India’s Desi Chickpea Market: Price Support Programs and Market Dynamics

Summary

India's desi chickpea market is experiencing downward price pressure as harvest begins, with prices falling below government-mandated minimum support levels. However, proactive government intervention through price support programs and interesting import dynamics are shaping the market's direction.

The Indian desi chickpea market is entering a critical phase as harvest season begins, with prices currently ranging between ₹55,000 and ₹63,000 per tonne – notably below the government's minimum support price of ₹56,500 per tonne. This price weakness comes at a time when arrivals are just beginning to pick up in key growing regions like Maharashtra and Karnataka.

In response to these market conditions, the Indian government has taken preemptive action. The Ministry of Agriculture and Farmers Welfare has authorized Karnataka's state government to purchase 96,500 tonnes of desi chickpeas under its price support program. Following patterns seen in the soybean market, other major producing states like Madhya Pradesh and Rajasthan may follow suit with similar support measures.

Several factors are contributing to the current market dynamics:

1. Increased Cultivation: Farmers have expanded their planting area to 9.86 million hectares, up from 9.59 million hectares in the previous year.
2. Import Surge: India's desi chickpea imports saw a remarkable 325% increase in 2024, reaching 574,000 tonnes compared to 131,000 tonnes in 2023.
3. Yellow Pea Imports: The import of nearly 3 million tonnes of yellow peas in 2024 is adding additional pressure to the pulse market.

The market impact is already visible in international trade flows. Indian buyers have reduced their Australian desi chickpea imports in recent weeks, with bulk export prices from Australia currently at $630 per tonne and container shipments at $670-675 per tonne. These prices could face further downward pressure as India's rabi harvest gains momentum.

Conclusion

While current market conditions suggest continued price pressure on desi chickpeas, India's government price support mechanisms could provide a crucial price floor. The interplay between domestic production, import volumes, and government intervention will be key in determining market stability in the coming months. Traders and market participants should closely monitor government procurement programs and import policy developments for market direction.