Wholesale prices rose through 2009 and 2010, reaching a peak of Rs.6,660 a quintal in September 2010. Since then, a record crop in 2010-11 led to falling prices.

The all-India wholesale prices have been range-bound between Rs.5,300 and Rs.5,960 a quintal over the past 12 months. Yet, now with expectations of low output this year, there has been an uptick in prices since June. The kharif output of urad that accounts for two-thirds of India’s annual output is estimated by the Ministry of Agriculture to be 11% lower in 2012- 13 than the previous year. Moreover, sowing for the rabi crop was down by close to 200,000 hectares on January 18.

Consequently, inflation is trending up over the past five months. Despite India being the highest producer of urad,imports are high from Myanmar, Thailand,Singapore and Australia. With low domestic output this year, imports can help cap a significant rise in domestic prices. 

IPM data till week ending January 26,2013. The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt Ltd, tracks real-time wholesale prices for 62 agricultural products from more than 3,000 mandis. Due to differences in methodology,the actual levels of the IPM differ from the corresponding WPI. However, broad trends are in sync with each other.