The Hindu Business Line : Pulses importers upset

Swift reaction
Across the board, the rates for various pulses declined.
The good times on the price front may not last long.
The market is likely to absorb about half of the savings on duty.

Mumbai , June 11

The withdrawal of 10 per cent basic customs duty on imported pulses is of course good news for both traders and consumers. The Government did on June 8 what it ought to have done several months ago. In the meanwhile, speculators have had a field day.

The reaction in the market has been swift since the withdrawal of the fiscal impost. Across the board, the rates for various pulses declined.

While pigeon pea (tur/arhar) and black matpe (urad) rates are weakening, gram (chana) is unlikely to show the same level of softness. However, the good times on the price front may not last long. The market is likely to, at best, absorb about half of the savings on duty.

Overseas suppliers have already begun to reconsider their export prices. A rush of enquiries from India since June 8 has sent clear price signals to suppliers.

Weakening rupee too will be a factor to reckon with. Importantly, behaviour of southwest monsoon over the next four months would be crucial.

Clarity needed

Meanwhile, importers are concerned about ambiguities in the notification.

Zero duty will be applicable only when pulses are imported through customs ports that have capacity to handle bulk imports. The trade in general is unsure about all the ports that have bulk handling facilities.

It is of course well known that ports such as Mumbai, JNPT, Kandla and Chennai do have bulk handling facilities. But what about other ports? It would have been most appropriate for the Government to have spelt out names of ports through which imports would be allowed or barred. It is necessary to clarify the position.

Package confusion

Also, pulses are brought into the country in different forms - bagged cargo in containers; loose cargo in containers; and break bulk.

More than 50 per cent of the imports take place in containers and break bulk.

The Pulses Importers Association of India has represented to the Ministry of Finance to issue a clarification that all consignments of pulses (in various conditions of packaging or shipment) are exempted from customs duty.

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