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Informist, Tuesday, Jun. 3, 2025

 

By Shreya Shetty and Pallavi Singhal

 

MUMBAI/NEW DELHI – The decision to extend duty-free import of yellow peas till Mar. 31 has dimmed the outlook for chana prices till then, market participants and traders say. "The chana market is completely washed out, and I do not see any upward movement in prices," said Kailash Kakani, a trader from Indore. 

 

Yellow pea is mostly used by companies and retailers to mix into besan and as replacement for chana in other food products to cut production costs. "At this point, 50% of all chana products will be mixed with yellow peas for cost-cutting," Kakani said.

 

Agricultural economist G.K. Sood. agrees. "Extension of the duty-free import window has ensured that chana prices remain depressed throughout the year," he said.

However, in terms of rabi sowing of chana in the coming crop year, market participants do not see a significant impact. "I cannot say much about this (the extension) hurting sowing because it is still far off, and we have to see how the (southwest) monsoon will play out," said Satish Upadhyay, secretary of the India Pulses and Grains Association.

 

"Rabi acreage of chana may not be affected in the upcoming year as farmers have sold their crops at relatively okay prices this year, even though prices skated near the minimum support range in many markets," said Rahul Chauhan, director of IGrain.

 

The extension of duty-free import of yellow peas could have been triggered by the government's inability to meet chana procurement targets and its efforts to curb food inflation, market participants say. The move, announced on Friday, marks the latest extension since the 50% duty on yellow pea imports was lifted in December 2023, with the initial deadline of March 2024 being pushed ahead multiple times. 

 

In 2024-25 (Apr-Mar), India imported 2.16 million tonnes of yellow peas, up a steep 85% on year. Import of yellow peas, used as a cheaper alternative to chana, is the highest among all pulses. Currently, prices of yellow peas range between INR 3,375 per 100 kg and INR 3,900 per 100 kg in key spot markets across the country, making it the cheapest legume.

 

The market was expecting the government to impose 10-30% duty on yellow pea imports. Once rumours of 10% duty started doing the rounds, many were satisfied as this was expected to provide some relief to chana prices.

 

"Most of the market was expecting at least 10% duty on yellow pea imports, but the government is not in tune with the market," said Upadhyay. "In the meetings we (the association) had with the government, we had insisted on 50% duty on yellow peas as it has been hurting our farmers for a while now."

 

India needs yellow pea imports as domestic production of chana does not meet the country's consumption needs. "The desi chana crop is estimated to be about the same level as last year, which implies a demand-supply gap of about 2 million tonnes," Sood said.

 

India's total chana output in 2024-25 (Jul-Jun) is pegged at 11.3 million tonnes, against 11.0 million tonnes the previous year, according to the third advance estimate released by the government on Wednesday.

 

Procurement of chana, rather the dearth of it, is a key reason behind the extension, Upadhyay said. "First, their (the government) procurement started late, then the market prices discouraged farmers from selling to the government at the minimum support price," he said. "The government was also too occupied with soybean procurement, which shifted focus from chana purchases." 

 

The government is likely to close its chana procurement operations at 350,000 tonnes, 12.5% of the total sanctioned quantity of 2.8 million tonnes for the rabi marketing season 2025-26 (Apr-Mar), a senior government official told Informist Monday. So far, procurement stands at 297,000 tonnes, with the operations likely to continue till the end of June.

 

Procurement of chana has been slow as prices have remained above the minimum support price of INR 5,650 per 100 kg in many spot markets. On Tuesday, prices of chana in the key spot market of Indore in Madhya Pradesh were INR 5,900-INR 5,925 per 100 kg.

 

The consumer affairs ministry has been keen to rebuild its buffer of the key legume. The stock was depleted after the government failed to procure any of last season's output owing to lower production and high demand. "Seeing the current price trend, our department internally revised the procurement aim down to 1.0-1.5 million tonnes. But even that looks like a distant dream right now," a government official told Informist May 15. 

 

The extension could also be one of the government's many efforts to keep food inflation in check, according to Chauhan. India's consumer price index inflation for pulses and products for April fell to (-)5.23% from a whopping 16.84% a year ago. A downtrend in prices of all pulses had led to the decline and the government did not want to risk a rise in inflation again, Chauhan said.

 

The gap between demand and supply of chana in the country is made up by stocks of yellow peas, Sood said. India's opening stock of yellow peas for 2025-26 (Apr-Mar) stands at 1.2 million tonnes, and between March and May, the country's imports are expected to be 600,000 tonnes, bringing the total amount to nearly 2 million tonnes, Sood explained.  End

 

Edited by Avishek Dutta

 

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