Output fears in pulses`market
2018-02-26
IMPORTS of pulses have started growing again amid fears of a shortage of local output and in anticipation of a spike in demand in Ramazan, due to begin from mid-May.
Traders say they have booked about 100,000 tonnes of chickpeas (gram) in the last four and a half months (ie between October and mid-February). A small part of the purchases has found their way into the market, but remaining larger shipments are in the pipeline.
Importers of pulses keep records of purchases on the basis of crop year that runs from October through September. In the last crop year, they had to buy 400,000 tonnes of chickpeas as the total production fell short of local consumption.
During the last crop year, gram production was around 360,000 tonnes, according to provisional annual data, against an estimated consumption of 700,000 to 450,000 tonnes.
Black gram and other varieties of chickpeas together account for threefourths of total production of pulses.
Historically, local demand has remained higher than pulses` output, making Pakistan a regular importer of pulses.
Import bills vary depending upon annual import requirements and global prices.
In the 2016-17 fiscal year, pulses` imports consumed a record $952 million. But in the first seven months of thecurrent fiscal year the import bill totalled just $315m, down 36pc from $491m in the year-ago period.
However, chances are that in the remaining five months (February to June) of this fiscal year the average monthly import bill of pulses will remain strong as Ramazan draws closer, traders say.
Does that mean the annual import bill will come close to that of the last year? The answer is no. In July-January, not only the import bill of pulses came down substantially, but the import volume also plunged 40pc to 352,000 tonnes from 593,000 tonnes in the year-ago period.
So, despite a recent spike in chickpea imports, overall pulses` imports should consume no more than $700m to $750m this fiscal year, senior officials of the Trade Development Authority of Pakistan say.
Right from the start of January, importers have been buying gram pulse, chickpeas, lentil and other pulses quite aggressively, traders say. Some purchases from Australia and elsewhere are keeping inventories strong ahead of Ramazan and some for maintaining prices and margins in case reports of damage to chickpea crops come true.
Demand for pulses gradually rises as Ramazan draws closer. It is also almost clear now that the local gram output will fall. However, the possible extent of the decline being projected in the media is speculative. Importers generally fuelsuch speculations to send signals to wholesale and retail markets before increasing prices of a food commodity, especially ahead of Ramazan.
Gram output may be smaller this year than in the last year, but the production loss may not be as large as importers are projecting, officials of the Federal Committee on Agriculture (FCA) say.
Back in mid-October, the FCA fixed production targets for gram at 569,600 tonnes. However, officials of the Pulses` Importers and Exporters` Association of Pakistan fear that the gram output may range between 350,000 to 450,000 tonnes owing to scanty rains in growing areas. FCA sources don`t rule out this eventuality, but insist that the gram production will still be in the range of 450,000 and 500,000 tonnes.
Pulses` production in the country remains erratic for a host of reasons, including the fact that less area is now available for cultivating them as growers keep shifting to more profitable, major cash crops, such as rice, wheat, maize, cotton and sugar cane. Besides, gains made in recent years in average yields of pulses are not high enough to make up for the loss in the area under cultivation.
In addition to various varieties of gram, Pakistan also produces lentil (masoor), mash, mung and some other lesserknown pulses.
Officials of the Ministry of National Food Security and Research say pulses`output jumped after a big grow-morepulses programme was launched back in the 2005-06 fiscal year.
`For example, gram production went past 800,000 tonnes in 2006-07, which resulted in a price crash the next year,` a senior official recalls.
But some new versions of such production-boosting programmes undertaken after the devolution of agriculture to provinces from 2010-11 have also made little impact on sustainable growth in pulses` output.
`Unless we can ensure, through market mechanism, that higher outputs of a crop obtained via better yield would continue to bring riches for growers year after year, no plan to boost output of that crop can be truly successful,` says a former secretary of the Sindh agriculture department.
Deficiencies in ensuring fair prices to farmers of pulses continue to keep production of mung, masoor and mash pulses far below their local consumption.
That is why when there is a big fall in output of any of these pulses, or when demand heats up ahead of Ramazan, the supply-demand gap has to be met through increased imports. `This has to stop now. Under the present tricky external account situation, any dollar saved on imports is really worth saving,` an official says. Mohiuddin Aazim