Price of arhar dal had shot up to over `200 per kg. The rise is allegedly manufactured by a cartel of big dealers in Naya Bazaar.

The dal crisis which recently hit the country was more man-made than natural, a special investigation by India Today TV has revealed.

The channel caught on camera middlemen and forward traders dealing in Delhi's biggest commodity market - Naya Bazaar - explaining how not just dal, but much of the agricultural produce in India is priced by a cartel of big dealers. In April this year the price of arhar dal suddenly spiked-dal that was available in the market for less than Rs 70 a kg, jumped to over Rs 200. While commodity traders blamed untimely rains, an India Today TV special investigation conducted over three weeks exposed that the real culprits were hoarders sitting in Old Delhi.

Posing as farmers who were looking to sell their crop of arhar in the market, the team spoke to several commodity traders who explained how the entire racket is run.

"Big hoarders and commodity traders keep track of agricultural production in such states as Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh and Gujarat. They specially depute a person to track the production and the yearly fluctuations. Thus, they do a complete data analysis. Then they pick up a commodity whose production has been weak-the "loose point"-and start tugging its price. This time arhar was the loose point. It is also happening to urad, which unlike arhar, is not even imported. This is complete fixing," said one of the dal 'fixers' Mohan Lal (name changed).

According to the India Today TV investigation, the big traders of Naya Bazaar act as a cartel. They first engage experts who survey crops in major agricultural states and estimate the prospective yields of each crop.

Another fixer Rajesh Bhalla (name changed) explained the modus operandi. "While a common man does not know how prices will fare in next 15 days, big firms engaged in commodity trading are in a position to know well beyond that as they hoard a lot. This time for arhar dal, there was just one crop coming in from South Africa. There was less crop in India already. Stock was almost nil. They also measured the stock in Mumbai, then started increasing prices in the market," Anand said.

According to the India Today TV investigation, while forward trading in agricultural commodities is legal in India, people such as Lal and Bhalla do not operate at the official NCDEX Agricultural Commodity Exchange. Instead, they bet in an illegal 'satta' market that operates out of Naya Bazaar. Here the future price of a commodity has little correspondence to the actual produce, instead it depends on manoeuvrings of speculators who scheme many months in advance to make a killing.

Lal told India Today TV that big firms that had hoarded large sums of dal or other produce sell it on their own terms by keeping a margin. While it may appear they stand to loose and not profit if one sees daily fluctuations, it is not so as these companies work over a long term, 3-4 months. The investigation further revealed that this was just tip of the iceberg. The satta operators manufactured an artificial scarcity. The India Today TV team found that the dal scam had its tentacles spread from Myanmar all the way to African countries which are major pulses producers.

Big importers, mostly based in Mumbai, sent procurement agents to these countries. Everything is perfectly calculated: how much dal has been produced in India, how long will it take for stocks from Myanmar and Africa to reach India, etc. Importers take delivery of the stock, but hoard it at foreign ports so that prices shoot up in the Indian market. "Ships from Myanmar carrying tonnes of dal are made to halt for days at ports in Singapore; those coming in from Africa are asked to slow their journey to India. The aim is simple, to create scarcity in India," claimed Bhalla.

On being asked why rates of foreign imports went up and ours down, he casually said: "It's all manipulation sir. That's imported stuff, available in bulk."

If these fixers are to be believed, the imported stock, available for cheap in bulk is then sold at inflated prices in India. Mill owners are forced to purchase dal from importers at these hugely inflated rates, who then spike the rates in the wholesale market. Small retailers charge their own premium, making dal unaffordable for consumers.

An importer-retailer nexus exists across Asia and Africa. While these importers and fixers make a killing by manipulating dal prices, farmers struggle to get even the bare minimum for their crops. As per India Today TV's findings, arhar might have been the latest target of the commodity cartel, it was by no means an isolated case.

Mewa Singh (name changed) who owns a shop in the Gali Jatwara at Naya Bazaar confidently told the India Today TV team to brace for a spike in the prices of masur and urad next. "The pulses produced in UP are of better quality this year. The prices will go up by Rs 20-30. Prices of masoor dal will be not as high as that of black dal. Right now black dal is Rs 92-93 a kg and it will go up to Rs 120," Singh said.