Govt rules out cut in chana import duty

The central government is not looking to lower the import duty on chana (chickpea) immediately to avoid sending out negative signals to farmers ahead of the sowing season, set to start in a few weeks, despite strong demand from some traders, officials said.

Chana is a major import from Australia and Tanzania and attracts an import duty of 60 per cent, which some traders have demanded should be reduced to around 35-40 per cent to tide over any shortage as the new crop will hit the market only by midFebruary. They say stocks are on the verge of exhaustion because of increased disposal as part of the Garib Kalyan Package and open sales.

However, official sources said the government feels any reduction at this stage could impact market sentiment and pull down prices below the minimum support price (MSP) of ~5,100 per quintal.

At present, Chana prices are hovering around ~5,300 per quintal, but trade sources say prices might climb to ~6,000 per quintal in the coming weeks if supplies are not augmented.

“It is our firm believe that when the market prices are ruling above MSP of ~5,100 per quintal for the 2020-21 season, any imports at this juncture will give a very adverse signal to farmers,” a senior official said. Chana, primarily cultivated in the rabi season, is the biggest pulse grown in the country. In 2019-20, India produced around 23 million tonnes (MT) of pulses in total, and chana accounted for nearly half of that at 11.35 MT. It is largely cultivated in Madhya Pradesh, Uttar Pradesh and Rajasthan.

A senior official said because of the prevailing good price of chana, the National Agricultural Cooperative

Marketing Federation of India (Nafed) was able to liquidate a portion of its around 2.9 MT of pulses at a healthy rate of over ~5,400-5,500 per quintal, causing a minimal loss to the exchequer. It is left with stocks that are good enough to manage the distribution through the Garib Kalyan Package.

Under the package, the Centre government has been distributing 1 kg of pulses per month to all ration card holding families and migrants labourers since April — the scheme ends in November. It had allocated 1.6 million tonnes for the schemes, mostly chana. Traders said unless the import duty is lowered, chana prices will climb steadily as the new crop is expected only around February, while stocks are running dry. “India consumes 700,000-800,000 tonnes of chana per month and in the next three-and-a-half months (till middle of February) it will require 2-2.5 mt of chana. So, there could be a shortage unless duties are lowered,” said Bimal Kothari, vice-chairman of Indian Pulses and Grains Association said.