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Not all food inflation is created equal. Or at least that’s the lesson pulses and legumes have offered this year. Although the headline pulses tracker in Wholesale Price Index is up 35 percent year on year, not all pulses have hit fresh peaks, providing some relief to lifeline consumers.

According to PBS, Pakistan’s total import volume of pulses (incl. legumes, beans, grams, lentils & peas etc) fell by as much as 25 percent during 11MFY22. Full year imports are now estimated to clock at roughly 0.92 million metric tons (MMT), lowest since FY18. At $0.6 billion, import bill will be close to long-term average, which only shot up to $0.7billion for the first time in FY21.

Clearly, lower quantity imported amid a shortfall of food grains and cereals back home indicates that higher prices are finally having the desired impact on demand, curtailing imports both by value and volume. Yet, that doesn’t necessarily explain the behavior of prices at retail level.

Last year (FY21), Pakistan imported 1.26MMT of pulses against local production of a little under 0.45MMT. However, as per Economic Survey released last month, domestic pulses etc output rose by 34 percent during FY22, partly explaining the significant decline in import during the ongoing fiscal. But Pakistan only produces sizable output of gram (chana) and moong pulses, with negligible production of dal mash ordal masoor.

Little surprise then that retail prices of (virtually fully imported) dal masoor have risen by as much as 70 percent over the past 12 months, reflective of impact from both currency depreciation and higher international prices. Compare this to dal moong, where higher local production has pulled the prices down by 20 percent versus last year.

Although the relative percentage change may not appear much, consider thathistorically, dal moong (alon with dal mash) is considered one of the premium pulses of the subcontinent. Yet prices of dal moong have crashed back to same levels as dal chana (gram) after more than four years. Meanwhile, dal masoor (crimson lentils) prices have climbed up by 70 percent, closing in on dal mash prices.

This is surprising on two accounts. For at least past 5 years, dal mash prices in retail markets were at least 50 percent higher than dal masoor on average; now, premium has fallen to 1.09 times. Two, just like dal masoor, Pakistan does not have any indigenous production of dal mash either. Yet, its retail prices have climbed by less than currency depreciation over the past year. For reference, Pak rupee has lost 34 percent against US dollar since June 2021, while dal mash prices have only risen by 16 percent in retail market. All this at a time when import quantum has been substantially reigned back.

Of course, this is partly stable dal mash prices in the international market at work. However, mashprices have not witnessed a precipitous decline globally. Nevertheless, now that per kg retail prices of both dal mash and dal masoor are closing in to Rs 300 nationally, it appears that dal masoor demand is a lot more resilient than demand for dal mash, hinting at very different levels of price inelasticity.

Add to this the fact that dal moong prices fell by Rs80 per kg in the last year, and the price behavior of various dals in domestic market raises a question. When did dal masoor become Pakistan’s favourite dal? And what will it take for Pakistanis to reverse preference back to the (relatively) more indigenous dal moong in their diet


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