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Business News/ News / India/  ‘Centre will step in if traders hoard pulses and prices rise’

New Delhi: The government expects traders in pulses and other key food items to refrain from any behaviour that could lead to an artificial market scarcity and stoke fears of shortage, consumer affairs secretary Rohit Kumar Singh said, warning of strong government intervention if markets do not behave.

The statement comes against the backdrop of attempts by some market players to hold back stocks of tur, a key kharif pulse, which has been in short supply following crop damage because of unseasonal rain last October.

The official could also be speaking with an eye on next year’s tur crop which could suffer if the weatherman’s El Nino predictions come true. Tur makes up 13% of the domestic pulse basket.

Singh also said the price of tur—also called arhar or pigeon pea—has stabilized after the government cracked the whip on traders, mandating stock disclosures. At present, the government has comfortable stocks, he said.

“We believe mostly in self-regulation and do not want to interfere in the market unnecessarily, but if some entities try to game the system, indulge in speculation and resort to unfair practices, harming consumer interest, then we take action which is a deterrent to others," Singh said.

“This is applicable to tur traders also."

Importers have been hoarding pulses in Myanmar and booking profit amid a price rise, rather than shipping them to India, Mint reported on 20 April, quoting two government officials.

Prices of pulses, especially tur, started declining after the department of consumer affairs on 27 March formed a committee to monitor tur stocks held by importers, millers, stockists and traders in coordination with state governments. Since the intervention, prices of wholesale tur have declined nearly 3% to 8,700 a quintal (as of 24 April) in Maharashtra’s Akola, according to the agriculture ministry’s Agmarknet.

Prices of wholesale mill-quality tur had jumped by 12.1% in January-March, as per Agmarknet, prompting the government move to mandate stock disclosure. “There is no need to panic at all. We have comfortable stocks, some in excess," Singh said.

“Public resources are precious, and we do not want to send a wrong signal to the market procuring at unnecessarily high price. We are not putting stock limit... if the situation warrants, we can do that, but that situation is not there now. We want them to not unnecessarily jack up the prices...We want markets to behave."

This government is closely monitoring stock disclosures of tur and urad to ensure that there is no hoarding.

The Centre’s intervention has led to higher disclosure of tur stocks by more entities. As of 21 April, 14,265 importers, traders, millers and stockists have disclosed 507,303 tonnes of tur in their stocks against 96,593 tonnes by 12,850 stakeholders a month ago, Singh said.

Singh sees tur production in 2022-23 (July-June) coming in at 3.4 million tonnes (MT) against around 3.7 MT projected by the agriculture ministry in its second advance estimates. However, the industry expects output to be lower at 2.7-2.8 MT for the year because torrential rains in October may have damaged standing tur crops in Maharashtra.

“Though the output could be a little less, there is no need to panic now," said Singh, adding “The Centre has comfortable stocks of over 150,000 tonne of tur."

The Centre has a total of 3.7 MT pulses in its stock.Domestic demand of 4.0-4.2 MT is seen to be met by imports from Myanmar and East African countries, which are expected to be 1.0-1.1 MT this year, against typical 750,000-800,000 tonnes. In the last financial year ended March, imports of tur were 5% lower on year at 784,191 tonnes and urad imports declined 21% to 487,726 tonnes. The government is also sharpening its data collection methods to further target its interventions.

Puja Das
Puja Das is a New Delhi based policy reporter covering food, farm, fertiliser, water, and climate policies for Mint. Puja reports on farmers' distress and how the agriculture sector is impacting India's rural economy and policy initiatives to help meet the pledges made at COP27. Puja holds a post-graduation degree in Broadcast Journalism from the Indian Institute of Journalism & New Media, Bangalore.
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Updated: 30 Apr 2023, 11:43 PM IST
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