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Harish Damodaran

NEW DELHI, Feb. 7

THE Centre's decision on Tuesday to completely free export of pulses has come in the face of strong resistance from the Department of Consumer Affairs (DCA).

Export of pulses was so far allowed freely only in consumer packs up to five kg. Bulk exports were, on the other hand, restricted and permitted only against issue of licence. The decision to remove the packaging restriction of five-kg consumer packs would mean that pulses could now be exported in bulk as well.

Exporters have welcomed the removal of the five-kg consumer pack requirement. "It will reduce the cost of our exports by $10-15 per tonne," said Mr Gurnam Arora, Joint Managing Director, Satnam Overseas Ltd.

The current packaging restriction, he added, was counter-productive because it was very cumbersome for the exporters to first pack in five-kg polypropylene (PP) pouches and then collectively pack these again in 40-kg gunny/PP bags for exports.

Further, international buyers, too, were reluctant to buy the pulses shipped in five-kg packs. "They do not like to sell in our five-kg consumer packs and prefer to do their own packaging. What they do now is to buy our five-kg packs and then offload it for repackaging in their own branded consumer packs. But this is a very labour-intensive exercise. Our buyers have been consistently demanding that we deliver pulses in 20 or 50-kg bags, which will bring down their handling costs," Mr Arora told Business Line.

Exporters also claim that pulses packed in five-kg PP bags tend to suffer quality deterioration during transit. The PP packs do not allow any air in or enable evaporation of the moisture present in the freshly milled dal. As a result, the grains become mouldy and lumpy, leading to rejection of consignments.

Pulses exports have gone up significantly in recent years, from a mere 61,000 tonnes in 1995-96 and 55,000 tonnes in 1996-97 to 1.71 lakh tonnes in 1997-98 and 1.04 lakh tonnes in 1998-99. The last two years have seen a substantial jump, with 1.94 lakh tonnes being exported (valued at Rs 419.56 crore) in 1999-2000 and a record 2.43-lakh tonnes (Rs 537.1 crore) in 2000-01.

While the exporters, supported by the Commerce Ministry, have been lobbying for abolishing the five-kg pack restriction, the DCA was, however, opposed to the move. The Commerce Ministry's main point was that placing curbs on export of pulses did not make sense, when imports were freely permitted on payment of a nominal five per cent customs duty.

But the DCA's contention was that there was a serious domestic availability problem in pulses due to stagnant production. Last year, output hit a 13-year-low of 11.06 million tonnes. And unlike other deficit commodities such as edible oils, the import option for bridging the domestic demand-supply gap in pulses was limited, considering that India accounted for over a quarter of the world's production and world trade in pulses was negligible.

The country imported 2.51 lakh tonnes of pulses (valued at Rs 354.69 crore) in 1999-2000 and 3.48 lakh tonnes (Rs 493.79 crore) in 2000-01. These imports - mainly from Canada, Australia and Myanmar - were, however, not sufficient to cater to domestic demand. Freeing exports completely, on top of this, would affect the country's nutritional security, especially since daily per capita domestic availability of pulses had fallen to around 31 grams now, as against recommended minimum intake of 50 grams, the DCA pointed out.

According to sources, the Cabinet's decision to free exports completely was eventually taken on the expectation of a recovery in pulses production this year. During 2001-02, output is projected to cross the 15-million tonne mark for the first time.

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