Source: Business Standard

 

Even with double-digit inflation for a large part of 2012, arhar or tur dal stayed well below its inflationary peak of 2010. It is a kharif crop grown mainly in Maharashtra, Karnataka, MP and AP. Drought in 2009 had led to low output. Thereafter, wholesale prices stayed in the range of Rs.5,450-6,000 a quintal for two years till July 2012, after which prices spurted again with a poor monsoon and a 20 per cent hike in MSP. The average retail price of tur hit ~71.15 per kg in September, the highest since March 2010.

 

Though prices have softened slightly since then, they are set to remain firm ahead. While the agriculture ministry has set this year's expected output higher than last year, the arrivals in the mandis from Maharashtra have not led to any significant lowering of prices. The MP crop has been delayed and should hit the markets in the second week of January. Yet as imported tur reigns high and domestic farmers are expected to curtail release of stocks to take advantage of higher prices, trader expectations continue to remain bullish on arhar.

 

IPM data till week ending December 29, 2012. The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt Ltd, tracks real-time wholesale prices of 62 agricultural products from more than 3,000 mandis. Due to differences in methodology, the IPM levels differ from the corresponding Wholesale Price Index (WPI). But broad trends are in sync. corresponding WPI, however, broad trends are in sync with each other. (See Graphic)