Rising Prices in Gram and Gram Dal

Even before the festive season fully kicks off, gram prices have begun to rise in the domestic market in India, with a notable increase of up to 10% over the past month. Millers and processors are actively seeking to purchase gram, but the supply remains tight, contributing to the price hike. Gram dal and gram flour, key ingredients in many food items and sweets, are experiencing strong demand. According to trade analysts, this upward trend in gram prices is likely to continue in the coming months due to the persistent demand and complex supply situation.

Limited Imports and Complex Supply Chain

The supply of gram in the market is complicated by limited imports from abroad, and the government's stock is insufficient to meet the growing demand. Despite the duty-free import allowance for gram, major exporting countries have little surplus stock available. The large import of yellow peas, initially expected to alleviate gram prices, has not significantly impacted the market. Although yellow peas consumption has increased, the demand for gram remains robust. If imports of Desi gram from Africa and Australia increase by September, the possibility of a strong price surge in the domestic market might lessen.

High Domestic Prices Encourage Imports

The high prices in the domestic market have made imports from abroad more appealing. Due to the strong demand in India, there are indications that the deadline for duty-free imports may be extended beyond October 31, 2024. Meanwhile, NAFED has received approval to release its gram stock into the domestic market. In contrast, Tuvar dal prices have dropped by 4.2% in the last month. But they remain 9% higher than last year. The strong demand for Kabuli gram during the festive season has also pushed its prices up, further supported by limited market arrivals.

Kabuli Gram Prices Surge Amid Festive Demand

The domestic market price of Kabuli gram has risen sharply due to strong festive demand and limited supply. Big producers and stockists are holding back their stocks, leading to a restricted flow of goods into the market. Analysts suggest that the government might consider reducing the 44% import duty on Kabuli gram. In case to increase imports from Russia, which could help stabilize domestic prices. However, if duty-free imports are not allowed, prices could rise further during the festive season. While Kabuli gram is being exported to several countries, including the UAE, Türkiye, Algeria, and China, the rising domestic prices are reducing the competitiveness of Indian Kabuli gram in the global market.

The gram and Kabuli gram markets are currently experiencing significant price increases due to strong domestic demand, limited supply, and complex import dynamics. As the festive season approaches, prices are expected to remain high. With the potential for further increases if supply issues persist.