Fearing shortage, Centre plans to procure 1 million tonnes of chana dal at market price to replenish buffer stock

New Delhi: The Centre is planning to purchase one million tonnes (mt) of chana (gram) under its price stabilization fund (PSF) at market prices or even higher to replenish its buffer, a senior official said.

Pulse stocks are falling, and the government has so far been unable to procure in desired quantities amid sticky prices.

Chana prices in wholesale markets of key producing states have shot up significantly and are hovering at ₹6,900-7,075 per quintal, well above the minimum support price of ₹5,440 a quintal, according to spot traders.

This has take up the retail price of chana 16.5% higher than the previous year at nearly ₹87.1 a kg as of Thursday, data from the consumer affairs ministry showed.

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“Procurement of chana under PSF has already been started by our two agencies (NAFED and NCCF) last month at the prevailing market rate. The procurement will be of current rabi season’s crop and from farmers, PACs (primary agricultural credit societies), cooperatives, FPOs (farmer producer organizations), FPCs (farmer producer companies), millers and private players at MAPP (minimum assured procurement price) which will be available in the Agmarknet and UPAG portals daily. In case MAPP is not possible, we have directed the procuring agencies to purchase the crop at 10% higher than MAPP,” the official said.

“We are estimating the cost of the operation could be about ₹600 crore and we have paid the amount to both agencies equally in advance to procure one million tonnes of chana,” the official added.

Inadequate buffer

The government has so far been able to purchase around 300,000 tonnes of chana, less than a third of the the buffer requirement. Overall, only 1.6 mt of pulses are available in the central pool, including 340,000 tonnes of chana, against the norm of 3.1 mt.

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Chana prices started rising in anticipation of lower production this year due to low rainfall and a prolonged dry spell last year. Acknowledging it, the agriculture ministry on Tuesday revised its estimates downwards to 11.57 mt from its February estimates of 12.1 mt. Last year, the country is estimated to have produced 12.26 mt. The government will come up with its final estimates in October.

Duty-free imports to fill gap

To bridge supply and demand gap in pulses, especially chana amid poor production of tur (pigeon pea), the government last December allowed duty-free imports of yellow peas until March 2024 and later extended it till October. Retail inflation in pulses eased to 16.8% in April from 17.8% in March, but significantly contributed to high food inflation, which was 8.7% last month, up from 8.5% a month ago and 3.8% a year ago.

India, which relies on imports to meet its domestic demand of about 28 mt for these three pulses, primarily purchases them from Australia, Canada, Russia, Myanmar, Mozambique, Tanzania, Sudan and Malawi. Despite some improvement since 2011, the gap between demand and supply of pulses is widening and has necessitated annual import of 2.5-3 mt of pulses in the past few years.

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Queries sent to the consumer affairs and agriculture departments remained unanswered at press time.