Will India capture the ‘pulse’ of export market?

G Chandrashekhar | Updated on February 28, 2018 Published on February 28, 2018

Pressured by the domestic market conditions — large harvests, low prices over the last one year — the Centre recently lifted the prohibition on export of all varieties of pulses. A blanket ban on pulses export was imposed over ten years ago in 2007 as a knee-jerk reaction to rising domestic prices then.

In response to trade representation, one variety, Kabuli chickpea, was exempted from the ban. In recent years, Kabuli chickpea shipments averaged around two lakh tonnes (lt). Prior to total ban, India used to export respectable quantities of pulses — mainly masur (lentil) and to a less extent tur/arhar (pigeon pea), urad (black matpe) and moong (green gram).

Indian pulses were quite popular in overseas markets, especially in countries with large expatriate Indian population.

A tough fight

With India out of reckoning for ten long years, new origins have entered the world market with aggressive export plans. Myanmar and East African nations are relatively new entrants to the pulses export market and their volumes started to increase with expansion of India’s import needs. Now, it is not going to be a cakewalk for Indian pulses in the overseas markets. There is already fierce competition among various supplying countries: Canada, Australia, Russia, Ukraine, the US and others to garner a larger share of the limited export pie , especially after India imposed import restrictions. No wonder, export offer prices are dropping by the day.

Admittedly, India will find it tough to re-enter the market after a long hiatus as it will be bogged down by credibility issue. Indeed, there is a loss of confidence about the stability of the country’s trade policies. Reliability of steady supplies is in doubt.

Export surplus

Another question that arises is whether India has genuine export surplus. Despite two back-to-back bumper harvests, the country is surely not self-sufficient yet. Yet, opening up pulse export makes eminent commercial sense. While allowing import is a consumer-friendly step, any restriction on export would be anti-farmer.First, it is necessary to gain the confidence of overseas buyers. So, a commitment not to restrict export must be made by the government.

Boosting export trade

The Commerce Ministry wants farm exports to rise from the present $30 billion to $100 billion in the coming years. Pulses can make a small contribution. Dal exports have some prospects as Indian cuisine is becoming popular around the world. Dal export will also help improve capacity utilisation of dal mills and lend stability to domestic prices. Given the present supplies, price and market conditions, India can hope to export about five lakh tonnes of various varieties of dal. This calls for a strategic approach to export promotion.

Trade pacts

Importantly, we must leverage our bilateral and free trade agreements with South Asia and South-East Asia. For instance, Bangladesh imports about 12-15 lakh tons of pulses, while Sri Lanka imports roughly three lakh tons. We have SAFTA, APTA, ASEAN and other agreements involving many countries.

The Commerce Ministry must set off a dialogue with trade partners in the region and persuade them to import from India. Of course, over a period of time, India must generate genuine export surplus.

The writer is a global agri-business and commodities market specialist. Views are personal.

Published on February 28, 2018

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.