September Week 2: Discovering The Toor Dal Price Scenario
3 months ago
Grains & Pulses
Grains & Pulses

September Week 2: Discovering The Toor Dal Price Scenario

Last week, the Akola Toor Dal market witnessed Rs. 400 per quintal drop which can be attributed to the dwindling Toor Dal demand in Akola. Despite recent rainfall improving crop conditions, the market outlook depends on supply-demand balance, import trends, and upcoming weather patterns.

The Toor Dal market in India has been witnessing intriguing developments in recent times. Over the past six months, there has been a notable 50% price surge. This price upheaval has set the stage for a closer examination of the key factors that are exerting their influence on the Toor Dal industry, let’s explore the same:

Lack Of Demand Affected Price

Last week, the Akola Toor Dal market opened at Rs. 12,400 per quintal on 4 September 2023 and closed at Rs. 12,000 per quintal on 9 September 2023. This Rs. 400 per quintal drop can be attributed to the dwindling Toor Dal demand in Akola.

Furthermore, adverse weather conditions, characterised by untimely rains in the Toor-producing areas, played a pivotal role in the price decline of Rs. 300-400 per quintal, depending on the quality, in wholesale markets.

It’s important to note that this trend isn’t unique to Akola alone. Other Toor-producing regions have experienced a similar fate, facing the double whammy of unfavourable weather and sluggish demand, causing prices to drop. Even Lemon Toor prices weakened by Rs.300 per quintal. The challenges didn’t end there, as mills struggled to source Toor, leading to an additional price drop. 

Current Stock & Import Woes

Adding to the complexity of the situation, Lemon Toor Dal stocks at Chennai Port are reported to be low. While this might seem like a local issue, it is connected to global supply dynamics. Supply pressure persists due to various issues in Africa, a significant supplier of Toor Dal to India.

This year’s Toor Dal crop in Africa has been weak due to a variety of problems, including vessel availability and container shortages. In September 2022, India imported a total of 92,000 tons of Toor Dal from Africa. However, this year, the imports are estimated to be less than half of that. With domestic Toor Dal taking at least 3 months to arrive, there’s an estimated 9-10 lakh households’ domestic demand that remains unfulfilled.

Crop Status

Toor Dal sowing is approximately 6% lower than usual. However, recent rainfall has brought relief to the crops. Presently, the condition of Toor Dal crops is favourable in most areas. But the future lies in the hands of upcoming weather patterns, which will ultimately determine the yield.

Market Outlook

In August 2023, a total of 16,250 tons were imported from Burma, and 2,250 tons were imported from Tanzania. There is an anticipation that, in September 2023, there will be Toor imports from Mozambique, up to about 60,000 tons.

Imports from Tanzania are also continuous, which has caused prices to weaken slightly. However, according to traders, the expectation of a significant price drop is low due to low stock levels in India, as there is less stock in Burma and the pace is expected to pick up.

OFB’s Insight

Toor Dal price fluctuations are primarily driven by the delicate balance between supply and demand. High Toor Dal prices might lead to a shift in consumer preferences towards other pulses. If Lemon Toor remains above Rs. 11,200 per quintal and Akola Bilti Toor stays above Rs. 12,000 per quintal, the outlook for September and October appears promising. The market fundamentals are strong, and if supply issues are resolved, stability can be expected.

While recent rainfall has brought relief to Toor Dal crops in most areas, the future remains uncertain and dependent on upcoming weather patterns. Import trends also play a role, with imports from Burma and Tanzania affecting prices, but a significant price drop is not expected due to low stock levels in India.

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