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| Stronger rupee to soften domestic pulses market |
| Chandan Kishore Kant / Mumbai May 20, 2009, 00:37 IST |
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The appreciation of the rupee against the dollar is likely to make import of pulses cheaper, softening the domestic prices. According to traders, importers and commodity analysts, the rupee is likely to strengthen further, and decline in prices will be visible in 4-6 weeks.
Compared to the domestic production of 14-15 million tonnes of pulses, imports stand at 3 million tonnes. Though they play a vital role as production in the country has long been stagnant.
KC Bhartiya, president of the Pulses Importers Association said, “There will be a favourable impact of the rupee appreciation on the pulses market in the country. The importers will be encouraged to import more quantity as there is a parity. This will result in decline in the domestic prices.”
| LOW PULSE RATE |
| Pulses |
Import Rate (Rs/tonne) |
Decline in
rates
(Rs/tonne)
|
| $ at 50 |
$ at 47 |
| Tur |
40,250 |
37,835 |
2,415 |
| Masoor |
38,750 |
36,425 |
2,325 |
| Green Peas |
20,000-27,500 |
18,800-25,850 |
1,200-1,650 |
| Urad |
32,000 |
30,080 |
1,920 |
| Moong |
38,750 |
36,425 |
2,325 |
| Source : Pulses importers and traders |
Presently, the local tur and masoor spot markets are around Rs 3,800-4,000 a quintal, whereas moong is higher at around Rs 4,100 a quintal.
On the other hand, chana and urad are trading low at Rs 2,200 and Rs 3,000 a quintal, respectively.
Suresh Agarwal, chairman of Madhya Pradesh Dal Udyog Mahasangh said, “Because of a stronger rupee, the continuous surge in the domestic prices of pulses has been brought under control in May. There has not been any change in pulses rate over the last fortnight. Due to cheaper imports, domestic prices will come down naturally. The decline of around Rs 200-300 a quintal in the domestic market by next month is a possibility.” He further added that the rupee may not come below the level of 46.
Since, most of the bookings were done when the value of the rupee was at 50, traders said with the currency at 47, imports will be cheaper by Rs 1,500-2,400 a tonne.
“Because of bulk orders, even a 4 per cent appreciation can have a major difference in the cost of shipment. For instance, in case of tur, the import rate is $805 a tonne. Taking the rupee at 50 and 48, the difference in the cost will be over Rs 1,600 a tonne,” said Rahul Vohra, an Indore-based trader.
SP Goenka, a Mumbai-based pulses importer said, “Currently, there is a shortage of tur, masoor and moong in the country. Benefits of rupee appreciation will not be immediate as the booked shipment takes around a month to land.” However, he cautioned that pulses’ exporters tend to increase their prices in case demand pours in.
“India is an important market for the pulses exporting nations. Any fluctuation in demand here, impacts the global rates,” he added.
The country imports pulses from countries which include Australia, Canada, Tanzania and Myanmar.
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