Tur Market Analysis: Price Surge, Supply Shortage, And Government Challenges

Tur, also known as pigeon pea, witnessed an eventful week in the agricultural market. The prices started at ₹9,150 per quintal on Monday and closed at ₹9,600 per quintal on Saturday, showing a notable increase of ₹450 per quintal. This rise was primarily driven by a steady demand for akola tur dal. However, the government’s efforts to stabilize the prices have not been effective due to the persistent mismatch between supply and demand.

Market Scenario

• Steady Demand & Tight Supply- Throughout the week, there was consistent demand for akola tur dal, which contributed to the price hike. The Tamil Nadu Tur Dal tender played a crucial role in boosting the market’s strength. Although raw tur & tur dal experienced average demand, it was the African tur that witnessed the most significant surge due to a tight supply situation.

• Price Challenges- Despite the government’s attempts to control the rising tur prices, the measures taken so far have not yielded the desired results. The stock levels in Burma and domestic markets remain low, exacerbating the supply shortage. However, there is hope that the pressure on African tur will ease from September 2023/October 2023, potentially providing some relief. To address the situation, the government has ordered importers to sell tur stocks that have been in storage for more than 30 days.

• High Prices & Decreasing Demand- Currently, raw tur is priced at around ₹100, while tur dal is priced at ₹135-138 per kilogram. These levels are the highest seen in the past 3-4 years. As prices continue to rise, the demand is expected to decrease due to increased risks associated with affordability. This trend poses challenges for farmers and traders alike.

Market Outlook

Considering the upcoming monsoon, high prices, and the government’s strict measures, it is expected that profit margins will increase by 8%-10% this year. The government will announce the tur Kharif MSP (Minimum Support Price) in June 2023, which will have a significant impact on the market dynamics. The market fundamentals remain strong, considering the supply-demand dynamics. However, the road ahead seems challenging. Domestic pigeon pea is unlikely to be available for the next 6-7 months, which will further strain the market. Although there was a slight weakening in prices towards the end of the week, it is uncertain whether the market will rebound significantly after this minor correction.

OFB’s Insight

The market witnessed a week of ups and downs, driven by steady demand, tight supply, and the government’s attempts to control prices. The high prices and risks associated with affordability are expected to decrease the demand for tur. Profit margins for farmers and traders, however, are projected to increase. The future hinges on the monsoon and the government’s policies, and the path ahead remains challenging. To ensure stability in the market, it is crucial for the government to implement effective measures that address the supply-demand gap. Additionally, steps should be taken to encourage domestic production to meet the growing demand. With the monsoon playing a vital role in agriculture, favourable weather conditions will be key to the bright future of tur.

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