Market Update/
India's Kharif Pigeon Pea Crop

Domestic production of pigeon peas for the 2021 Kharif season is estimated at 3.0-3.2 million MT, which is slightly down from last year due to adverse weather conditions and some crop damage from pest infestations. There are resulting concerns about the quality of the new crop. 

Government procurement will be done in Maharashtra and Karnataka. The new pigeon pea crop has already started to arrive in the mandis of these provinces and is expected to pick up in the coming months although worries about quality are sparking concerns about a shortage of good quality seeds. 

A comprehensive survey conducted by IGrain India has revealed that, due to lower-than-average levels of sunlight in Khamgaon, the crop’s development was stunted and, as a result, production will be normal but the quality will be low. A steady supply of new goods will enter into the mandis in the next 15-20 days although no strong selling pressure is expected.

In Deglur, around 30-35% of the crop has been damaged. The new crop is expected to start arriving in the mandis after mid-January. The condition of the crop in Nanded is also said to be weak.

In Karnataka, heavy damage to crops was reported due to winds, rain, flooding in the fields and an outbreak of insects and diseases. In Gulbarga, there is the possibility of a 30-35% crop damage, which will reduce the arrival of new product in the mandis. At present, the moisture content is in the range of 15 to 25% according to currently limited samples from the new crop. Good quality seeds are expected to be available as of next month.

The quality of crops in Raichur is mild or medium, with coarse pigeon peas showing a moisture content of 17-18%. In the coming days, crops with a moisture content of 12-13% will start arriving in the mandis.

Production of pigeon peas in Talikoti is expected to decline by between 30% and 40%, with new crops arriving in the mandis from January. In Bidar, the crop is in a poorer condition than average due to damage from heavy rains. As a result of the low quality, seed recovery is less likely to reduce and the percentage of waste could increase. 

The wholesale market price in Maharashtra and Karnataka is below the government minimum support prices - Rs 6,300 per quintal -, which may mean Nafed is forced to enter the market to support farmers. During procurement, prices may be supported for a limited time but getting good quality seeds will be challenging. Farmers may face issues meeting procurement norms.

In Maharashtra, the registration of farmers has started, with a target of 2.71 lakh tons. The Maha Farmer Producer Companies (FPCs) have been given a procurement target of 75,000 tons of pigeon peas and government procurement will also start soon in Karnataka. However, government procured materials will be sold in the markets which may pose a challenge to the industry. Chana is currently being sold at very low prices, which has caused the market to be in a state of collapse for more than 9 months.

Old government stocks of pigeon peas are reduced and stockists have good volumes; between April and November 2021, a quantity of 4.12 lakh tons were imported, compared to 4.42 in the last financial year and 4.5 lakh tons in 2019-20. Due to heavy imports from African nations, availability was more than required throughout the period.

Overall, this season will be challenging for pulse traders, farmers and millers. The prevailing trend currently is that of prices increasing at the time of arrival in the mandis, thus reducing margins and creating a huge disparity as prices reduce once arrivals begin to decrease.

Yesterday (December 20), the Indian government extended the import deadline of tuar, urad and mung, due to which there will likely be pressure on the prices of tuar and urad. Up until yesterday, control-free import of these pulses was allowed until December 31, 2021 but the deadline has been extended to March 31, 2022 with import consignments at Indian ports to be accepted up to June 30, 2022. Large volumes of both tuar and urad have already been imported and there are good stocks available with both importers and stockists. Now, heavy imports of cheap goods from abroad will also continue. 

With the market showing a downward trend, it is possible that the reason for the extension of free imports is that the government is predicting a sharp decline in production of both tuar and urad since domestic prices have not reached especially high levels.