Wholesale Urad prices have increased by roughly 20% in the last month due to lower domestic production and supply issues in key export markets. The price hike reflects a widening demand-supply gap and uncertainty regarding kharif sowing caused by rainfall patterns. Investors should monitor how these food inflation trends impact FMCG company margins and future government import policies.
Urad (black matpe) prices have witnessed a sharp rise of approximately 20% in the past month across Indian wholesale markets. This upward movement is driven by a combination of tight domestic inventory and climate-related concerns affecting production both within India and in key supplying nations.
Domestic Sowing and Production Challenges
The domestic supply situation remains tight following a decline in production during the 2025-26 season, which dropped to 21.60 lakh tonnes from 22.42 lakh tonnes in the previous year. Current data for the ongoing kharif season as of July 17 shows urad sowing at 13.51 lakh hectares, marking a 6% decline compared to the same period last year. This reduction in acreage, combined with a 15-20% yield loss in Andhra Pradesh’s rabi crop, has led to a depletion of available stocks. Market participants are reporting that previous rabi supplies were absorbed quickly by northern states, leaving little buffer in the current inventory levels.
Global Supply Pressures and Import Costs
India is not alone in facing crop difficulties, as major producers like Myanmar and Brazil are also reporting reduced yields due to adverse weather and disease. Trade reports indicate that Myanmar’s production may drop to 7 lakh tonnes from its usual 1 million tonnes, partly due to the yellow mosaic virus. Consequently, the cost of imported urad has risen significantly. Chennai-based import prices for fair average quality black matpe from Myanmar have reached $935 per tonne, compared to $825 just one month ago. For superior quality, prices have moved from $905 to $1,030 per tonne in the same period. The situation is further aggravated by a weaker Indian rupee, which effectively increases the cost of these essential imports for domestic traders.
Impact on Market Sentiment
Traders are maintaining a cautious approach, with many avoiding the accumulation of large inventories due to past financial losses. While the El Nino phenomenon has been a point of discussion, it has not yet led to speculative stockholding. For investors, the primary concern remains the potential impact of these rising costs on the margins of food processing and FMCG companies. If pulses remain expensive, companies may face pressure to either absorb the higher input costs or pass them on to consumers, which could affect overall demand. The next significant updates for the market will be the progress of rainfall and kharif sowing numbers, as well as any potential government intervention through changes in import duties or stockholding limits to control food price inflation.