December 22, 2023
Harsha Rai, owner of Mayur Global, on the pigeon pea harvest, how the General Election could impact the pulse market and how millers in India are overcoming higher prices and short supply.
The 2023 monsoon season started late this year, under the shadow of El Nino in the Pacific Ocean. August witnessed the driest month in a century, exacerbating the concerns surrounding crop yield, while the monsoon rains revived in September, providing some relief, there were still many regions that recorded deficit rainfall. This has created a patchy distribution of rainfall, impacting the overall productivity of crops. To make matters worse, the recent heavy rains in early December have resulted in crop damage in certain pulses growing areas.
As far as price is concerned, in 2022, the soaring prices of oilseed crops led to a significant increase in the number of acres dedicated to their cultivation. Farmers were lured by the high profits and shifted their focus away from pulses, and the production of pulses witnessed a decline due to the reduced acreage. This scarcity in supply, coupled with the increased demand, caused the prices of pulses to rise significantly.
In 2023, the seeded acres for the Kharif crop are expected to be similar to last year. However, the production is estimated to be lower compared to the previous year, and this projection raises concerns about availability and affordability in the coming months. In addition to this, the Rabi season plays a crucial role in determining the availability of pulse crops in the future.
Because of these multiple factors and the uncertain nature of the monsoon season, predicting the production levels for 2024/25 has become a challenging task. Also, as growers make decisions on which crops to seed, they closely monitor the price remuneration. If pulse prices remain at elevated levels, we can definitely expect pulse acres to go higher next year.
Yes, the US mainly grows green lentils and this mainly works as a substitute for pigeon peas in south India. This year, due to the lower production of pigeon peas, we are witnessing an increased supply of green lentils in Tamil Nadu because of civil supply buying tenders, which is offsetting the demand for pigeon peas splits to some extent.
This shift is reshaping the market dynamics. Previously, Canadian and Russian green lentils dominated the market, but with the recent tariff notification, buyers now have the opportunity to purchase US green lentils at a competitive price. We have seen good business happening for US Richlea lentils recently, and additionally, US lentils are already very well accepted by our markets due to their quality and adherence to set standards.
Red lentils traded below the MSP despite expectations of higher prices. One reason for this could be the lower grower registrations, as they anticipated a repeat of the previous year's high prices. However, the demand for red lentils has remained consistently high due to their affordability.
Red lentils have definitely acted as an economic substitute for pigeon peas in a few market segments. One of the major factors contributing to the low prices, (trading almost 7-8% below MSP), even with the continuous demand, was the consistent availability of imported lentils. However, things started to change in mid-July when the prices of desi chana – the cheapest pulses available – began to rise. This increase provided much-needed support to red lentil prices and demand too, since lentils were the second cheapest pulses in the market. This is why the government's recent buying tender for red lentils is a clear indication of their growing popularity as a substitute.
As per the first advance estimate of production of the major kharif crop 2023-24 posted in October, the estimated production for pigeon peas is 34.21 lakh metric tons 9 (LMT). The production of Tur is estimated at 34.21 LMT, which is similar to last year’s production.
Recently, unseasonal rains flattened standing crops in western and northern parts of Maharashtra, Marathwada, and Vidarbha, which are a few of the pigeon peas growing areas. Gujrat also had unseasonal rain and it will be very crucial to watch the weather for the next 45 days, as harvest pressure from Maharashtra is seen in January and later by other states.
Green lentils are trading at $1275 CFR equivalent in our Chennai local market, while red lentils are trading at $685-$695 CFR equivalent at different ports, and bulk vessel cargo. Lastly, pigeon peas are trading in the price range of $1270-80 CFR equivalent.
The sowing of pigeon peas in Africa is usually in February/March, and harvesting is done at the end of July and the start of August. The seeding plan for pigeon peas in Africa this year is debatable because, as we look at the prices, the farmer will be motivated to seed more but we also need to remember that pigeon peas are a secondary crop there, and this all depends on the weather.
Also, factors such as delays in export from Mozambique due to various reasons and restrictions on the quantity to be exported raised concerns in the market. The MoU between the government and Mozambique was aimed at importing 200,000 tons of tur dal. However, the industry has raised concerns about the delay in the shipment from Mozambique and this has led to speculation about the future of the agreement.
Disclaimer: The opinions or views expressed in this publication are those of the authors or quoted persons. They do not purport to reflect the opinions or views of the Global Pulse Confederation or its members.
