Rising Demand for Lentils
Lentil market in India is witnessing an upward surge in prices, prompting the government to initiate imports to meet the growing demand. This increasing trend in imports is expected to persist due to the escalating demand for lentils, driven by the rapid rise in consumption within the country. This surge in demand is largely fueled by the soaring prices of other pulses.
Factors Affecting Lentil Imports
There are concerns about a potential decrease in the yield of major pulses like tur (pigeon pea) and moong (green gram beans), a phenomenon that is already taking shape. This surge in pulse prices is occurring amidst fears of declining production and diminishing supply. Tur dal and moong have experienced the highest growth rates, and now masoor dal (red lentil) has joined this list.
Given the low pulse production, a significant increase in imports is anticipated this year, particularly in the case of lentils. Estimates suggest that this year could witness an import increase of 1 million tonnes compared to the previous year’s 0.85 million tonnes.
Lentil Exports, Production Estimates, and Price Trends
Since April, lentil exports have already exceeded 0.5 million tonnes, with an additional 0.15 to 0.2 million tonnes currently in transit. The government has also released its pulse production forecast, indicating that while lentil production may rise, production of other pulses is expected to decline. This anticipated shift is likely to further boost lentil consumption and, in turn, imports.
In the 2020-21 fiscal year, India imported 1.11 million tonnes of lentils, a figure that dropped to 0.66 million tonnes in 2021-22. However, this year has seen a substantial surge in lentil imports. In terms of pricing, lentils in the market are hovering around the minimum support price of approximately $0.83 to $0.85 per kg, with slight increases in retail prices.
Global Sources, Price Factors, and Production Estimates
Canada and Australia remain India’s primary sources for lentil imports. India has recently eliminated retail custom duties against America, streamlining the import process for pulses like lentils.
Notably, the production of green lentils is higher in the United States, while red lentils are favoured in India. The price of red lentils in the global market may not see a significant rise unless the U.S. increases its red lentil imports. Canada, a major producer of lentils, has seen reduced production this season, potentially affecting prices. Additionally, Australia, another red lentil producer, is set to begin harvesting in November, which should bolster exports and ensure a smoother supply to India.
In domestic markets, lentil prices range from approximately $0,79 to $0,94 per kg in Uttar Pradesh and $0,68 to $0,83 per kg in Madhya Pradesh. Retail prices are slightly higher, with lentils priced at around $1.28 in Uttar Pradesh and $1.26 in Madhya Pradesh.
United States increased lentil production by 4 percent
According to the latest estimate from the US Department of Agriculture (USDA) for 2023, lentil production in the United States has increased by 4 percent compared to the previous year, reaching 0.5710 million CWT (100 pound units) or 0.259 million tonnes. The USDA report also indicates that the sowing area for lentils in America increased by 2 percent to 0.545 million acres compared to the previous estimate but remained 17 percent less than the previous year. Harvesting is expected on 0.508 million acres, a 16 percent decrease from last year. However, the average yield rate of lentils is projected to increase by 212 pounds per acre compared to the previous year, reaching 1124 pounds per acre, which should positively impact production.
In conclusion, the increasing demand for lentils in India, coupled with global production and pricing dynamics, underscores the importance of vigilant market monitoring and strategies to ensure a stable supply of this essential commodity.