Govt may extend stock limit on pulses, edible oil

The government may extend stock limits on essential commodities like pulses and edible oil for one more year.

Official sources said since pulses and edible oil were both essential commodities and India depends heavily on imports for both, the stock limits might get extended to control prices and limit hoarding in the garb of bulk use. “This is especially important when production is less than sufficient to cater to the total demand and one has to import,” said a highly placed official.

Meanwhile, stock limits on sugar may be eased, owing to good harvest and production, sources said. The stock limits on all three commodities come for review by the end of this month. Imposing stock limits and monitoring these is under the purview of individual states, while the ‘in principle’ direction is given by the Centre. Stock limits are a kind of control imposed on bulk buyers of these commodities by specifying an amount per purchase to prevent hoarding.

“Pulses production is expected to touch 18-19 million tonnes (mt) in 2011-12 crop year, despite 10 per cent drop in the kharif crop and better production may result in lesser imports this time. The country is expected to import two mt of pulses in FY12 as against three mt of imports last year.

India is a net importer of edible oil, especially palm oil and soyoil. The agriculture ministry had indicated a record output for 2010-11. According to the second advance estimate, pulses output is likely to touch 16.51 mt.

Reportedly, vegetable oil imports rose for the third consecutive month in July because of low local oilseed crushing and falling palm oil prices according to data from the Solvent Extractors’ Association of India.

Imports of vegetable oil during the marketing year that began November 2010 fell during the first six months due to higher local oilseeds production, but the trend has reversed in the past three months, as domestic supplies have thinned.

Palm oil constitutes nearly 80 per cent of vegetable oil demand in India and India buys it mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina. Meanwhile, sugar production is estimated to be 26-26.5 mt in 2011-12, up from 24.2-24.5 mt last year. This is largely because the sugarcane crop area has increased by 4.5 per cent to 5.16 million hectares.