Inflation in Pulse Prices in India

Source-This post on Inflation in Pulse Prices in India has been created based on the article “Why dal imports have hit a seven-year high” published in “The Indian Express” on 28 May 2024.

UPSC Syllabus-GS Paper 3 – Major Crops – Cropping Patterns in various parts of the country

Context-The article highlights the issues of increased inflation in price of Pulses in India. Pulse prices faced higher inflation of 16.84% in April 2024, nearly twice that of cereals, affecting households more as pulses are not substantially distributed through the public distribution system.

What are the reasons for rising pulse prices in India?

1) The El Niño-induced irregular monsoon and winter rains caused a decline in domestic pulse production from 27.30 million tonnes in 2021-22 to 23.44 million tonnes in 2023-24.

2) Chickpea (chana) and pigeon pea (arhar/tur) saw the highest inflation due to sharp output falls from 13.54 million tonnes to 12.16 million tonnes and 4.22 million tonnes to 3.34 million tonnes, respectively, between 2021-22 and 2023-24.

3) Poor crops in major pulse-growing states like Karnataka, Maharashtra, Andhra Pradesh, and Telangana, owing to deficient rainfall and reduced sowing area, resulted in limited supplies and higher prices.

Read more- Inflation Management in India

What are the implications of price rise of pulses?

1) Surge in Pulse Imports-India’s pulse imports has reached at $3.75 billion in 2023-24, the highest since the record levels of 2015-16 and 2016-17, totaling 4.54 million tones.

2) A Reversal of Self-Sufficiency – Imports are rising again after the country became more self-sufficient in producing pulses from 2015-16 to 2021-22, when domestic production increased from 16.32 million tonnes to 27.30 million tonnes.

3)  Increasing Imports of Cheaper Substitutes– Imports of cheaper substitutes like yellow/white peas from Canada, Australia, and Russia are likely to increase further, as they replace more expensive pulses like chickpeas and pigeon peas in household consumption and restaurant menu.

For ex– imports of red lentils (masoor) from Australia and Canada touched a record 1.7 million tonnes in 2023-24, while yellow/white pea imports surged from near-zero to 1.2 million tonnes

What steps are taken by the government to address the price rise of pulses?

1) The government phased out tariffs and quantitative restrictions on pulse imports to control inflation.

2) The government has lifted annual quotas on pigeon pea, black gram, and green gram in 2021, reduced duties on red lentils, and removed curbs on yellow/white peas and desi chickpeas in 2023 and 2024.

Way forward-The government has already permitted duty-free imports of major pulses like pigeon pea, black gram, red lentils, and desi chickpeas until March 31, 2025, and may need to extend the same for yellow/white peas beyond October 31, 2024.

Future pulse prices will mainly rely on the upcoming southwest monsoon. Climate models suggest a shift from El Niño to a “neutral” phase, and perhaps even La Niña, which brings good rainfall to the subcontinent.

Question for practice

What are the reasons for rising pulse prices in India? What steps can be taken by the government to control the price of pulses?