By Sean Pratt
Lentil prices are falling in India as domestically grown product hits the market, says an analyst.
The price of average quality lentils in markets in Madhya Pradesh, the largest lentil growing state, is around 5,450 rupees per 100 kilograms.
That is below the government’s minimum support price (MSP) of 6,000 rupees.
“Heavy arrivals” of the crop are forcing prices lower, according to Rahul Chauhan, analyst with IGrain India.
He estimates 12,000 to 15,000 100-kilogram bags of lentils are arriving at the Sagar district market every day.
Chauhan estimates Indian farmers will harvest 1.4 million tonnes of lentils this year, a 10 to 15 percent increase over last year.
“The quality of lentils has been affected by rains in some parts, but overall condition can be considered normal to satisfactory,” he said in an email.
The government is expected to buy 100,000 tonnes of the crop, up from a negligible amount last year when prices were above the MSP.
He expects prices will settle around 5,800 rupees per 100 kilograms in Delhi and then gradually rise to about 6,4000 to 6,500 rupees by the time local supplies dwindle.
Chauhan thinks India’s 2023-24 imports will fall to 650,000 tonnes from the estimated 770,000 tonnes purchased in 2022-23. Purchases already started tailing off during the last few months of the 2022-23 campaign.
His import estimate is at odds with a recent forecast provided by Vivek Agrawal, director of JLV Agro.
He believes imports will rise by 100,000 to 200,000 tonnes due to sky-high pigeon pea prices.
Green lentils can be used as a substitute for pigeon peas.
“I feel the consumption of lentils will increase as the consumption shifts from pigeon peas to lentils,” he told The Western Producer in March.
Agrawal believes the country could import as much as one million tonnes of the crop.
Agrawal said another reason for his bullish lentil import forecast is the increasing likelihood of an El Nino weather event developing this summer.
That could result in hot and dry conditions for India during the upcoming kharif-growing season when its pigeon peas are cultivated.
He thinks the government will want to augment its buffer stocks of imported lentils in case there is another pigeon pea shortfall.
Earlier this year, India extended its import duty exemption on lentils through the end of March 2024.
Agrawal said Canada is going to face stiff competition from Australian red lentils. Growers in that country harvested a record 1.4 million tonnes of the crop, up 40 percent over last year’s record crop.
Chauhan agrees with that assessment. Australian lentils are selling for US$555 to $590 per tonne in India.
He believes the price could drop even further due to Australia’s bumper crop.
Source: The Western Producer