Toor Market in February Week 4: Downward Trends; Further Decline Ahead?

Toor prices declined during the 4th week of the month ending on 24 February. The prices declined across major markets due to reduced demand from millers and lower demand for toor dal. Continue reading for an overview of the recent developments and insights into the potential future toor market movement.

Market Trends for Toor Price

Below are the toor price movements across major mandis:

• Delhi: Lemon toor prices in Delhi declined by Rs. 50/quintal last week with current prices around Rs. 10550/quintal.

• Chennai: Lemon toor prices in Chennai remained stable at around Rs. 10350/quintal during the entire last week with today’s prices at Rs. 10250/quintal.

• Mumbai: Last week in Mumbai, Lemon toor prices declined by Rs. 200/quintal with prices currently at Rs. 10225/quintal.

Nagpur: Toor dal prices in Nagpur remained stable at Rs. 14400/quintal last week with current prices at Rs. 14000/quintal

Lower Demand for Toor by Millers

Millers stepped back in their purchasing activities due to the prevailing weak demand for toor dal. This decline in toor demand is due to liquidity worries and ongoing arrivals at production centers, creating an environment where sellers had to adjust prices to attract buyers.

Government Interventions to Regulate Toor Prices

The government has cautioned the industry about the possibility of implementing a price cap on imported toor to regulate domestic prices. This move is in response to concerns about the dominance of toor dal suppliers from Myanmar and Mozambique.

However implementing an import price cap presents challenges, such as the chances of decreased imports, resulting in financial losses for importers. Additionally, there are worries about hoarding by toor dal traders in Myanmar. The proposed MIP is expected to be in the range of $900- $1000/ton.

Toor Import Trends

Despite the increased prices, there has been a lower performance in the imports from Myanmar and Mozambique. In the initial three quarters of the current fiscal year, toor imports stood at 0.14 million tons and 0.2 million tons from Myanmar and Mozambique, respectively, compared to 0.21 million tons and 0.46 million tons in the same period of FY23.

Toor Market Outlook

Toor prices may experience further declines in the upcoming week. Millers are likely to withdraw from making fresh purchases due to weak demand for toor dal. Despite the current challenges, toor’s fundamentals remain strong. Consecutive years of reduced yield are expected to provide support for prices. Additionally, government procurement at market rates in Gujarat and selected markets in the southern region will provide support to toor prices.

OFB’s Insight on Toor Market

Toor prices may continue to decrease in the upcoming week. Need-based miller purchases, declining domestic arrivals, and limited imports are expected to provide support to Toor prices. The Consumer Affairs Secretary’s warnings about potential strict measures, such as price caps on imported toor are impacting market sentiment. During February and March, the toor business and prices typically experience weakness; however, there is often an observed improvement in demand and prices starting from mid-April.