An Update On India Supply/Demand

Key points:

• The Indian government’s second advanced estimates, published in March, estimated overall pulse production to be around 17.6 million (M) tonnes, compared to 17.1 M tonnes last year.

• According to government estimates, India is likely to import 2.75–2.8 M tonnes of pulses in 2012/13, slightly higher than last year’s 2.6 M tonnes.

• An export ban remains in place for pulses, with the exception of kabuli chickpeas, organic pulses, and lentils up to a maximum of 10,000 tonnes per year.

• Local prices remain on the higher side of the benchmark with lentils being sold at more than $2000/tonne.

• The finance ministry may extend the duty-free import of pulses to March 2014 to stabilize prices and boost supply. (The current dutyfree import of pulses was set to end March 31, 2013.)

• Domestic markets are seeing a bit of bearishness in prices across pulses. However, given the overall supply/demand dynamics, this might only be a short-term phenomenon.

• Chickpea has found good ground, given the higher prices and good weather conditions, and has increased by more than 10% in some growing regions. However, more chickpea imports are expected despite this, given the lower carryover stocks.

• Yellow pea imports are expected to be in the 1.5–1.7 M tonne range for 2012/13.

Overall pulse outlook 2012/13

• With a steady-to-normal crop output, imports will be a key component in balancing the overall supply/demand situation in the country.

• Lower yields remain a big challenge for India. However, over the years the gap between demand and supply is narrowing.

• Exports continue in smaller volumes, largely in chickpea. The export market potential has provided farmers incentive to plant more chickpea, with the result being more chickpea acreage in the current season.

• Compared with final estimates from 2011/12, summer season (karif) output for this year is estimated to be 23% lower than last year, at 5.5 M tonnes, and winter season (rabi) pulse output is estimated to be 9% higher than last year, at 12.1 M tonnes.

Source : saskpulse