India is the world's largest pulse producer, consumer and importer accounting for 27% of the global pulse production. However, stagnant production has led to declining per capita consumption over the past 20 years. The per capita availability has progressively declined from 60 g in 1950-51 to 32 g at present. In India, pulses are grown on 22-23 million hectares area with an annual production of 13-15 million tons and per hectare of yield of 600-650 kg.

The major pulses grown in India are -

Pigeon peas (Arhar) and Tyson chick peas (Gram or Desi Chana)

Their share in the total pulses production is about 20% and 33% respectively. Important Pulse Markets in India are Mumbai, Delhi, Chennai, Indore, Kanpur, Bikaner, Hapur, Hyderabad, Jaipur, Jalandhar, Ludiana, Sangrur. Indian pulse market is very price sensitive market. There is a great deal of substitutability between pulse crops. If pigeon peas are high priced, more yellow peas will be consumed. If desi chickpeas are low priced, more chickpeas will be consumed.

International Scenario

At present, India, Canada and Turkey are the largest producers of lentils in the world with India in the lead and Canada is the largest exporter in the world with a share of about 50 per cent. The other important exporters are the U S, Australia and Turkey. The US has 8 percent share in world lentil exports. According to FAO, the commodity loan programme of the U S government is favourable for lentils, as the loan rates are well above recent producer prices, which may induce higher sowings in 2003 in the US. If the additional lentil produced is exported, it may affect the global prices significantly because the global trade in lentils is reltively low at about 1 million tonnes.

The Food and Agriculture Organization (FAO) believes 54.4 million metric tons (MT) of pulses were produced around the world in 2002. This is 1.4 million MT less than expected, but 2 million MT more than in 2001. The result is surprising for growers, processors and exporters in countries such as Canada and Australia. But, it reflects the fact output jumped 12% in the developing countries even as it sank 16% for the developed countries, mostly due to poorer crop conditions in Australia and Canada. Summarizing output, the FAO said pulse production was unchanged from last year at 8.4 million MT in Africa; up 3.7 million MT at 27.1 million in Asia; down 100,000 MT at 7.6 million in Europe; up 800,000 MT at 6.2 million in Latin America and the Caribbean; down one million tons at 3.8 million MT in North America; and down 1.3 million at 1.4 million MT in Oceania. Production in developing countries is now estimated at 41.4 million MT, up from 36.9 million last year and an improvement on the 39.1 million MT harvested in the year 2000. Pulse output in developed countries sits at an estimated 13 million MT, down from 15.5 million in both 2000 and 2001. The reduction in world production is expected to have more impact on world trade levels than the shift in where pulses were grown in 2002. The FAO is looking for world trade in pulses to contract 500,000 MT during the 2002-03 marketing season to under seven million MT. Most of the decrease will be borne by developed nations, with Canada and Australia accounting for all the net decrease in sales by that group of countries. Production data available from the FAO suggests dry edible beans account for up to a third of world pulse output, followed by field peas at around 20%; chickpeas at 13%; broadbeans at 7%; and lentils, cowpeas and pigeon peas at roughly 6%. Interestingly, dry edible beans and field peas dominate world trade in pulses. Beans generally account for less than 30% of the world pulse trade, while field peas often account for over 40%. Because of poor pea harvests in Canada and Australia, peas should drop behind beans in importance during 2002 and 2003. Lentils are the next most actively traded pulse, accounting for an average of 11% of world trade during the past five years, followed by chickpeas with an 8.6% share of world pulse trading volume.

Indian Scenario

Masoor is mainly cultivated in Uttar Pradesh, Madhya Pradesh and Bihar and to a small extent in West Bengal, Rajasthan, Haryana, Punjab and Assam. It is grown on an area of about 1.4 million hectares and its annual output is about 8-11 lakh tonnes. It is cultivated on light loams and alluvial soils in north India and in well-drained light black soils in Madhya Pradesh. In Madhya Pradesh it is cultivated in Sagar, Jabalpur, Bundelkhand and Bhopal, in Uttarpradesh in Kanpur and in Rajsthan in Kota. It is sown during Oct-Dec. if sown late, one more irrigation may be necessary. The crop matures in about 105 days. It is harvested before it is very ripe and dried for a week before threshing. It is unripe pod is used as a green vegetable and dry leaves, stalks, husk, broken grains as cattle feed.

