonald Pelz Global Commodities indicate mid-February rains and hailstorms disrupted harvest in Madhya Pradesh and possibly damaged standing crops there.

“Weather conditions have not been favorable for pulses this rabi season,” concludes Gupta.

Seeding

Earlier in the year, the Ministry of Agriculture and Farmers Welfare estimated the area seeded to chickpeas and lentils this rabi season at nearly 11.1 million and 1.653 million hectares, respectively. Both are up from the previous rabi season (1 million ha. for chickpeas, 1.61 million ha. for lentils) and well above the five-year average (nearly 9.3 million ha. for chickpeas, 1.424 million ha. for lentils).

But, although there is general agreement that the lentil area estimate sounds about right, some sources consulted by GPC believe the government’s chickpea estimate is on the high side. Bhartia, for one, doubts that the area seeded to chickpeas is at that level given the dry conditions in Rajasthan and better returns on investment for competing crops like rapeseed, mustard and wheat. Desai concurs.

“In Maharashtra, the area seeded to chickpeas increased for sure, but it was reduced in Madhya Pradesh and the feeling in the industry is that it is down in Rajasthan, too, because of the low soil moisture levels,” he says.

Production Expectations

As previously mentioned, the feeling in the industry is that the government’s second advance estimate is overly optimistic.

“I do not believe we will have a bigger crop than last year,” says Gupta about India’s rabi season chickpea production. “I expect it to be 8-10% lower than last year.”

In the best case, according to Bhartia, this rabi season’s crop will be the same as last year. In the worst case, he agrees with Gupta’s assessment.

“It depends on the impact that the limited rains and above normal temperatures will have on yields,” he says. “For lentils, the situation could be worse. Production could end up 10-20% less than the previous rabi season, depending on yields in Uttar Pradesh and Madhya Pradesh.”

Desai reports that chickpea yields were mixed in Maharashtra, with good yields in some cases, poor yields due to high temperatures in others and average yields in yet others. In Madhya Pradesh, he indicates yields are average to slightly below average. In Gujarat, he says there are reports of fantastic yields, but he is skeptical of them. And in Rajasthan, which suffered from a lack of sufficient moisture and high temperatures, prospects are poor.

“I am expecting chickpea production to be the same as last year or slightly lower,” he says. “I’m inclined to think it will be slightly lower, but not significantly enough to be prejudicial to any market here in India.”

The McDonald Pelz Global Commodities report on the lentil crop pegs 2021/22 rabi season production at 1.15 million MT.

Domestic Consumption

In India, it is difficult to get supply data on pulses and near impossible to get demand numbers, says Gupta. Even so, based on estimates for production and imports, he extrapolates India’s chickpea consumption last year at 10 million MT and lentil consumption at 2 million MT.

Desai offers another calculation. He estimates that 80% of chickpea and lentil production is typically consumed internally, 10-12% is set aside for sowing and 5-10% is left as carryover. 

In general, overall pulse consumption in India is trending upward. Gupta pegs the annual growth rate at 1.5-2.6%. Bhartia suggests a higher rate of 2-4% annually. The increase in consumption, explains Gupta, is driven by a number of factors, including India’s population growth of 1.2% annually, increasing income elasticity and a growing trend toward healthy eating.

“In addition to the organic growth, the COVID-19 pandemic surely increased the consumption of tur, lentils and mung, possibly by 10% for the period of the lockdown,” says Bhartia. “Lentils could see an additional increase this year, too, as a substitute for higher priced tur.”

On the other hand, chickpea consumption, relates Bhartia, has seen decreased demand from the HoReCa and snack industries. Demand for urad from this sector was also down to the tune of about 10%. Household chickpea consumption, though, was up as the pulse figured heavily in the government’s public food distribution programs.

“From April to June, there was a complete lockdown in India, one of the strictest in the world,” says Desai. “From April to about September, there was increased household consumption, but now it is back to normal. The HoReCa sector, though, only started opening up again in November.”

Bhartia expects HoReCa sector demand will return to normal levels once India vaccinates 60-70% of its population against COVID-19.

Import Need

When it comes to determining whether India will import “a few million tons of pulses” or significantly more, Gupta offers a basic rule of thumb.

“It all depends on the monsoon,” he says. “In a La Niña or neutral year, we will be in the market for a few million tons. In an El Niño year, the monsoon will be weaker, conditions will be drier, and the rainfed areas where pulses are grown will suffer the most.”

In the past few years, he says, monsoon rains have accompanied the government’s narrative of pulse self-sufficiency, giving domestic pulse production a boost and reducing the need for imports.

However, this year there are also other factors to consider. For instance, Myanmar has traditionally been India’s top foreign supplier of pulses, but the February military takeover of the government there and the ensuing protests have cast uncertainty on the future of trade flows from the neighboring country.

Presently, shipments of modest volumes of chickpeas are arriving from East Africa, says Desai. Tanzania has been the biggest provider. Prices for Tanzania-origin chickpeas fluctuated widely, starting at $500-$525 CNF, then climbing to $700 CNF before settling back down to $550-$560 CNF. Desai notes that the 66% tariff on Australian chickpeas has shut down shipments from there.

“India is now self-sufficient in chickpeas and likely even has a surplus to export,” says Bhartia. “However, due to preferential duty for imports from LDC status countries, India still imports between 200,000 and 300,000 MT a year.”

“I do not see any major need for significant chickpea imports anytime soon,” says Desai. “Some more may be coming in from East Africa later this year, though Tanzania I understand has run out of inventories.”

Bhartia foresees staggered imports continuing from Russia as well as East African origins based on need, with volumes increasing toward the final quarter of the year.

On lentils, Bhartia pegs India’s import need at 800,000 to 1 million MT.

“It will depend on the size of our crop this year,” he says, noting that India imported about 950,000 MT of lentils in the 2020/21 marketing year. He expects the peak period for lentil imports to be from July to January.

At present, red lentil imports are arriving mainly from Canada, Turkey and Australia.