India / How is Myanmar coup impacting prices of urad, used to make idli, dosa, in India?

New Delhi: Urad dal or black matpe, a major ingredient in dishes like dosa, idly and vada, has witnessed an increase in prices after the import of the commodity has been disrupted from Myanmar — the second-largest producer and largest exporter.

Between 15 February and 15 March, the price of urad in the Mumbai wholesale market increased to Rs 110/kg from Rs 97 per kg. The retail price of the commodity in the Maharashtra capital also rose to Rs 130/kg from Rs 117/kg in the corresponding period.

In the national capital, the retail price of urad is at Rs 123/kg up from Rs 100/kg, while it has risen to Rs 145/kg in Lucknow from Rs 113/kg, according to data from Ministry of Consumer Affairs, Food and Public Distribution.

The Myanmar factor

According to industry experts, the commodity’s prices are likely to rise further as the import disruption from Myanmar due to the political unrest in the country — after the military coup in February — is likely to continue.

Moreover, the carryover stock is also less in both countries due to crop damage caused by excessive rainfall last year. In Myanmar and India, urad harvest arrives in the market in December and September, respectively. So the scarcity is expected to last a while.

Bimal Kothari, vice-chairman, India Pulses and Grains Association, said, “The prices of urad is likely to further increase in India as the crop is short in supply from both major import destinations of East Africa and Myanmar. The banks have been closed in Myanmar since February and the customs are also not working there. Moreover, many other shipping companies are also not deploying their containers to countries facing unrest.”

He added, “The import quota issued by the Centre of 4 lakh metric tonnes is in accordance with our supply and demand scenario but due to the political unrest in Myanmar, the import shipments won’t be easy this year.”

According to estimates, Myanmar is the largest exporter of this black legume with a share of 58 per cent of the total worldwide exports. India buys about 84 per cent of its total urad imports from Myanmar. The Chennai port accounts for about 78 per cent of total urad import into India, and nearly all of it is from the Yangon Port.

In the 2020-21 fiscal, the government issued an import quota of almost 4 lakh metric tonnes (LMT), out of which 3.78 LMT has been imported so far. According to experts, the remaining quota of urad imports is likely to remain unfulfilled as the government has neither extended the 31 March deadline nor is the import from Myanmar likely to resume soon.

According to Vivek Agarwal, broker, commodity brokerage firm JLV Agro, roughly 40,000-50,000 tonnes of urad import has been delayed this fiscal.

“There is one container possibly coming from Myanmar this month but despite that, the import will remain unfulfilled this financial year. Last year total urad quota was 4 LMT. The new import quota issued is also 4 LMT. However, urad is only majorly produced in Myanmar and on the account of trade disruption the price might increase by at least Rs 5-10/kg in future,” he said.

Since the coup, major shipping line Maersk has announced a temporary suspension of its operations in Myanmar.

Fall in India’s production

Urad production in the country has also witnessed a slide, further fuelling the price rise this year as India already produces less amount of the pulses than its annual consumption.

The commodity production in the country fell from 34 LMT in 2017-18 to 20 LMT in 2019-20.

This decrease in domestic production has been further worsened by the shifting of urad cropping in Myanmar, where farmers have shifted to moong crop on the account of bulk purchase by China.

“The farmers of Myanmar have also shifted to moong crop — which is largely imported by China — from tur and urad, which are major imports of India due to major buying by China, whereas India is a fluctuating market which often applies import ban on its market,” said Rahul Chauhan, researcher at commodity market research firm IGrain India.

“The scarcity is going to be for a long time — at least till June and July,” he said.

“Over the years, with major demand from China, the production of moong in Myanmar has increased from 3 LMT to 6 LMT this year. Meanwhile, tur and urad production in 2017 was 3 LMT and 6 LMT. In 2018, it went to 2.5 LMT and 5 LMT, respectively, which has further declined to 1.75 LMT and 4.5 LMT in 2020,” he added.

‘Hope for temporary disruption’

Despite the recent harvest season in India, urad prices are also hovering above the MSP of Rs 6,000 per quintal. The wholesale price of the commodity at a mandi in the major producing state of Maharashtra stood at Rs 7,600/quintal, while imported urad is around Rs 7,300-7,450/quintal in Tamil Nadu markets.

However, some experts are hoping that this might be a temporary disruption and things might smoothen out soon.

Satish Upadhyay, an international agro-commodity broker and secretary of Dalal Association in Mumbai said, “Huge funds of the shippers of pulses cargo is blocked and most of these shippers are clearing their stocks at Myanmar to help them release their funds and plan to return to their native places, as…the ongoing civil war prevails. They would not want to return unless the circumstances are normalised.”

He added, “Roughly, over 1,500 containers worth 35,000 tonnes are stuck in (Myanmar) port out of which 200-300 have been cleared. We have a separate import quota issued this year for 4 LMT urad which will be valid till March 2022. Hence, there will be no long-term disruption. The new Myanmar crop will arrive in January 2022 and our crop will arrive in October.”