Curbs on pulses, edible oil as prices still high: Govt
On a day when several mandis across the country are closed in protest against the Centre’s recent decision to impose a stringent stock holding limit on pulses, the government on Monday clarified that limits have been defined as retail prices are still higher than last year.
However, there is some moderation in the past few weeks.
It said the same logic also holds true for edible oils, the import duties on which were slashed a few days ago and curbs lifted on import of refined oils.
Both the decisions on edible oil and pulses have caused massive resentment among the trading community as it came just ahead of the kharif sowing season and also when prices were off their peaks due to the multiple steps announced recently.
Sources said trading activity in some of the major mandis dealing in pulses, such as Sholapur, Amravati and Latur in Maharashtra, Indore and Dewas in Madhya Pradesh along with Kanpur in Uttar Pradesh was impacted. This was because traders went on a flash strike in protest against the decision to impose stock limits.
“This decision of the government has come as a jolt to the traders as they will now be compelled to sell pulses — which they purchased from farmers at high prices — at low rates, causing economic loss to them,” said Rahul Chauhan of igrain India, a commodity research firm.
He said though the limits are applicable only till October 31, 2021, but even after that traders will be wary of purchasing at a high price from farmers.
However, food secretary Sudhanshu Pandey said the decision to impose the stock limit on pulses and also lowering import duties on edible oils have been taken — as even though prices have come off their peaks — they are still higher than last year.
He was replying to a question on whether the Centre’s decision to impose stock holding limit on pulses and sharply cut duties on crude edible oil while allowing free imports of refined oil has come slightly late in the day.
“Barring masoor dal, prices of all other pulses have declined continuously in the last 4-5 weeks, both in retail and wholesale markets,” he said. For instance, in Delhi, retail prices of pulses have declined up to ~7/kg in one month. Meanwhile, the India Pulses and Grains Association (IPGA), in a statement, said there is need to regulate the retail prices of pulses because the spread between the wholesale and retail prices is fairly large in major cities.
It said that a survey done by IPGA in June 2021 shows that the gap between wholesale and retail prices of pulses is huge.
“IPGA believes that the government is targeting the wrong sector. It is focusing on traders, whereas it actually needs to conduct an indepth scrutiny of the gap between the wholesale and retail prices,” said vice-chairman of IPGA Bimal Kothari, in a statement.
Meanwhile, the edible oil industry is also up in arms against the decision to allow unrestricted import of refined oils and lower the import duty on crude.
Both the Solvent Extractors Association (SEA) and Central Organisation of Oil Industry and Trade (COOIT), in separate statements, said allowing unrestricted imports of refined palm oils will have serious repercussions for domestic refiners and oilseeds farmers as their prices will crash.
“The action will surely send the domestic industry on the brink of bankruptcy as we have seen in the past with so many refiners. The situation was looking up after a ban on import of refined oils was imposed in January 2020, but we are back to square one,” SEA said.