Prices of India's pigeon peas may rise on low output

India's pigeon peas, a yellow lentil used to make the popular dal dish, could rise 10 percent in the next two months as output falls on lower yields and less acreage sown, traders and farmers said, potentially boosting imports and adding to high inflation.
Pigeon peas are the most sought-after lentil barring chickpeas in India, the world's biggest producer, consumer and importer of pulses. "Yield per hectare has gone down in many regions because of delayed rains. The total area under cultivation is also lower. All these trends are indicating lower output," said Amit Jain, a trader from Nagpur in the biggest producing state, Maharashtra.
Farmers have sown pigeon peas on 3.87 million hectares this season compared with 4.55 million hectares last year, government data shows. However, the government estimates pigeon peas production, which accounts for over half of the total summer sown pulses output, at 2.90 million tonnes for 2011/12 against 2.89 million tonnes last year but well below its 3.08 million tonnes target.
"Prices will definitely go up as the new crop is not looking good, and imports are getting costlier because of the strong dollar," said Rajesh Agarwalla, a Delhi-based pulses trader. Pigeon peas sowing starts with the arrival of monsoon rains in the second half of June and lasts until the end of July, with harvesting starting in December.
India consumes around 18-19 million tonnes of lentils annually, whereas production has been stagnant at 14-15 million tonnes per annum for years. To fill the gap, India imports - mainly from Australia, Canada and Myanmar. Pulses have around 0.72 percent weight in the wholesale price index, which is currently up just over 9 percent.
In the year ending March 31, 2011, pulses imports dropped 26.1 percent to 2.77 million tonnes due to a record output in 2010/11. Out of the total annual pulses imports, around 300,000-400,000 tonnes is pigeon peas. Imports are particularly costly now as the Indian rupee hits record lows against the dollar.
Pigeon peas harvested in the new season have started arriving in the spot markets of Karnataka, Andhra Pradesh and Maharashtra state and the pace should pick up by mid-January. At Gulbarga, a key trading market in Karnataka, daily pigeon peas arrivals from the new crop stood at 3,000-5,000 bags of 100 kg each. Traders expect supplies to increase to 20,000-25,000 bags in January there.
"Fresh arrivals have started in our market with 3,000-5,000 bags. The quality of the produce is good and the supply pressure is expected to increase gradually," said Ramchandra Solanki, a trader from Gulbarga, where new tur - the local name for pigeon peas - was trading around 3,800-4,050 rupees per 100 kg. Prices have risen by 100-200 rupees per 100 kg in the last 10 days.