Pulses, oilseeds trade gets relief from stock limits in Maharashtra

However, prices are likely to rise, given the possibility of stock building by large traders

The trade in pulses and oilseeds got a breather with the removal of stock limits by the state government here. However, prices seem likely to become costlier, with the likelihood of stock building by large traders.

On a recommendation from the Centre, the government of Maharashtra on Friday removed the stock limit on oilseeds, edible oils and pulses. The earlier limit for oilseeds and pulses were 200 tonnes each in municipal limits and 80 tonnes elsewhere.

“It is good. Removal of stock limits will make the market more dynamic. Price evolution will be more transparent and efficient, with better realisation for farmers. Mills and traders will come into play to buy. When there was stock limits, farmers were restricted in sale, due to a limited number of players in the market,” said Pravin Dongre, chairman, India Pulses and Grains Association.

To maintain stock limits, investigating agencies were always on their feet, to factories and warehouses for inspections.

“Now, the real ease of doing business will come in place,” said B V Mehta, executive director of the Solvent Extractors’ Association.

The second advance estimates of pulses output was for 18.4 million tonnes in 2014-15, against 19.8 mt the previous year. India imports 3.5-4 mt annually.

During the stock limit regime, many large stockists had shifted base to neighbouring states like Gujarat, where trading was limitless. This could reverse; also, stockists, traders and exporters would be able to purchase a large quantity of oilseeds and pulses to meet export obligations.

“Exports of groundnut and sesame seed, for example, might get support,” said Suresh Ramrakhiani, chief executive at the Indian Oilseeds and Produce Export Promotion Council.

Groundnut exports have declined over the past three years, due to stricter quality norms and lower availability on sustained decline in local production. It fell 30 per cent from 832,617 tonnes in 2011-12 to 509,665 tonnes in 2013-14.

Meanwhile, prices of these commodities have risen by up to five per cent since Friday, when the limits went. For example, chana for delivery in May was quoted at Rs 4,205 a quintal on the National Commodity & Derivatives Exchange, a rise of four per cent from Rs 4041 a quintal on Friday. Mustard seed has moved up by five per cent to Rs 3,868 a quintal.