Moong slips below MSP as new crop hits market

As market arrivals of the new moong (greengram) crop begins in Karnataka, prices of the pulses variety have slipped below the minimum support price (MSP) levels in several markets triggering a demand from distressed growers for market intervention.

Also, in markets across Madhya Pradesh, moong has been ruling below the support price levels at between ₹4,000 and ₹5,000 a quintal for few days now as traders have been liquidating the old stocks ahead of the market arrivals of the new crop that’s set to begin over the next fortnight.

For moong, the Centre has announced an MSP of ₹5,225/quintal, including a bonus of ₹425 for the kharif season this year. In markets such as Kalaburgi (Gulbarga) and Raichur in north-east Karnataka, moong has been ruling below MSP levels, while the modal prices are hovering marginally above the support price levels in Gadag and Rona.

Trade sources attribute the lack of adequate demand and the high moisture content in the harvested crop as the main reason for the low prices, and expect the prices to come under pressure further as arrivals would pick up in the weeks ahead.

“As moong prices have crashed below the MSP levels, the government should immediately intervene and start the procurement operations,” said Basavaraj Ingin, President of Karnataka Tur Growers Association, in Gulbarga.

Since it is early harvest days, buyers are seen adopting a wait-and-watch stance on expectations of a bigger crop this year, trade sources said. Also, the cloudy weather and intermittent rains across North Karnataka are seen hampering the moong harvesting and the drying process.

“Buyers are not interested in the new crop with high moisture content. It would be difficult to store moong with a moisture content of 17 per cent and above,” said Sujay Hubli of Suvijay Agri Venture, a Gadag-based processor and importer of pulses. Bulk of the produce coming into markets in Gadag has high moisture content, he said. Also, the lack of infrastructure such as drying yards is adding to the growers woes in the region.

Like their counter parts in other States, farmers in Karnataka — lured by the high market prices — have planted pulses like moong and tur in more area this year. Acreage in the State under moong, a 60-day crop and the first to be harvested among the pulses complex, stood at 3.74 lakh hectares this year, about 35 per cent higher over last year.

“We are studying the market situation and are advising the government to start procurement operations quickly,” said TN Prakash Kammaradi, Chairman of the Karnataka Agricultural Prices Commission. Also, for those farmers who plan to hold back their produce, the KAPC has suggested that the government extend the pledged loans based on the warehousing receipts, Prakash added.

According to Sanjay Agrawal, a pulses trader in Indore, the declining trend in moong prices has been attributed to large carryover stocks of the last year, high crop output in summer moong. Besides, arrival of imported crop has also added to the bearish trend. With new crop of moong just 15 days away, rally appears unlikely, he said. In markets such as Guna, Khargone, Gadarwada and Sheopur in Madhya Pradesh, the modal prices of moong stood at ₹4,200-4,690 on Friday.

Production of pulses, according to the Centre is expected to rise to around 20 million tonnes this year on the back of sharp increase in acreages as farmers across the country have brought in more area under the legume crops.

According to the Fourth Advanced Estimates, the pulses output during 2015-16 stood at 16.47 million tonnes (mt). India is the largest producer, consumer and importer as pulses are the major source of protein for a majority of the population.

India has been a net importer of pulses and despite expectations of higher domestic production on good rains, the imports are expected to remain high to meet the shortfall in demand. Domestic consumption is estimated at between 23 and 24 mt and is growing annually between 2 and 3 per cent.

“The trade has already contracted about three million tonnes for imports, which will arrive between September and December,” said Pravin Dongre, Chairman of Indian Pulses and Grains Association.

Dongre further said that the global production is set to rise on higher acreages in Australia, Canada and Africa which would result in higher availability. “Already the markets have gone inverted as the forward prices are $100/tonne below the spot prices. This has stated putting pressure on spot markets,” he said.

India imported a record 5.7 mt during 2015-16 and during the current year, the imports are expected to stay high.

The government made pulses imports duty free last December after a surge in prices had fuelled food inflation.