Pulses import fall in India creates ripples
Pulses imports to India, the worlds biggest buyer, may fall to their lowest in nearly two decades after the government raised import taxes and restricted overseas purchases to bolster prices, impacting the plans of its global suppliers
​Mumbai: Pulses imports to India, the world’s biggest buyer, may fall to their lowest in nearly two decades after the government raised import taxes and restricted overseas purchases to bolster prices, impacting the plans of its global suppliers.
The reduction in imports illustrates the government’s steps to raise the prices of pulses, like peas and lentils, to reduce the payouts to farmers under its food subsidy scheme. Farmers in Canada, Australia and Russia that rely on Indian demand will likely intensify their cutbacks in pulses cultivation and continue to seek other markets in response to the curbs.
India’s pulses imports could fall nearly 80 per cent to 1.2 million tonnes during the financial year of 2018/19 that started in April, the lowest since 2000/01, Bimal Kothari, Vice Chairman, Indian Pulses and Grains Association, told Reuters. “Quantitative restrictions and higher import tax are effectively restricting inflows from overseas,” Kothari said.
India has raised the import tax on some pulses to as high as 50 per cent and fixed quotas for others like yellow peas, green gram and chickpeas. The country imported 5.68 million tonnes of pulses worth $3 billion in the 2017/18 financial year, down 15 per cent from a year ago, but up from just 3,50,000 tonnes in 2000/01, according to data from the Ministry of Commerce and Industry.
Pulses imports have surged at the same time local production climbed. India produced 24.51 million tonnes of pulses in the 2017/18 crop year that ended in June, nearly double from a decade ago. The oversupply caused prices to drop with yellow peas, which make up more than one-third of India’s pulses imports, falling to $285 per tonne on a cost and freight basis currently from $330 a year ago and $475 in 2016, said three pulses dealers.
In local markets, pulses are trading as much as 30 percent below the government-fixed minimum support price (MSP), forcing the government to procure them from farmers, said Nitin Kalantri, a pulses miller in the state of Maharashtra, India’s biggest producer of summer-sown pulses. “By arresting imports the government is trying to lift prices near MSP level. It will help in minimising expensive government purchases,” Kalantri said.
India does not break down spending on individual crops but food subsidy spending for all crops for the 2018/19 financial year will be 1.69 trillion rupees ($24.65 billion). The government’s priority is to dispose of pulses stockpiles bought last year, which is not possible if cheaper imports continue, said a government official, who asked to remain unidentified because they are not allowed to speak to the media.
Government agencies bought about 2 million tonnes of pulses last year, said the official, adding “we need space to buy new season crop.” Record Indian pulses imports of 6.6 million tonnes in the 2016/17 financial year prompted Canadian and Australian farmers to expand their pulses cultivation but the contraction in imports in the past year has reversed that.
By: Rajendra Jadhav
