The sharp rise in the price of pulses has caught both consumers and the government unaware. The Consumer Price Index (CPI)-based inflation data shows that the price of “pulses and products" surged 29.8% in September from a year ago. Moreover, the pace of the price rise in pulses is quickening—it’s up from 9.4% in January and 25.8% in August. So much so that prices of certain pulses like tur and urad have more than doubled from a year ago, triggering consumer angst and protests by opposition parties.

The government is trying to cool prices through imports and invoking the price stabilization fund, reports PTI. But the measures may take time to show results. Festive season demand and low stock availability are putting upward pressure on prices. “Sentiments continue to remain bullish (from the price perspective) but demand rationing is possible after the spiralling rise," Edelweiss Agri Research said in a note.

According to Edelweiss, prices of some pulses like pea may cool due to incoming imports but that of urad may remain high due to low acreage and tight supplies. “Many farmers have not harvested their (urad) crop in Maharashtra due to complete failure. Possibility of higher imports is also small as availability in Myanmar is tight, it being the end of the crop season," Edelweiss said in a note.

Yet there were many warning signs that the price of pulses could spike and policymakers could have foreseen the current market tightness. India entered 2015-16 with a handicap of low pulses production in the previous year. Due to erratic weather, pulses production fell 10.7% to 17 million tonnes last year. Production of coarse cereals also fell. The fourth advance production estimates of major crops was released on 17 August.

There was also ample warning that the monsoon would not be good this year. Also, “pulses and products" inflation has been in double digits from February onwards, pointing to a rising price trend. These two indicators should have forced policy action well in time, instead of waiting for prices to spurt.

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