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Economy

Karnataka is Hoarding Pulses! Despite Seizing 25,000 tons of Pulses from Hoarders, It's Disposed of Just 1.5% of the Catch

So pulse prices have been going up and I get sticker shock everytime I go to buy dal. But apparently I should curse the state of Karnataka for hoarding pulses.

After the imposition of stock limits on pulses, any trader having more pulses than the limit will see the excess seized. Karnataka has seized the maximum amount of pulses from traders among states, as per a press release. Karnataka has seized 25,446 tonnes of pulses, where the next highest state in terms of seized pulses is Chattisgarh which is 1/5th lower at 5448 tonnes.

And yet, Karnataka has disposed only a piddly 371 tonnes of, or just 1.5% what they’ve seized!

Chattisgarh has gotten rid of about 30%, Madhya Pradesh about half, and Delhi and Rajasthan about 8-10%.

Pulses Seized and disposed by State Karnataka hoards the most

It’s no wonder we are seeing pulse prices spiralling – if they seize these pulses why don’t they get rid of them in markets fast?

Maharashtra isn’t mentioned above and it’s India’s largest producer of pulses. And across India, over 124,000 tonnes of pulses have been seized. Of that, they have only disposed of 5,400 tonnes?

[blurb-capmind-prem]

It’s important to bring prices down fast, not a slow and steady pace. With major incentives in place, supply will BOOM. Sowing of pulses in the summer crop has already grown 13% and the winter crop looks good too! We will see an oversupply soon – and if this cache of seized pulses is also there, then prices will plummet and farmers will start screaming for justice and all that.

Let’s hope Karnataka – and perhaps Maharashtra too – is able to offload these pulses and bring prices back to the Rs. 40-50 levels. Because they’re going there anyway.

Side Note: We Said Pulse Prices Would Rise, As Early as February This Year!

In an interview with CNBC TV18, I mentioned pulses would be an issue. For two reasons – that sown areas of pulses was lower by 10% last year, and that the Railways had increased the freight cost for pulses. Don’t let anyone tell you this is all about hoarding – we got the signals long back!

Anuj: A word on the increase freight rate in Railway Budget and if there is a going to be any kind of meaningful impact that you have worked out at your end?

A: The big problem is in pulses. Pulses production was down 10 percent in the summer crop last year, so that means there is low production; there is a 10 percent increase in freight cost for pulses, so that automatically creates a potential for inflation in pulses and this is potentially bad because this is going to affect inflation at least visible inflation from the point of view of the common man in a way.

What’s going to go up next year? Apparently, from statistics, cotton has seen lower planting and we’re slightly lower on rice. But we have massive stockpiles of these two commodities so prices may not rise so much. However, I do expect that rice prices will rise next year worldwide.

 

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