India is readying to harvest a record pulse crop in Rabi season. With area planted at a new high of 16.0 million hectares (last year 14.4 million ha), production is estimated by the government at 13.4 million tons (sharply up from weather affected 10.8 million tons this time last year).

Specifically, chana (chickpea) crop is estimated at 9.1 million tons, some two million tons higher than last year’s. Relatively small quantities of lentils, peas, urad and moong are also harvested.

Pressured by bright crop prospects and continuing imports, domestic prices have declined sharply. Indeed, chana prices have collapsed from a high of Rs 70,000 a ton (over $ 1,000 a ton) to the current level of Rs 46,000 a ton ($ 660/t). Prices are expected to stay under downward pressure.

India’s import from April to December 2016 was an estimated 4.3 million tons. In other words, the massive rebound in domestic production has had little impact on import volumes. Of course, domestic demand is up encouraged by a rebound in rural incomes following good monsoon and lower, affordable consumer prices.

But the pulse market is fraught with uncertainties. Will the government quickly move in to support falling prices by procuring sufficient quantities? The target for creation of buffer stock is two million tons and currently just about half the target has been achieved.

The most critical uncertainty is the proposed stoppage of methyl bromide fumigation at the Indian port of discharge after March 31. If implemented, this will surely disrupt the flow of pulses into the Indian market in the short run. Efforts are on to come to some understanding, but the outcome is anybody’s guess on current reckoning. Exporting countries such as Canada are rather upset with the bolt from the blue. To be sure, Canada is the largest pulse supplier to India and India is its largest market.

Exporters and importers are examining the possibility of fumigation at some intermediate port such as Singapore; but is may involve cost and time. Some countries such as Brazil have agreed to conduct methyl bromide fumigation at the port of loading.

There are many ways in which the government of India can respond to the situation. There is the possibility that storage restrictions will be waived; exports will be opened up for all pulses (currently only kabuli chickpea is allowed); procurement through government agencies will be accelerated; and last, import duty may be imposed.

Looking ahead, it is important that Indian pulse growers who have responded admirably to the price situation in 2015 and 2016 by planting and harvesting record crops this year do not feel disappointed or disillusioned because of falling prices and belied price expectation. They may not plant as many pulse acreages in 2017-18.

Another looming uncertainty, incipient though, relates to the possible recurrence of the dreaded El Nino in 2017 which curtails rainfall and entails dry conditions.