Govt considers raising import duty on pulses

The government is studying a proposal to raise the import duty on pulses, but hasn't reached at any final conclusion. Bumper output this season has led to a slide in prices.

A large part of annual demand is met by import, as domestic output has never sufficed. Since January, the estimated import is 700,000 to 800,000 tonnes.

A recent meeting of central ministers on a related issue saw a suggestion to raise the import duty, to bolster prices for farmers, to avoid an adverse impact on sowing for the next kharif.  

Pulses’ importers say they have yet to be consulted. Earlier, they’d suggested more flexible stock limits, tightened when prices were rising. 

Now, however, it appears most of the pulses grown in the kharif are trading below their respective minimum support prices (MSPs) at several wholesale markets across the country. 

“The government should not look at a short-term measure for controlling supply through levying of import duty. In fact, yellow peas remained in short supply by a wide margin — production is estimated at 60,000 tonnes, as against three million tonnes of annual consumption. The difference needs to be bridged through import. Levying an import duty on all pulses would be a dampener for consumers,” said Bimal Kothari, vice-chairman of the Indian Pulses and Grain Association, and managing director of Pancham International, an importing entity. “Supply of tur (pigeon pea), moong (green gram) and masur (red gram) is in abundance. The government should allow their export for farmers to get better realisation; their prices are currently below MSP.”

India does not have a large urad (black gram) crop and its price has risen to trade at Rs 60 a kg now, from Rs 50 a kg only a fortnight earlier.

The government lacks warehousing space of its own to stock pulses and so, private players are doing so for release in the lean season, said Kothari. Therefore, “the government must remove the stock limits on pulses”, he added.

Pricing Pressure:

* Farmers haven't been getting even the minimum support price for pulses, while imports have continued unabated 

* This issue first came up in an inter-ministerial meeting; it was suggested to increase import duty so domestically available pulses fetch better prices

* The agriculture ministry has asked the issue be taken up with the finance ministry, after a due consultations  

* Traders say the duty should be selective; they also want higher stock limits and permission to export

* Since January, an estimated 700,000-800,000 tonnes of pulses have been imported this year

* Importers are staying away from entering into new import contracts due to abundance of local supplies