Informist, Wednesday, Jan. 29, 2025

By Shreya Shetty

MUMBAI – The government is likely to extend duty-free imports of urad beyond Mar. 31, but may not do so in the case of chana and yellow peas, market participants said. Import duty on chana and yellow peas may be brought back due to their excessive imports, a downtrend in prices, and to protect the interests of farmers, analysts and traders said. They are divided on the continuation of duty-free imports of masur.

In May, the duty exemption for import of chana, tur, urad, and masur was extended to Mar. 31. Similarly, on Dec. 4, the duty-free import of yellow peas was extended to Feb. 28.

On Jan. 21, the government extended the duty-free import of tur by another year, till Mar. 31, 2026. With the deadline for duty-free import of other pulses drawing near, analysts and traders expect the government to take different approaches for each variety of pulses.

YELLOW PEAS

"Within four months of the government lifting the 50% duty on imports in December 2023, India had already imported 1.17 million tonnes of yellow peas," said G. Chandrashekhar, a commodity expert and policy commentator.

In Apr-Nov, the country imported 1.57 million tonnes of yellow peas, according to data from the Ministry of Commerce and Industry. "In Dec-Jan, due to the fear of the government ending the free import policy, imports could have increased," Chandrashekhar said.

Of these imports, nearly 1.50 million tonnes are still lying at the country's ports, said Deepak Pareek, founder of Global Grains and Pulses Council. Explaining the high imports of yellow peas, Pareek said, "The demand (for yellow peas) stems from the fact that it is the cheapest alternative to any pulse, that's all." Yellow peas are mainly used as a cheaper alternative to chana and tur.

"If free imports are extended, prices of yellow peas will drop to INR 28-INR 30 per kg, which is really bad for domestic pulse farmers," Pareek said. Currently, prices of yellow peas range between INR 3,250 and INR 3,500 per 100 kg.

However, Rahul Chauhan, director of IGrain, thinks the government will extend duty-free import of yellow peas to increase its availability and control high prices of the commodity.

CHANA

Duty-free imports of chana, too, may not be extended beyond Mar. 31. "We already have a big crop coming from Australia before Mar. 31, and arrivals of the country's rabi chana will begin as well," Pareek said.

In Apr-Nov, chana imports from Australia were the highest among all sources at 120,341.88 tonnes, according to data from the ministry. The jump in numbers was due to a much bigger chana crop in Australia, prompted by demand from India, the India Pulses and Grains Association said in a report.

Meanwhile, as of Monday, the area under chana was 9.86 million hectares, up 2.8% from last year. Arrivals of the new rabi chana have begun in Kalaburagi, Karnataka, while small arrivals have also begun in Maharashtra.

Wholesale prices of chana have been on the decline due to imports, and are currently nearing the minimum support price of INR 5,650 per 100 kg. Prices of chana in Akola, Maharashtra, were INR 5,950-INR 6,000 per 100 kg on Tuesday.

If imports continue, prices are seen slipping below the minimum support price, hurting domestic farmers. "The government wants farmers to get reasonable prices for their rabi chana crop in Mar-April," Chandrashekhar said.

If supply exceeds demand, the government may come under pressure to procure chana from farmers at the minimum support price. However, analysts said the government does not have the capability of procuring and storing large quantities of chana. "The National Agricultural Cooperative Marketing Federation of India and other government agencies do not want procurement pressure," Chandrashekhar said.

"We are not importing chana, it is being dumped in India by other countries," said Devendra Vora, a Mumbai-based trader. "So they (the government) will definitely impose a duty, or ban the imports of chana altogether," he said.

URAD

In the case of urad, analysts expect the government to extend duty-free imports by at least another year.

"The country is very dependent on countries such as Myanmar for the pulse," Pareek said. "By the end of 2024-25 (Apr-Mar), India's imports of Myanmar urad are likely to cross 600,000 tonnes," he said. Urad imports from Myanmar in Apr-Nov were the highest among all sources, at 479,357.95 tonnes, according to data from the ministry.

Pareek said lifting the free imports could be beneficial to India as Myanmar has been manipulating urad prices, since it is the top exporter of the commodity. "But we are too dependent on imports," he said.

"The urad market is not as sensitive as that of chana and tur," Chandrashekhar said. "There will not be much impact on domestic prices and availability if imports continue," he said.

MASUR

Chandrasekhar believes duty-free imports of masur are likely to continue beyond Mar. 31. "The government has allowed free imports of masur since 2021, so I do not see any reason for lifting the policy currently," he said. The import duty of 10% on masur was done away with in June 2021.

"The domestic production of masur is not as much – it is mostly grown in only Madhya Pradesh and Uttar Pradesh," Vora said, adding that masur imports are needed.

Pareek, however, doesn't expect free imports of masur to be extended. Prices of masur have fallen below the minimum support price of INR 6,700 per 100 kg and if free imports continue, they could drop drastically and Indian farmers would never sow masur again, he said. Prices in the benchmark market of Indore were INR 6,000-INR 6,050 per 100 kg as of Tuesday.

"Also, the government has a lot of masur stocks," Pareek said. It is the only variety of pulses of which the country really has any buffer, he said. "The Centre has nearly 800,000 tonnes of masur, which they have been procuring since 2022," he said. End

Edited by Avishek Dutta

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