Does Trade Stabilize Food Prices Evenly During a Supply Shock? Evidence from India’s Pulses Market

Developing countries often rely on trade policy to stabilize food prices during supply disruptions, yet the spatial distribution of these benefits remains poorly understood. This paper studies India’s 2015–2016 pulses crisis, when consecutive domestic production shortfalls sharply raised pulses prices and triggered a surge in imports. We examine whether trade-based price stabilization reached domestic markets evenly or weakened with distance from major import ports. Using a district-level panel of wholesale pulses price from 2009 to 2019 and a difference-in-differences design, we show that the import surge did not provide uniform price relief. During the crisis, each additional 100 kilometers from a major import port translated into about a 1.7 percent larger increase in pulses price. A simple calibration suggests that imports lowered prices by about 11 percent near ports, but more than half of this relief had dissipated by the median district-port distance. The results suggest that while imports can moderate national price spikes, their stabilizing effects may be limited by incomplete internal market integration.