Centre imposes stock limits on pulses as prices rise
- In Reports
- 11:31 PM, Jun 21, 2024
- Myind Staff
On Friday, the Centre introduced limits on the amounts of two types of pulses – tur (pigeon pea) and chana (chickpeas) – that retail shops and traders are allowed to store, a strategy referred to as a stock-holding limit, designed to increase supply and reduce prices.
The Centre issued the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2024, detailing stock limits for wholesalers, retailers, supermarkets, millers, and importers for the two commodities.
“The imposition of stock limits on tur and chana is part of a slew of measures taken by the government to crack down on prices of essential commodities,” an official said.
The measures, effective until 30 September 2024, have been introduced due to a lower output of pulses, such as tur, caused by an uneven monsoon last year and higher prices.
Although headline consumer inflation fell to a 12-month low of 4.75% in May compared to the previous year, food prices remained high at 8.69%, driven by cereals and pulses, according to the latest official data.
Prices of the three varieties, tur (pigeon pea), urad (black matpe), and chana (chickpea), have remained stable but high throughout the year, impacting households. Inflation in pulses rose to 17.1% in May, compared to 16.8% in the previous month.
According to the order, stock limits for tur and chana will be 200 tonnes for wholesalers, five tonnes for retailers, and 200 tonnes at depots of large-chain retailers. For millers, the caps will be equivalent to the last three months of production or 25% of annual installed capacity, whichever is higher.
The steps are aimed at discouraging hoarding and increasing availability in markets. The restrictions also apply to importers, which cannot hold imported stock beyond 45 days from the date of customs clearance.
India imports up to 15% of its annual pulses demand, spending nearly $4 billion on imports in 2023-24 due to increasing domestic demand, making pulses a volatile commodity group.
Retail prices of gram stood at Rs.87.74/kg on June 13, up 17% from a year ago, while the rate for pigeon peas rose to Rs.160/kg from Rs.126 a year ago, a rise of 27%.
According to the government, tur production in the 2023-24 crop year is estimated to be at par with the previous season’s 3.3 million tonnes (mt) but the industry expects production to be 2.7-2.85 mt, falling short of the domestic consumption of around 4.2 mt. Similarly, the government pegs chana production at 11.57 mt against last year’s 12.26 mt and domestic consumption of 10 mt. However, the trade estimates chana production are lower than the government’s estimates at 8.5-8.7 mt.
In 2021, the government imposed stock limits on tur, urad (black matpe), Masur (lentil) and chana and in 2023 on tur and urad.
Shortly after the Modi government assumed office in its first term in 2014, it focused on agricultural and trade policies to increase pulse production and reduce reliance on imports. Long-term import agreements with countries like Mozambique were established to mitigate the impact of rising global commodity prices.
According to the agriculture ministry's data, a campaign to distribute improved seeds boosted pulse productivity by 34.8%, from 727 kg/hectare in 2018-19 to 980 kg/hectare in 2021-22. This resulted in a decrease in imports, although extreme weather can still damage crops and drive up prices.
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