Toor Dal Prices Soar Amidst Government Procurements And Scarcity

Toor dal, a popular pulse in India, witnessed a significant price surge during the previous week (29 May 2023 – 4 June 2023). The sustained toor demand coupled with government procurements and scarcity, led to a strengthening of prices. Let’s explore the market overview, the reasons behind the price increase, and potential measures to address the dal shortage.

Market Updates

• Market Fluctuations & Government Procurements– The week started with Toor opening at ₹10,000 per quintal on Monday in the Akola market. However, by Saturday evening, the price had increased to ₹10,400 per quintal, reflecting a notable increase of ₹400 per quintal. This consistent price growth has been observed for several weeks.

• Reasons Behind Surge– One of the main drivers behind the price surge is the substantial procurement of toor dal by various state governments through tenders. These government agencies have also been supporting the market by purchasing imported dal at higher prices. Tamil Nadu Civil Supplies alone procured over 30,000 tons of dal in the past 3-4 months, primarily from Burma and Africa.

• Scarcity & Millers’ Struggles- Toor scarcity leading to high prices has posed challenges for millers. Many mills have been facing difficulties in procuring toor at lower rates, leading to reduced production capacities. Experts predict that if the dal shortage continues, several mills may even be forced to shut down operations in the coming months.

• Government Intervention & Importing Solutions- To address the dal shortage and stabilize prices, it is crucial for the government to take proactive measures. The government currently holds a stockpile of over 1.5 lakh tons, which should be promptly sold to millers at lower prices through tenders. Importing toor dal from Africa and Burma should also be expedited to increase the supply and meet the rising demand.

OFB’s Insight

Toor dal continues to be an essential staple for many households in India, and addressing the scarcity and high prices is crucial for maintaining food security. By implementing effective government interventions, such as selling stockpiles and increasing imports, the toor dal market can stabilize, benefiting both consumers and producers alike. The toor market remained strong during the previous week, despite the imposition of stock limits by the Ministry of Consumer Affairs. However, future market conditions are subject to government policies and the monsoon. It is advisable for stakeholders to stay updated with stock details on the portal and strictly adhere to stock limit regulations. 

Read more: Prioritizing Domestic Supply, Indian Government Restricts Sugar Exports

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