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Informist, Wednesday, Mar. 12, 2025

 

By Shreya Shetty

 

MUMBAI – Market participants are divided on the government's likely decision on duty-free imports of chana after Mar. 31. Some believe the government will extend the duty-free imports, while others are not quite sure.

 

In May, the duty exemption for import of chana, tur, urad, and masur was extended to Mar. 31. On Dec. 4, the duty-free import of yellow peas was extended to Feb. 28. The government recently extended duty-free imports of tur and urad till Mar. 31, 2026, and that of yellow peas till May 31. At the same time, it levied an import duty of 11% on masur. However, a decision on chana imports is pending.

 

According to Rahul Chauhan, director of IGrain India, tariff-free imports of chana could be extended for another year. "Yes, prices of chana may suffer if the government keeps allowing (duty) free imports of chana, but if they had cared about prices, they would not have extended the duty-free imports of yellow peas in the first place," he said.

 

Yellow peas are a cheaper substitute for chana. Imports of yellow peas during Apr-Dec were at 1.78 million tonnes, the highest among all pulses, according to data from the Ministry of Commerce and Industry.

 

Prices of chana have already dipped below or are nearing the minimum support price of INR 5,650 per 100 kg due to rising arrivals of the rabi crop across major spot markets. Prices have also been under the pressure of high imports. Chana imports in Apr-Dec stood at 360,393 tonnes, up a whopping 177% on year, according to data from the ministry.

 

On Wednesday, prices of chana in Indore, Madhya Pradesh, were at INR 5,700-INR 5,750 per 100 kg, while chana prices in Akola, Maharashtra, were INR 5,100-INR 5,500 per 100 kg.

 

"The government extended the duty-free imports of tur, urad, and yellow peas, so I don't see why they will not extend that of chana too," said Gaurav Kochar, a trader from Madhya Pradesh. "India has become a dumping ground for pulses, and we might be going down the same path as we did with edible oil- high imports, and extremely low domestic prices," he said.

 

"They (the government) might also extend the duty-free imports of chana to build a buffer," Chauhan said. Unlike last year, the government does not have any buffer stocks of chana currently, he said.

 

However, Satish Upadhyay, the secretary of India Pulses and Grains Association, believes if the Centre wanted to build a buffer, it would have focused more on procuring from domestic farmers rather than buying imported chana. "Last year, we had a carry-over stock of around 2 million tonnes," Upadhyay said. "But due to bad weather, we saw a poor crop in rabi season 2023-24, so it was all offloaded to ensure availability in the market," he said.

 

To build the buffer back up, the government should have started procuring the rabi crop as soon as arrivals began in the market in February, Upadhyay said. "Since prices fell below the minimum support level, it would have made even more sense to begin procurement, but now 20%-30% of the new crop has already been sold in the spot market," he said.

 

A shortage in storage space could be deterring the Centre from procuring the crop, Upadhyay said. State storages seem to be at capacity with grains, which is hampering pulses procurement, a government official told Informist on Wednesday.

 

"Even if they (government) want to somehow build a chana buffer, it does not make sense to extend the duty-free imports of chana because it would lower prices further, harming our farmers," Upadhyay said.

 

Chana production also looks better than last year, hence allowing more imports would not be logical, Upadhyay said. According to the agriculture ministry's second advance estimates released Monday, chana output in 2024-25 is pegged at 11.5 million tonnes, down from 12.3 million tonnes calculated in the second estimate a year ago, but up from 11 million tonnes shown in the final estimate last year.

 

"However, seeing that the duty-free imports of yellow peas was extended despite a good stock of the same in various ports, we cannot say what the government will do regarding chana imports now," Upadhyay said.

 

"The government can announce anything," said a local trader from Kota, Rajasthan. "While the overall market situation is not favourable for a further extension, they extended the tariff-free imports on yellow peas anyway, so we are not sure what will happen next," he said.  End

 

Edited by Ashish Shirke

 

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