Commodities

Soyabean, pulses shipments stuck in E. Africa

Subramani Ra Mancombu Chennai | Updated on July 03, 2021

The other problem that importers face is the cost of hiring a container to get the consignments   -  The Hindu

Importers may form a group to charter vessels to overcome container shortage

About one lakh tonnes of soyabean and pulses set to be imported into India have got held up in East Africa due to non-availability of containers.

According to two trade sources, soyabean makes up nearly 70,000 tonnes of the consignments stuck in Africa with higher costs of freight adding to the importers’ woes.

No way out

The pulses, all from the crop being harvested currently comprise mainly pigeon pea (arhar or tur) and lentils (moong or green gram), have been contracted for imports but are struck as importers are not able to find a way to get it into India.

“Containers are simply not available. Even if they are available, we face uncertainty as to when they will load our consignments” said a Mumbai-based trader.

The other problem that importers face is the cost of hiring a container to get the consignments. “Currently, we pay $60 a tonne for the container. This is almost thrice the $20-25 we used to pay earlier,” the Mumbai based trader said.

Limited window

Importers need to bring in the pulses consignment quickly since they have a limited window only. On May 15 this year, the Centre allowed import of pulses without any curbs as part of its efforts to tame surging prices and control inflation.

The curbs are, however, off only for four months. Importers have time till October 31 to strike new deals and a deadline of November 30 to bring in the contracted consignments.

The Centre decided to remove quantitative restrictions on import of pulses after their prices surged causing concern to consumers. In the case of pigeon pea, prices in the earlier part of this year ruled 10-12 per cent above the minimum support price (MSP) of ₹6,000 a quintal and five per cent over the MSP of ₹7,196. For the current season that began on Thursday to June 30, 2022, the Centre has fixed the MSP for pigeon pea at ₹6,300 and for mung at ₹7,275 for moong.

Importers are bringing in soyabean from African countries such as Tanzania and Mozambique.

Non-GMO soyabean

According to BV Mehta, Executive Director, Solvent Extractors Association of India (SEA), India allows import of limited quantities of soyabean from African countries such as Benin and Tanzania. “Soyabean grown in these nations are non genetically-modified ones. Soyabean attracts a 30 per cent import duty but shipments from African countries are allowed duty-free.” he said.

The African countries are treated as least developed nations in trade and hence, imports from these nations are not levied any duty as per India’s commitments made to the World Trade Organisation. (WTO).

Additional levy

A Delhi-based trader said that soyabean from African countries was offered at $860-875 a tonne cost and freight. “The issue is we are charged more than ₹75.50 to the dollar by these freight companies. On top of this, they are charging an additional $300 a tonne for every 20-foot container that is loaded over 21 tonnes,” he said.

Earlier, shippers were allowed to load 26-27 tonnes in the container.

In view of the uncertainties, the Delhi-based trader said that the importers were trying to form a consortium or group to charter ships to bring these consignments from Africa to India.

“We are looking at bringing the consignments in break bulk vessels,” the Mumbai-based trader said.

S Chandrasekaran, a Delhi-based trade analyst, said that freight charges were abnormal currently and break bulk vessels could be one solution.

“But China seems to have chartered many vessels until 2022-23, the same problem we see in the container,” he said, adding that the quarantine period for shipping crew during the current Coronavirus pandemic was adding to the problems of the export-import trade.

Published on July 02, 2021

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