Crisil raises concerns over 'inflation' in pulses due to changing weather patterns

economictimes.indiatimes.com:

Crisil Ratings. Moreover, truant weather patterns last year caused some damage to production, which could have some impact on prices.

The rating agency said that this year too, policymakers will have to keep their eyes peeled on monsoon behaviour and its implication on prices, and accordingly take measures to correct price pressure. This year with rains delayed and uneven, and impacting pulses sowing, pressure on prices could be felt.

But, continued government intervention via price stabilisation schemes could ensure that the next peak remains less intense. In a recent move, the government announced the removal of the 40% procurement ceiling for key pulses (tur, urad and masur) which will allow farmers to sell any amount of their produce.

This should encourage farmers and help increase the sown area in the cropping seasons to come. Higher procurement also facilitates better price signaling through the announcement of MSP.

Incorrect price signaling was a key reason which led to cobweb pattern of growing pulses. Other timely policy measures including the recent announcement to impose stock limits on arhar and masur to discourage traders from stocking supplies, also keep a check on price spikes.