Uh-oh! You may end up paying more for your dal this Diwali!

The Reserve Bank of India governor Raghuram Rajan has given us reasons to cheer before Diwali, but it seems we will still end up muddling our monthly budgets. This we say because there are fears that the prices of our staple food aka pulses will spike in the coming festival season.

“We are facing a huge shortage of 10 million tones (MMT) and we fear that the pulses prices may increase by a good 10% to 15% in the ensuing festival season, thus making food items a tad more expensive”, said DS Rawat, general secretary of industry body ASSOCHAM.

Apart from oil seed production, deficient rains have hampered the production of pulses in several states such as Maharashtra, Karnataka and Madhya Pradesh among others. Estimates are that the domestic demand for pulses is nearly 27 million tones while the production will roughly touch 17 million tonnes this year. This means that to meet the shortage, the government will have to increase its pulses import, which along with edible oil, will certainly push the food inflation north.

The situation may worsen with festivals around the corner. “The consumption of pulses and cereals increases because of increased demand for preparation of sweets and other delicacies going with different festivals, from Diwali right up to Christmas,” added Rawat.

He further noted that the demand for pulses is primarily driven by the middle class consumers. “The growth in organized food retail is likely to influence demand for pulses, as this sector depends largely on middle class boom. Most of the projections for growth in organized retail chain are highly optimistic,” he said.

It must be noted that the major pulses-producing states account for about 70% of the country’s kharif pulse production, however, with a shortage in monsoon rains, the production has been adversely impacted.

On the other hand, India imports different types of pulses from Myanmar Canada, the US, Australia, China, Kenya, Tanzania, Mozambique and Malawi among others. Currently, the average retail price of pulses is between Rs 90 and Rs150 per kg.

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