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Informist, Wednesday, Jun. 4, 2025

 

 

--Govt source: Won't procure chana at mkt price via Price Stabilisation Fund

--CONTEXT: Govt has been procuring chana at MSP under Price Support Scheme

--Govt source: Aggressive intervention not needed as inflation low

--Govt source: See chana buys at MSP rising on yellow peas duty-free imports

 

By Pallavi Singhal

 

NEW DELHI – The government is unlikely to use the Price Stabilisation Fund to procure chana at the market prices and will continue to buy it at minimum support price till the end of June, a senior government official said. The government is hopeful of a rise in chana procurement in coming weeks after it extended the waiver on import duty of yellow peas till Mar. 31, the official said. 

 

The latest extension, announced on Friday, marks the third time the deadline has been pushed back since the 50% duty on yellow pea imports was first lifted in December 2023. Yellow pea is often used as a substitute for chana in food products to reduce production costs. "We will be satisfied if we even get 500,000 tonnes or less. Government is not looking at any aggressive intervention since prices have been manageable and inflation has been low on account of duty-free imports of key pulses," the official said. 

 

 

Chana pices in Akola, Maharashtra, were at INR 5,700-INR 5,750 per 100 kg. Prices have been steady in the lower range after they slid by INR 150-INR 200 per 100 kg following the extension of duty-free imports of yellow peas. The market prices are slightly higher than the MSP of INR 5,650 per 100 kg. 

 

The official expects chana prices to fall due to the extension in duty waiver, which could lead to increased procurement. "This should help us raise our procurement (of chana) from Madhya Pradesh by another 100,000 tonnes to 200,000 tonnes and bring it up to 100,000 tonnes from Rajasthan, so we can reach about 450,000 tonnes," the official said. The government has so far bought 300,000 tonnes of chana including 150,000 tonnes from Gujarat, 100,000 tonnes from Madhya Pradesh, and 50,000 tonnes from Rajasthan. 

Chana is currently being procured under the central government's Price Support Scheme, designed to protect farmers from price fluctuations by providing a minimum support price for their produce. It ensures farmers receive a guaranteed price, even if market prices fall below the MSP, by procuring specific crops at the MSP. However, the Department of Consumer Affairs can intervene and buy at prevailing market prices, higher than MSP from the price stabilisation fund, to later sell it in open markets to cool down prices. 

 

The discussion becomes relevant as the government has only been able to procure around 300,000 tonnes of chana at MSP even when the consumer affairs ministry norms mandate a buffer of at least 1 million tonnes. "We do not want to unncessarily intervene in the market as it will further raise prices of the commodity. We do not want to build a buffer just for the sake of it. Our job is to keep prices low for the consumers. Entering the market to buy at prevailing prices will have an adverse effect," the official said. 

 

The government had sanctioned a high procurement amount of 2.8 million tonnes of chana on account of a robust crop outlook, as the government looked to replenish its depleted stocks. The agriculture ministry's second advance estimates peg production of chana at 11.5 million tonnes, up from 11.03 million tonnes last year. However, with prices ruling higher than the MSP, the government internally revised down the estimate to 1.0-1.5 million tonnes. 

 

India's consumer price index inflation for pulses and products for April fell to (-)5.23% from a whopping 16.84% a year ago. Imports of key legumes including tur, urad, and yellow pea remain duty-free till the end of 2025-26 (Apr-Mar). While Chana imports will attract a 10% duty during the same period, imports of masur will levy 11% import duty.  End

 

Edited by Akul Nishant Akhoury

 

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