India's total pulse production hovers at an average of 12-14 millions tons in a crop year. The production follows the trend displayed by all agricultural crops peaking on a normal monsoon year and dropping when the rains fail. While India produced only 11.14 million tons of pulses in 2002-03, the second advance estimates of the Government of India predict that the 2003-04 crop will touch 14.42 million tons. The corresponding graph displays the annual, khariff and rabi production of pulses for the last ten years.

Total Production of Pulses

Trend in Average Area and Production & Share to Total Food Grains

Year	1960		1970		1980		1990
Particulars	Area	Prod	Area	Prod	Area	Prod	Area	Prod
Pulses	23.09	11.11	22.79	11.00	23.18	12.16	22.92	13.42
% to FG	19.53	13.06	18.26	9.86	18.28	8.30	18.51	7.21

Area - million ha, Production - million tons

The state of Madhya Pradesh is the largest pulse producer, accounting for about 26% of total production from 1996/97 to 1999/00. Other states with significant output include Uttar Pradesh (18 %), Maharashtra (14 %), Rajasthan (14 %), Karnataka (5 %), Andhra Pradesh (5 %), and Bihar (5 %). In India pulses are grown in the two major cropping seasons, viz., khariff (harvested in Sep/Oct) and rabi (harvested in Mar/April. The major khariff pulses are Green beans (moong beans), Black Matpe (Urad), Pigeon Pea (Arhar/Tur) and Cow Peas (Lobhia). The major rabi Pulses are Gram, Chickpeas, Green peas and Lentils.

India's Pulse Varieties

Imports

India's imports of pulses has increased from 0.63 million tons to 2.16 million tons from 1998-99 to 2002-03. The value of imports also has increased from US $ 0.73 million to $ 611.29 million in the same period. The imports peaked at 2.32 million ($694.36 million) in 2001-02. The Government of India has allowed unrestricted import of pulses with low duties for more than two decades now. The stagnancy in production, the importance of pulse as a source of protein in the Indian diets and the fall in per capita availability has been the reasons for this move. However, despite the unrestricted imports and low tariffs, imports relatively accounted for a smaller share of supply and consumption in the 1990's. Since the 2000's though the imports have been increasing. Peas, chickpeas, dried beans, moong and tur are the major pulses that are being imported into the country. The corresponding graph shows the trend displayed by India's pulse imports.

Imported Pulses (2001-02)

India Countrywise Import of Masur

India Countrywise Import of Masur

Industry Scenario

The Department of Food & Civil Supplies of the respective state governments issues licences to wholesalers, commission agents and retailers. A wholesaler can stock up to 2000 bags (200 tonnes), a retailer up to 20 bags (2 tonnes), and a commission agent (middle man) can have unlimited stocks, but has to dispose of the stocks within 15 days. No licence is required in the State of Jammu & Kashmir.

The market intermediaries play a key role in marketing of pulses in India. The produce from the major producing states and the imports coming into the country through the ports are channeled to other parts of the country. The producers sell their produce at the various primary or secondary wholesale markets present in the producing states. Importers who are licensed to import pulses sell the consignment to a broker, commission agent, middlemen or directly to a secondary wholesaler miller or processor. The brokers and commission agents sell to primary wholesalers who in turn sell to millers and processors of dal or to secondary wholesalers. The majority of this quantity moves from the primary wholesalers to millers and processors. A smaller portion of the whole pulse moves from the wholesaler to consumer via the retailer. The dal produced by the millers is sold to large mills or to secondary wholesalers. The major portion of the dal from dal millers and primary wholesalers goes to secondary wholesalers, and is then sold to consumers as dal through the retailer. The secondary wholesalers also sell the dal to flour mills for manufacture of flour, which moves to consumers via retail markets. Whole pulses from secondary wholesalers are sold to frying mills to produce puffed or roasted chickpea move to consumers via retail markets. The flour/roasting mills are present in the value chain of pulses for which these products are consumed.

Schematic representation of pulse value chain

Pulse Market Volatility

Global pulse trade has expanded rapidly in the last twenty years. However, the trade history is somewhat volatile due to supply and demand variability. Trade patterns have also shifted during this time period. Former exporters (like Chile as a lentil exporter) have disappeared and new exporters have developed. The next twenty-year period is likely to see these types of changes continue as Canada puts pressure on the supply side.

The prices in the domestic market fluctuate according to the domestic and international demand and supply scenario. Generally, the prices drop when the new crop comes in the market. The analysis of five years price trend of gram at Indore reveal that the prices are on an increasing trend from June to September, while it starts falling from November, with the lowest prices being reported in March and April, when the new crop arrives in the market.

Suitability of Futures in Masur

India's Pulse Imports