The Hindu Business Line : Zero duty on pulses to continue for another year

New Delhi, March 18 The Centre, on Wednesday, extended the imports of pulses at zero Customs duty by one more year, while extending the ban on their exports, barring chickpeas (or Kabuli chana) for a similar period till March 31 next year to help improve domestic supply.

“The decision is to extend zero duty on import of pulses for one more year beyond March 31, 2009,” Mr P. Chidambaram, Union Home Minister, told presspersons after a Cabinet meeting here on Wednesday.

Poll compulsions?

The pulses trade hailed the decision to extend the duty-free import regime but felt the ban on exports would have been lifted but for the elections.

“We welcome the Government’s decision to extend the facility to import at zero duty. But it could have lifted the ban on exports,” said Mr K.C. Bharatiya, President of the Pulses Importers’ Association. “There will be no problem with supply and this will ensure that prices remain at current levels,” he said.

A pulses trader said the Centre should have lifted the ban since countries such as Sri Lanka and Myanmar were exploiting India’s absence in the global pulses market. “These countries are setting up manufacturing base in Dubai and filling in the gap left by India,” he said.

“Our exports are insignificant compared with our total production and most of the shipments go only to South-East Asia. The Government should have allowed exports,” said Mr B. Krishnamurthy, Secretary of Tamil Nadu Pulses Importers and Exporters Association.

Before the Government banned pulses export in June 2006 to keep surging prices and inflation under control, annual exports of pulses were around one lakh tonnes. This is against the annual production of around 14 million tonnes (mt). However, last year the output was a record 15.2 mt.

“Importers have been hit badly by sharp fall in prices after they had contracted consignments and depreciation in the rupee. At least, the Government could have allowed exports of pulses that are imported for milling,” Mr Krishnamurthy said.

This season ending June, kharif output has been pegged lower for pulses at 4.72 mt against last year’s 6.45 mt. On the other hand, area under rabi pulses has increased to 141.70 lakh hectares against 133.19 lakh hectares last year.

Prices in the market, too, reflect fall in kharif production. For example, in Hyderabad, moong is currently quoted at Rs 4,150 a quintal against Rs 2,250 during the same period. Similarly, tur is quoted up at Rs 3,450 (Rs 2,450), urad at Rs 3,125 (Rs 2,550), while chana is quoted steady at Rs 2,300-400.

“Chana production (grown during rabi) is likely to be lower but there should be no problem of rise in prices since yellow peas can be good substitute for it,” Mr Bharatiya said.

However, the pulses trader said the chana crop was excellent though there were reports of rains in Rajasthan affecting the crop.

“Green moong has been affected due to dry weather in Andhra Pradesh and Karnataka,” he said.

“There will some short-supply of tur due to dry weather in Andhra Pradesh. Urad will also be lower since farmers in Andhra Pradesh have shifted to maize,” Mr Krishnamurthy said. “The urad crop is also suffering from infestations,” he said.

Edible oil exports ban

In Wednesday’s meeting, the Union Cabinet also decided to extend the scheme for supply of imported pulses through the public distribution system till September 30. The Cabinet also decided to allow State-run trading firms to import 1.5 mt of pulses under the reimbursement scheme.

Meanwhile, the Directorate-General of Foreign Trade on Tuesday evening extended the existing ban on export of edible oil up to March 16, 2010. This has been done to keep the domestic prices of essential edible oils from flaring up.

(With inputs from Our Chennai Bureau)

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