By Sandip Das
The government has ruled out cutting the import duty of chana and wheat for now, as it feels that sufficient buffer is available to carry out market intervention initiatives both at the retail as well as wholesale levels to cool prices.
Sources told FE that the government at present is not considering reducing the 40% import duty on wheat imposed in April, 2019, as the Food Corporation of India (FCI) has enough stocks to carry out open market sale scheme (OMSS) for bulk buyers till the end of current fiscal.
Till last week, the FCI had offloaded 3.9 million tonne (MT) of wheat under the bulk buyers this fiscal and currently the corporation has 19.78 MT of grain stock against the buffer requirement of 7.4 MT for April 1, when new crops start arriving in the mandi.
Sources said that with the farmers’ cooperative Nafed 2.2 MT of buffer would be sufficient to carry out selling chana under Bharat Dal initiative and offloading the pulses variety in the open market for purchase by bulk buyers till new crops commence arriving in the market by April next year.
Currently there is a 66% import duty on chana sourced from Australia while the government has abolished import on pulses from the least developed countries (LDCs) such as Tanzania, Mozambique and Malawi.
Trade sources said that to augment domestic supplies, the government should reduce the current import duty of 40% on kabuli chana which can be sourced from Russia.
Besides there are apprehensions about the next crop whose sowing is currently being undertaken, which is likely to be impacted by El Nino conditions persisting till next year.
As per the agriculture ministry latest data, the sowing of chana this season (2023-224) was less by 12% at 6.61 million hectare (mh) against 7.5 mh reported during the same period previous season.
The average chana sowing area for the last five years is 10.09 mh and the pulses variety which has 50% share in the country’s record pulses production of 26.05 MT in 2022-23 crop year (July-June) is majorly grown in Rajasthan, Madhya Pradesh and Maharashtra.
Area under wheat so far is 9.47 mh which is 8.5% less than the previous year.
In July, the government had commenced selling chana dal in retail packs under brand name Bharat Dal at highly subsidized rates of Rs.60/kg pack and Rs 55/kg for 30 kg pack to make pulses available to consumers at affordable prices.
Meanwhile, Nafed last week has sold chana in the open market from its stock from various locations in the price band of Rs 58 – Rs 63/kg, which is above the Minimum Support Price (MSP) for 2024-25 season of Rs 54.4/kg
The retail inflation last month of the chana split variety rose to 11.16% from 7.62% in September. Retail inflation in wheat last month declined to 7.61% from 7.93% in September.
This article has been republished from the Financial Express.