Pressure on the price of gram due to the possibility of better domestic production

30-Jan-2025 05:38 PM

It seems like there’s a lot happening with the gram and pulses market right now. With an increase in the area of gram cultivation and favorable weather conditions, domestic production is expected to be better this year.

However, the import of duty-free gram from countries like Australia and Tanzania, along with early arrivals of new gram in some states like Maharashtra and Karnataka, is contributing to a potential oversupply, which could put downward pressure on prices.

Given the increase in the minimum support price (MSP) for gram, it’s possible that market prices might still drop below the MSP due to the strong supply. If that happens, the government could step in and buy large quantities from farmers to stockpile for buffer stock.

It’s interesting to note that imports of yellow peas have also been significant, and this could further impact the demand for gram as well.

With new stock of peas coming in soon, that could shift attention and resources away from gram, potentially putting more pressure on its price.

What do you think will be the most impactful factor here—government intervention or the balance between supply and demand?