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Business News/ News / India/  India may extend duty-free imports of yellow pea till May to maintain affordability and availability domestically

India may extend duty-free imports of yellow pea till May to maintain affordability and availability domestically

The move aims to stabilize pulse prices amid concerns over tur and chana crops. Officials aim to balance supply and demand, avoiding market disruptions.

An import duty of 50% on yellow peas was first introduced in November 2017. Premium
An import duty of 50% on yellow peas was first introduced in November 2017.

India is considering allowing duty-free imports of yellow peas for another month, until May, to drive down prices while bridging the demand-supply gap  tur (pigeon pea) and chana (gram), two officials said.

The move likely is due to a drop in tur crop production and expectations of low yields for chana because of a decline in acreage and productivity.

"We are already facing tur production fall. Chana is also raising concerns in terms of output. Though fresh chana has started coming into the market, the quantum is low. The supply is expected to increase this month. Until the arrival hits the peak and the picture is clear, we are considering extending duty-free imports of yellow peas. However, for the time being, it may be extended only by a month," one of the officials cited above said.

“We must consider our requirement for yellow pea in the context of chana and other pulses and availability in the international market. You extend the duty-free import but if there’s no availability, then what’s the point? The idea is to bridge the gap between supply and demand," the other official said when asked the rationale behind extending duty-free imports of yellow pea by another month.

Additionally, “a wrong message should not be implied to the market. If duty-free imports are open for too long; for example, if we extend the duty-free imports for six months, traders will purchase and stock it. Our purpose will not be fulfilled if they don’t bring it to the domestic market. On top of it, this disturbs the natural flow of the market. If the extension is for a short period, they will increase the supply flow in the given timeline," the official explained.

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

An import duty of 50% on yellow peas was first introduced in November 2017. However, as pluse prices rose, the Centre in early December 2023 allowed duty-free imports until March 2024 and later extended it till April. Retail inflation in pulses was 18.48% in February, up from 16.06% in January, and has significantly contributed to high food inflation.

According to the second advance estimate by the agriculture ministry, the production of gram or chana crop is estimated at 12.1 million tonnes (mt), marginally lower than the previous year’s production. The estimate on tur for the current season has been lowered to 3.33 mt from the October estimate of 3.42 mt, but it's on par with the previous year’s output.

According to both officials and industry players, significant import of yellow peas could see chana and tur dal prices stabilize amid the anticipated shortfall in the supply of these pulses.

India had imported about 780,000 tonnes of yellow peas by 31 March and may import another 500,000-650,000 tonnes by June-end, trade sources said. India largely imports yellow peas, used in place of chana, from Canada and Russia. Yellow peas, in various forms such as besan (chickpea flour) and whole peas or splits, is used as an everyday commodity. It is not only a staple in street food but also a key ingredient in the rapidly growing snack food industry.

Chana (raw) prices in key markets of Jaipur, Indore and Bikaner are hovering at 5,600-5,990 a quintal against a minimum support price of 5,440, while that of tur is quoted at 10,600-10,900 in key mandis of Karnataka and Maharashtra, as per data from spot traders.

“Initially yellow pea import was till 31 March. When domestic crops also started arriving the intention was to shield Indian farmers however the Red Sea conflict led to delays and the government had to extend the import window. This has led to a huge fall in domestic prices with farmers facing low yields this year as well as a 30% fall in prices from the date of the opening of yellow pea import," said Deepak Pareek, an agricultural economist. 

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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Puja Das
Puja Das is a New Delhi based reporter, covering food, farm, fertiliser, water, and climate change policies for Mint. Puja reports on food security, farmers' distress and how the agriculture sector is impacting India's rural economy along with policy initiatives to help meet the pledges made at COP21 in Paris. Puja holds a post-graduation degree in Broadcast Journalism from the Indian Institute of Journalism & New Media, Bangalore.
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Published: 03 Apr 2024, 04:51 PM IST
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