The central government may lift a decade-long ban on export of pulses in a bid to shore up domestic prices which have fallen sharply because of abundant supplies. India currently only allows export of organic pulses. “We are thinking of allowing exports of pulses…we may think of calibrated opening of exports for one or two pulses and not all,” a senior government official said. Substantial stock of pulses available with the government agencies, traders and farmers, because of a record output last year, has dragged down prices of most pulses, especially tur or arhar, in the last couple of months. Retail price of arhar dal is currently around Rs 71-72 per kg in Delhi, down from Rs 83/kg a year ago. According to the data from the agriculture ministry, the total production of pulses in 2016-17 crop year (July-June) is estimated at 22.40 MT, up from 16.35 MT in 2015-16. The arhar production rose by more than 80% to 4.6 MT from a year ago period. Even if the arhar output in 2017-18 crop year declines, there will be still sufficient stocks to curb any spike in prices.
India’s inflation rates have slowed to record lows and food prices have been falling. Wholesale inflation slowed to 0.9% in June, the lowest in a year. It was 2.17% in May. Consumer price index (CPI) — commonly referred to as retail inflation — also moderated sharply to 1.54% in June, the lowest since the index was rebased to 2012 in a new data series. India meets its pulses requirement from imports. In 2015, two consecutive years of deficient monsoon rains had hit production and arhar dal prices had touched a record high of Rs 200 a kg.
Thereafter, the government addressed this by announcing a slew of measures. It offered significantly higher minimum support prices (MSP) and bonus as an incentive to encourage farmers towards pulses cultivation. The government also announced creation of buffer stock, which it had build up via imports and domestic procurement. In March, the government imposed a 10% duty on import of tur as in many key tur producing regions, the lentil’s prices had crashed below the minimum support price of Rs 50.5/kg in the last season, forcing the government to step up procurement.
However, even with exports opening up, there will be fewer takers of Indian pulses as the country is the largest consumer. The country is banking on the demand from Indian diaspora as it frees pulses exports. “The advantage of opening up export is that we can set certain trend in the prices in the domestic market. If our export prices are better, then the domestic prices will also go up,” the official added.
Source: financialexpress.com