Stringent measures have been enforced by the central government to curb the rising prices of pulses, extending the duration during which an anti-hoarding measure called stock limits will remain in effect for traders. This extension, announced by the Ministry of Consumer Affairs, takes the limit from the initial end date of October 31 to December 3. The move comes in response to elevated food prices.
A deficient monsoon this year, attributed to the El Nino weather pattern, has led to reduced cultivation of various types of pulses, essential commodities widely consumed in India. This shortage in supply has the potential to escalate prices, as analysts have cautioned. India, in such circumstances, often depends on imports to meet its domestic demand for lentils.
In an effort to alleviate the supply constraints and mitigate high inflation, the central government previously imposed caps on the quantity of two commonly consumed varieties of pulses—tur (pigeon pea) and urad (black gram)—that traders were allowed to store. These caps, referred to as stock-holding limits, are imposed under the Essential Commodities Act, ensuring that traders and wholesalers do not stockpile quantities exceeding the specified limits, thereby reducing the opportunity for hoarding and price inflation.
According to the recent notification issued, the stock limits for wholesalers and major retail chains have been reduced from 200 tonnes to 50 tonnes. Furthermore, the permissible stocks for large millers have been scaled down from the total production over the preceding three months or 25% of their annual capacity (whichever is higher) to the production over the last month or 10% of their annual capacity (whichever is higher).
Additionally, the new measures dictate that importers cannot retain imported stocks beyond 30 days from the date of customs clearance.
Despite a record expansion in the area under summer rice cultivation, pulses remain a concern as their sowing trails behind last year’s levels. The total area under pulses has shrunk by nearly 4% to 1.2 million hectares, and consequently, pulses production is expected to decline this year.
To meet domestic demand, India relies on annual imports of approximately 2.49 million tonnes of pulses. It is worth noting that increased local production over the past seven years has reduced India’s reliance on imports, which reached a peak of 5.8 million tonnes in 2015-16. India procures pulses from various countries, including Myanmar and Mozambique.
The recent measures have been enacted with the objective of “preventing hoarding and ensuring the continuous release of tur and urad in sufficient quantities to the market, making tur dal and urad dal accessible to consumers at reasonable prices,” as stated in an official statement.
In May 2021, the central government had allowed duty-free imports of three pulses—tur, urad, and moong—to alleviate lentil prices. These import policy measures resulted in a substantial increase in pulse imports, bolstering supplies and reducing prices.
