iGrain India - The production of urad (black gram) in India during the Kharif 2024 season is expected to fall to its lowest level in a decade, with estimates pegging it at 12.10 lakh tonnes. This marks a significant decline compared to previous years when the figures ranged between 12.50 lakh tonnes (2015) and 27.50 lakh tonnes (2017).
The main reason behind this sharp decline is the reduced sowing area for urad, particularly in key producing states like Maharashtra and Karnataka.
Many farmers in these regions have shifted to growing more profitable crops like tur (pigeon pea), despite higher market prices for urad compared to the government's support price.
As a result of the reduced domestic output, India has been heavily reliant on imports to meet the demand for urad, especially from Myanmar.
The government has allowed duty-free imports of urad until March 2025, and the import volume has surged significantly.
During the first seven months of FY 2024 (April to October), India imported around 4.60 lakh tonnes of urad, a 43% increase over the same period last year. This indicates a growing dependence on imports to meet domestic demand.
The heavy importation has kept the supply chain stable, preventing a major price spike for urad. However, the rising import levels and the likelihood of further increases in imports due to the domestic shortfall are starting to influence the prices.
As of November 11, 2024, the price of general average quality urad (FAQ) was recorded at ₹8650 per quintal in Mumbai and ₹8450 per quintal in Chennai, with special quality (SQ) fetching even higher prices.
In Myanmar, the price of FAQ urad was around $975 per tonne, down slightly from $1005 earlier in the month.
While the situation in Myanmar remains uncertain, there is potential for an increase in sowing there, which could help stabilize the global supply.
However, given India's shrinking domestic production, it is expected that imports will continue to rise, possibly pushing prices higher in the months to come.