When Meenakshi from Banashankari went grocery shopping a few days ago, she was shocked to see that the price of toor dal had almost doubled in a little over a fortnight. Other pulses too had become more expensive.
While excess rain has had a role to play, industry insiders attribute the trend largely to the hoarding of pulses by “big players”.
It has created an artificial scarcity in the market, which in turn, has resulted in a rally in prices over the last two weeks.
For instance, toor dal that was trading in the range of ₹70–₹90 a kg two weeks ago, but was being quoted from ₹100–₹140 in the wholesale market on Saturday. The prices of other pulses have also shot up.
This price rise comes in the immediate aftermath of the recent farm reforms Bills, which among other measures deregulated trade in pulses. The Essential Commodities (Amendment) Bill, 2020, recently passed by Parliament and made into law, removed pulses, cereals, and oil seeds from the list of essential commodities.
“Big players have definitely resorted to hoarding over the last few weeks. However, unlike before, now that pulses are no longer an essential commodity, the government cannot check for stocks or intervene. The prices of pulses, cereals, and oil seeds will henceforth be prone to such artificial rallies,” said Ramesh Chandra Lahoti, chairman, APMC Committee, Federation of Karnataka Chamber of Commerce and Industry.
At a recent meeting of stakeholders, including mill owners, farmers and government officers, in Kalaburagi, which is the biggest contributor of red gram in Karnataka, it emerged that an artificial scarcity in the market was the primary reason for the rally in prices.
Rithendra Sugoor, Joint Director of Agriculture, added that a premature assumption that this season’s harvest will be low had “prompted traders to keep the crop with them for better price”.
T.N. Prakash Kammardi, former chairman of the Karnataka Agriculture Price Commission, said that this artificial rise in prices had proved their argument against the recent farm reform Bills. “The government should not give up control over agriculture commodity marketing. The present system, as is being shown, neither helps farmers nor consumers, but only big corporates,” he alleged.
Farmers had sold red gram, from which toor dal is processed, at a low price of ₹6,100 a quintal earlier this year.
What has aggravated the situation is crop loss owing to excess rain in parts of the State in August–September. “Of the 5.5 lakh hectares that had redgram sown in Kalaburagi, crop on over 1 lakh hectares has been completely damaged,” said Mr. Sugoor. However, he hoped the yield in the rest of the area would be good.
Excess rain creates scarcity of onions
Excess rain in parts of the State in August and September led to large-scale crop damage that has now caused a severe scarcity of onions, driving its price northwards.
“The supply of onions has dropped to unprecedented levels. Crop loss was reported from almost all onion growing regions of the State starting from Sira, Molakalmur and Hubballi to Belagavi. What has worsened the situation is a similar crop loss in Maharashtra and Telangana as well,” said Ravi Kumar of Bangalore Onion and Potato Traders’ Association.
Onions are currently being traded at ₹40 a kg in the wholesale market, which has already pushed the retail price to above ₹50 level, sometimes even being sold at ₹60 a kg. However, despite paying a steep price, the quality of onions is poor.
“Waterlogging and increased soil moisture have damaged the crop hugely,” Mr. Ravi Kumar said.
All hopes are pinned on the next harvest from Rajasthan, which is expected to reach the market in November–December. If that fails, it will create a long period of acute scarcity till the next harvest in February, warn traders.
“If the Rajasthan crop is not adequate, we may see onion prices cross the ₹120 level, but then too, the quality may be very bad,” Mr. Kumar said.
