Trade, industry shocked by govt’s move to impose stock limit on pulses to send ‘right’ signal to the market

Trade and industry are shocked by the decision of central government to impose stock limit on pulses for a period of 4 months. While the government has said the ‘need for the decision was felt to send right signal to the market’, traders and processors say that there was no need to take the decision as prices are ruling near the minimum support price (MSP) levels.

“In a consistent effort to crackdown on prices of essential commodities like pulses, Government of India has issued a landmark order where it has imposed stock limits on pulses applicable to wholesales, retailers, millers and importers,” said a government release.

Effective from July 2 till October 31, the stock limit will be applicable to all pulses except moong. The wholesalers can now have a stock of maximum 200 tonnes, while the retailers have a cap of 5 tonnes. For the processors, the stock limit is equal to the production of previous three months or 25% of the annual installed capacity, whichever is higher.

For the importers, the stick limit will be 200 tonnes for sticks held prior to May 15. For stocks imported after May 15, the stock limit of 200 tonnes will become application from the date of custom clearance.

Reacting on the government order imposing stock limits on pulses applicable to wholesale, retailers and importers, Bimal Kothari, Vice Chairman, IPGA said, “The order imposing stock limits on pulses has taken the industry by complete surprise. It is a regressive step by the government and will severely impact not only the wholesales, retailers and importers but also the farmers and consumers. Farmers are going to be adversely impacted as it is going to be peak season for them with festivals around the corner and planting time for kharif crops. Prices are going to crash. Chana is already selling below MSP. Tur and Urad are selling at MSP. On the one hand the government wants the farmers to get MSP and double the farmers’ income but this kind of policy will hurt everybody and is certainly not beneficial to anyone.”

The industry claimed that the move can lead to supply shortages during the upcoming festival season. “India needs 25 million tonnes of pulses every year. This year we are expecting a shortage. Normally, an importer imports 3000 to 5000 tonnes of one variety but imposing limit to just 100 tonnes of per variety will lead to controlling supplies. Such restrictions will cause more harm than good to the farmers and consumers. These limits are going to throttle supplies as the importers will not be in a position to import large quantities together. Since the festival season is approaching from the next month the supply may become a major constraint due to this restraining order. We urge the government to immediately withdraw the order as it is not in the interest of anybody,” said Kothari.