As prices of pulses keep rising, consumer affairs ministry asks India’s largest retailer Reliance Retail to cut prices

New Delhi: With major retail chains yet to reduce pulse prices and continuing to profit from a widening gap between wholesale and retail rates, the consumer affairs ministry has asked Reliance Retail to lower both prices and profit margins, two people aware of the development said. 

The ministry is of the view that once India’s largest retailer by revenue adopts these measures, other retailers will follow.

The government had earlier directed major retail chains to reduce retail prices, as reported by Mint on 8 October. But, according to data from the department of consumer affairs (DoCA), pulse prices have actually increased since then.

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The average retail price of tur on 7 October was ₹163.31 per kg, urad was ₹124.79 per kg and chana dal ₹94.32 per kg.

However, by 14 October, instead of a noticeable reduction, the retail price of tur had come down only marginally to ₹163.02 per kg, while urad had increased to ₹125.07 per kg, and chana dal had risen to ₹94.56 per kg, showing minimal impact from the directive.

As of 14 October, the average wholesale price of chana dal was ₹8,740.78 per quintal, tur was ₹15,333.41 per quintal, and urad was ₹11,517.26 per quintal. 

Key role in food inflation

Pulses play a crucial role in India's food inflation due to their significance as a staple and a key source of protein.

Factors such as demand-supply gaps, seasonal production issues, high dependency on imports, and rising input costs have contributed to the inflationary pressure on pulses.

"We have asked Reliance Retail to reduce the retail prices of pulses. Reliance Retail's coverage spans 4,000 pin codes, and once this retail chain starts lowering prices, others may also be compelled to follow suit,” one of the people cited above said.

"The retail chain has agreed to align retail prices with wholesale rates, so that consumers will benefit from it." 

The matter was discussed at meeting between government officials and Reliance executives last week.

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The cost of a home-cooked vegetarian thali surged 11% year-on-year in September, driven by rising vegetable and pulses' prices, as per a report by the rating agency Crisil.

The prices of pulses, which account for 9% of the vegetarian thali cost, rose by 14% due to a drop in production in 2023. This led to a lower opening stock this year, further contributing to the uptick in thali prices, the report said.

“Prices of tur and urad in major mandis have dropped by nearly 10%, but retail prices have not seen a similar decline,” the consumer affairs secretary Nidhi Khare had said on 8 October.

The second person cited above said, “The main festivals are around the corner, and a price reduction will provide much-needed relief to consumers.”

"We are not asking them to stop making profits -- nor will they. Our only intention is to put a check on excessive profit-making practices," this person said.

Rising stocks

The stocks of pulses held by major retail chains have risen over the past three months, from 7,868 tonnes on 10 August to 8,360.71 tonnes on 5 October.

The production of pulses has continued to decline, from 27.3 million tonnes in FY22 to 26 million tonnes in FY23, and 24.5 million tonnes in FY24, according to agriculture ministry data.

According to the data, over the last 5 years, the most that India has produced was 27.3 million tonnes, which was in FY22. The lowest, 23 million tonnes, came in FY20.

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According to the ministry data, pulse imports have increased significantly in recent years, up 44% in CY2023 to 2.99 million tonnes from 2.07 million tonnes in CY2022.

India imports tur from Mozambique, Tanzania, Malawi, and Myanmar; urad from Myanmar and Brazil; and masur from Canada, Australia, Russia, and Türkiye.

Queries emailed to spokespersons of Reliance Retail and CEO of the Retailers Association of India (RAI) remained unanswered till press time.