Pulses prices may spiral as deficient rain mars sowing

While a 37% surge in vegetable prices had fired up retail inflation to a 15-month high of 7.4% in July 2023, prices of pulses have also risen sharply in recent months, speeding to 13.3% in July from 10.6% in June.

Tomato prices may be cooling from recent highs, but pulses could play the next spoilsport in the battle against inflation, with a below-par monsoon in August dragging down the sown area for pulses in the Kharif season by almost 10% from a year ago.

While a 37% surge in vegetable prices had fired up retail inflation to a 15-month high of 7.4% in July, prices of pulses have also risen sharply in recent months, speeding to 13.3% in July from 10.6% in June.

Economists reckon prices of pulses like tur dal and moong dal, that surged 34.1% and 9.1% respectively in July, would likely spiral further. This is because the total sown area for dals — 114.9 lakh hectares as on August 18 — is unlikely to improve much amid deficient rainfall towards the end of the sowing season.

Sown area for cereals and rice, that were lagging behind last year’s levels till a few weeks ago, have now inched up to grow 1.6% and 4.3%, respectively, and could help moderate their price rise in coming months. However, pulses sowing has not staged such a recovery and has, in fact, got worse over the past week.

“Acreage of pulses is now 9.2% below last year’s levels, compared to -7.9% in the previous week [August 11], on the back of lower sowing of both urad (-6.4%) and tur (-15.3%). With sowing season about to end, pulses sowing is expected to be largely lower,” said Jahnavi Prabhakar, economist at Bank of Baroda, stressing that the impact of this drop may feed into inflation trends.

“Prices for pulses, especially tur have risen by 18-20% since the beginning of this financial year. This, coupled with sizeable downside in area sown for the Kharif crop, is already fuelling expectations of further price escalation in the coming months,” QuantEco Research economists said in a report.