Centre allows import of pulses despite farmers sitting on huge stocks

1.5 million quintals of tur to be imported under MoU between India and Mozambique, even as farmers hold 4 times more

In what appears to be another instance of farmers’ interests being hurt for no fault of their own. And this time, too, it's pulses. 

The year 2016-17 was a crisis year for pulses, with prices skyrocketing past the Rs 100-150 per kg mark amid crop failure.

In the following years, farmers significantly increased the area under pulses. During the crisis year, India signed an MoU to import 3.75 million quintal of pulses in 3 years from Mozambique.

But farmers are now paying a price for this because the government allowed the import of 1.5 million quintals of tur dal last week. Farmers are holding a stock of nearly 6 million quintal with them, as prices have fallen far below the minimum support price. To add to the pain, another 10 million quintal tur is estimated to be with various government agencies.

India's pulse import in 2018-19 is likely to be in the ballpark of $1.5 billion, which is much lower than 2016-17 ($4.2 billion, 6.6 million tons) and 2017-18($2.9 bn, 5.5 million tons), declining in step with falling prices.

Prime Minister Narendra Modi went to Mozambique in July 2016 when pulse prices in India went through the roof. He signed an MoU with the country to import tur and other pulses for three financial years starting from 2016-17 (100,000 tons), through 2017-18 (125,000 tons) and (150,000 tons) in 2018-19. Last Tuesday, DGFT announced an import quota of 150,000 tons of tur (other pulses) from Mozambique.

Devendra Vora of Navi Mumbai-based Friendship Traders said, “Releasing import quota for import from Mozambique at this time will only hurt farmers’ interest going by the market scenario of the pulses.”

Currently, the desi variety of tur is selling at Rs 38-42 per kg in various mandis, lower than the MSP of Rs 54 per kg. The cost of importing pulses from Mozambique is around Rs 28-30 per kg which makes it quite viable. 

Two weeks before opening the quota of importing 150,000 tons of tur from Mozambique, the government had mandated limits for importing tur (200,000 tons), Mung and urad (1,50,000 tons each) for 2018-19. India’s tur crop was at 4.87 million tons in 2016-17 and is estimated to be 4.18 million tons in 2017-18. Tur is a kharif crop, and Maharashtra and Karnataka are among its major producers. 

Now, an additional quota of 150,000 tons has raised worries. That this is happening before the sowing of kharif only adds to the woes of farmers. Pradeep Jindal, proprietor of Delhi based Jindal Overseas Corporation, a pulses importing company said, “Government has allowed tur import up to 2,00,000 tons this year under restricted import mode. Import from Mozambique should be treated as part of the quota.”

At present, Tur stock with various government agencies is estimated at around a million tons, and with farmers around 500,000-600,000 tons. Import from Mozambique will only add to this glut.

Bimal Kothari, Vice president of the Indian Pulses and Grains Association said, “We have written to the government to not open import quota now, but do so when prices have increased, which is expected during festival times. Allowing import during that period will have price stabilising impact, instead of the price-depressing impact, which is the case now.”