Pigeon pea has a unique proposition compared to other members of the pulses family as it has a single consumer country in the world, India. All other pulses have multiple destinations to go but, India makes up over 90% of the world trade, despite being the by far largest producer. Indian imports have been so massive that almost all the 
produce (barring seed usage and wastage) in the four next biggest producers Mozambique, Myanmar, Malawi and Tanzania are gobbled by it. UAE, the second largest importer stands at around 15-20 kmt, gets dwarfed by Indian 
number of close to half a million tonnes.

With India being the metaphorical elephant in the room, this analysis is focussed on Indian demand in the year 2020.

In India, pigeon peas are known as arhar, toor and tur and is eaten in most parts of the country as a vital ingredient in different dishes. Mostly, it is eaten in split form, locally called dal. Exact amount of Indian consumption of pulses is a debatable topic and the market tries to focus more on the change per last year to determine the balance sheet and thus the prices.

Indian dynamics

Maharashtra accounts for almost one third of country production, while Karnataka and Madhya Pradesh together account for another one third. Consumption patterns, however, are difficult to bifurcate by region. In India, many pulses are distributed/sold from PDS system to the vulnerable sections of the society for free or at a heavily 
discounted price. There are leakages in the system and the same food ends up in the retail market for the standard prices. For pigeon peas, this makes relatively a smaller part of the total distribution.
Interestingly, in 2015, NDA riding on charismatic Modi wave lost a major provincial election in the state of Bihar, partially attributed to high price of this humble pulse, owing to smaller domestic crop. Now in 2020, state elections are on and the leaders have started convincing the masses in favour of their policies and Indian Tur crop is projected 
at 3.75 mmt. No leader would want to have a dent in their vote share for the rising price of food staple.

COVID-19 and Impact

The pandemic of coronavirus has brought unprecedented economic disruption in Indian economy and months of lockdown made livelihood difficult for a large section of society. Government has distributed grains, pulses and other essential food items, mostly for free to the poor and thus, helped increased the consumption. In the pulses segment, 
majority of distribution has been of desi chickpeas and the activity is unlikely to ramp up the pigeon peas consumption.

The likely impact of the lockdown and loss of income upon pigeon peas consumption will be negative in the medium to long term. Income loss among the populace will lead them to consume the cheapest sources of protein and with over 10 mmt of chickpeas production, chana dal is likely to fit in. Government distribution of chana dal will also lead to lesser consumption of other pulses. 

Bihar Election

For the upcoming elections in states of Bihar and West Bengal in 2020, central government will use all the tools in its arsenal to not to repeat the 2015 price spike, if any is coming. NAFED stocks will be released time to time to the mills to ensure an uninterrupted flow of pulses in the region. 

Latest measure of reduction in lentils import duty is a step in the right direction and will also check any bullish surprise for all the pulses in the country.

Supply Demand Sheet

For pulses, it is difficult to come at a consensus either on supply or demand. Markets are fragmented, government reporting is scarce and unreliable, consumption patterns change and unpredictable. A lot of pulses are grown in countries with poor data management and market sentiments prevail in deciding the 
prices. Grapevine rules more often than not in making a consensus and alleged cartels work to form those in their favours.
My numbers for India have been taken directly from government resources for production, import and export. For the consumption calculation, these have come from deliberating over relative prices and supply of different pulses over the last decade and have been forward tested in 2019 and now proposing for 2020.

Calendar Year	Production	Import	Consumtion	End Stocks
2013	3,020	374	3,300	154
2014	3,174	535	3,650	214
2015	2,810	519	3,350	193
2016	2,561	648	3,402	382
2017	4,873	479	5,734	1,494
2018	4,290	461	6,246	1,746
2019	3,320	539	5,605	855
2020	3,750	400	5,005	805

Conclusion

1. Indian demand is unlikely to increase to the levels seen in past three years.
2. Modest supply constraints will not translate to higher prices
3. NAFED will keep releasing its stocks regularly to keep the prices in check this year, efficiently for pigeon peas.
4. The prices are to remain below MSP for the better part of the year. 

Data Sources 

•  Ministry of agriculture, India 
•  Directorate General of Commercial Intelligence & 
  Statistics, India
• FAOSTAT
  COMTRADE