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Across most food group commodities, FY20 has been the year when the dollar settled scores of ‘managed’ stability in years before. While wheat and sugar price spiral made most headlines, it was the mostly imported moong, masoor, and mash daals, where price levels truly sky rocketed.

But was it truly a currency impact? It is hard to tell. During the year ending June 2020, Pakistan imported a lot more pulses than previous years – 24 percent in volume terms over FY19. On the other hand, average import unit price, remained virtually unchanged during the outgoing year, indicating that the price increase in the domestic market is not a reflection of international demand drivers.

And why would it be? Global pulses prices have climbed down by almost a third since their peak in FY17. While various varieties have distinct dynamics, the direction has been similar as supply improves in Turkey, Central Asia, Russia, and Canada. And Pakistan, which is import-dependent for most of its pulses & lentils supply apart from gram (daal chana), should have benefited from the trend.

And benefit it did. Between FY17 and FY19, retail prices of all major pulses declined by almost one-fifth on average, backed by favourable international trends. Yet FY20 has more than wiped off those gains, as domestic retail prices have kissed fresh peaks, especially for moong and masoor. And that owes its story to several interesting occurrences, not witnessed before in recent memory.

Average price of Daal moong during FY20 has jumped by almost 80 percent. This has not only made it the most expensive of the four major pulses varieties but has also eliminated the premium that existed between mash and moong prices that existed historically. Recall that for most of past decade, moong to mash retail price ratio averaged at 0.67 times, which has reversed to 1.12 times in recent months.

That may lead readers to believe that daal moong is facing some unique unidentified dynamics. Even so, it must be remembered that import unit prices of masoor, gram, and mash have also declined by 30 to 50 percent over the past several years; yet domestic retail prices for these commodities also saw a 20 to 40 percent uptick during FY20.

That leads to three conclusions. First, import unit prices, have declined by 34 percent in dollar terms since international pulses price peak during FY17. Currency depreciation of 51 percent during the same period has largely eroded these gains and import price in PKR has remained virtually unchanged. Meanwhile, domestic retail prices have behaved erratically, as price of three major daals mash, masoor, and gram, have moved forward, but not exactly followed into the footsteps of moong.

There seems to be something strange going on with daal moong, especially with international prices under pressure during lockdown for a good part of 2020. It is not the duties, where customs tariffs have been relaxed, and definitely not the dollar.