Consumption of Idli, dosa, vada, the favourite South Indian combination, rice and sambar or the Chappathi-dal combine of the North could come under severe pressure thanks to rising input costs represented by inflation in pulses prices.
India consumes about 18 lakh tonnes of pulses annually but average production is below 15 lakh tonnes.
As disposable income rises on economic growth India's consumption of pulses is not soaring but falling rapidly. From a peak of 27.3 kg/year attained in 1958-59, the present consumption is only 12.7 kg per year. If the present trend of alarming pulses prices and lower acreage continues, pulses consumption percapita will decline to 11 and further to 9 kg, warns Assocham Eco Pulse in their Pulses Report.
The average household is curtailing consumption as supply shortages lead to higher prices. It may be remembered that in 1960's, the percapita consumption of 27 kg was considered inadequate considering the nutritional needs of the population.
ASSOCHAM puts the blame on the government policy of ignoring pulses production in the National Food Security Mission (NFSM)that gave prominence to rice and wheat.
NFSM primarily focused on greater wheat, rice, millet and corn production after Green Revolution 1967 to increasing their yield at the cost of pulses. Pulses increased acreage per hectare was totally ignored by the Mission. As a result, its production fell and now due to rising pulses prices, pulses have reached beyond access of common man as their prices have more than doubled in the last one year.
"As regards, Urad given the acreage estimates (as on July month end area stood at 16.39 lakh hectares against 15.66 lakh hectares in last year) and monsoon progress, the output may not see major shift from normal output. The higher acreage is likely to discounted by weak monsoon. We expect the urad output is likely to be around 7-7.5 lakh tonnes in kharif 2009. If monsoon continue to remain weak, the output can fall further in this year," according to Chowda Reddy, Senior Analysts with Karvy Comtrade.
He further said that Urad prices are likely to remain firm at least till new crop arrives in market in September-October. The current spot prices are around Rs4000-4200 per quintal and likely to trade in the range of Rs 3800-4500 till next crop. The higher acreage and Government intervetion may restrict major rise in prices, but at the same time lower stocks and festive demand may provide support. However, progress of monsoon is crucial for further trend in prices.
Releasing the Pulses Report, the ASSOCHAM Secretary General, D S Rawat said that it was evident from the fact that overall growth in yield of pulses since inception of Green Revolution in 1967 is least among major crops cultivated in the country at mere 1.14%. On the other hand, wheat, rice, oilseed and maize have respectively witnessed 2.8%, 2.23%, 1.88% and 1.7% CAGR growth.
The ASSOCHAM report reveals that in the absence of growth of area and very sluggish growth in yield, pulses production in India witnessed a very slow growth rate of 0.9% (CAGR) in the last 5 decades. As a matter of fact, it never breached the level of 14.91 million achieved in 1998-99 until 2007-08 when it clocked a fresh record high of 15.1 MMT.
Still, the country is well short of requirement and thus it needs to resort to heavy imports. The country's increasing demand for pulses due to rise in population has resulted in increase in net imports from about 4.6 lakh tonne in 1998-99 to over 20 lakh tonne in 2008-09.
The report points out that since pulses demand remains price sensitive, per capita consumption has gradually declined over the years. While total pulses availability in the country has reflected a growth of mere 1.39% (CAGR) during the last two decades, population has increased at a CAGR of more than 1.8%.
Urad dal is an important ingredient in India's idli-vada recipe. "As per the 4th advance estimate released by the government recently, Urad production estimate is revised to 11.1 lakh tonne, lower from 2007-08 final estimates of 14.6 lakh tonnes. Share of Urad in the Total Pulses production is around 9-10%. The normal production range is around 14-15 lakh tonnes and the consumption is around 14.5-15.5 lakh tonnes. Thus, India needs to imports around 50,000-75,000 tonnes of Urad every year. 90% of our imports come from Myanmar, which is the second largest producer of Urad and the largest exporter," Nalini Rao, an analyst with Angel Commodities said.
Referring to as to why India has to rely on imports of pulses, it points out that its pulses imports grew at CAGR 10.38% from 172.96 thousand tonnes in 1980-81 to 2255.649 thousand tonnes in 2006-07. The import of pulses increased steadily due to low import tariff rates (currently attracting zero duty). In order to battle against rising domestic prices and for fulfilling domestic needs government allowed duty free imports from June 8, 2006.
Consequently, imports touched 2.26 million tonnes in 2006-07, the maximum since 1980-81. India occupied top slot in chick peas and dry beans imports in 2005. India imports sizeable quantities of pulses including chick peas, dry beans, lentils and dry peas, besides tur, urad and moong. Ironically, countries like Canada, Australia are factoring Indian demand in their production plans and are highly successful in exploiting Indian situation to their advantage
Interestingly, India's export of pulses grew at a far greater pace than imports, from 1.09 thousand tonnes in 1980-81 to 447.44 thousand tonnes in 2005-06. Looking at rising consumption of pulses in India against domestic output and resultant high prices, the government banned export of pulses.
On trade scene on major pulses in India, the paper says, "India imports significant quantity of pulses from Canada, Myanmar, Australia, and the USA each contributing about 40%, 27%, 9% and 6% respectively to total imports of India. The other countries including Ukraine, France, China and Tanzania are also offering varying quantity of pulses to India. The country's imports from Canada, Australia and the USA have increased during the last five years though Imports from Myanmar has shown slight decrease recently.
Source - 2009-08-10 / Commodity Online
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