Retailers ignore market pulse, keep prices on boil

Mumbai: Consumers continue to pay more for their daily dal despite a steep drop in prices in the wholesale markets. The prices of pulses at the Mumbai APMC market have fallen between 10% and 25% since April. However, prices at the retail outlets and local kirana stores have yet to show any downward movement. Retailers, both large formats as well as kirana shops, claim that they change their prices according to market movement.

Often, the final customer has to bear the brunt of the price buildup that includes taxes at APMC mandis, commissions, labour charges, brokerage, transport charges and the margins of retailers at Rs 4 per kg (Rs 2 taxes and Rs 2 margins). Even if all these are taken into account, retailers are still selling the pulses at premiums ranging between Rs 6 to Rs 20 per kg, said Jalgaon based pulses miller Satish Mittal. The prices have dropped down by Rs 5 to Rs 7 per kg and retailers should have cut prices by this time, he added.

At the Mumbai APMC markets, prices of the FAQ (fair average quality) of pulses has dropped between Rs 400-Rs 1,000 per quintal. Price of chana that was ruling at Rs 3,400 per quintal in April has dropped to Rs 2,900-3,000, moong dal has dropped by Rs 500 at Rs 3,000, urad has slipped by over Rs 1,000 to Rs 3,200 while tur has dropped by Rs 400 to Rs 3,200 per quintal.

In Delhi mandi, prices of whole chana have dropped from Rs 2,500 per quintal to Rs 2,170, prices of moong have gone down from Rs 3,600 to Rs 2,700 since April. Prices for urad in Mumbai have dropped from Rs 3,200 to Rs 2,500 while tur has slipped from Rs 2,500 to Rs 2,100.

Representing large retailers, Pantaloon Retail foods business CEO Arvind Chaudhary said the company changes selling prices periodically taking into cognisance the wholesale market prices and other factors. He said prices at their retail chain Food Bazaar have fallen. Subiksha Trading Services MD R Subramanian said: "We follow a dynamic pricing model where we re-price in line with market movement."

Despite this being a slack season for pulses, the exchange rate has added to the pressure on the prices. Strengthening of the rupee has encouraged imports and added to supplies even though demand has not picked up. As a result, there has been a drop of Rs 2 per kg in import prices. India has decided to import 15 lakh tonne of pulses that will include urad, tur, moong, masur, gram and yellow peas this year and 2.87 lakh tonne of pulses have been contracted as on April 25.

Delhi-based Sohan Lal and Company’s Sandeep Sabharwal said that tightening of money supply in the market has created a bearish trend in addition to dollar-rupee parity. Mr Sabharwal added that May to July is generally slack and with a good production of mangoes, some demand for pulses is also shifting towards this fruit.