Last week, the government decided to reimpose the import duty on yellow peas. It allowed duty-free imports from December 25, 2023, to February 28, 2025. Last month, the Centre extended the duty-free imports of pigeon peas (arhar or tur) until March 31, 2026.
Similarly, Food Minister Pralhad Joshi told the media a couple of weeks ago that his Ministry had recommended the reimposition of Customs duty on lentils (masoor). But no notification has been issued yet on this. It leaves chickpea (chana) and urad (black matpe) as the other pulses on which the government has to decide by March 31 if it wants to extend the duty-free imports.
There are two data points to look at with concern over duty-free imports by India. One is the current prices of six key pulses and their minimum support prices (MSP). The prices of all pulses are ruling below MSP (see chart). Though the weighted average price of gram (chana or chickpea) is a tad higher than the MSP, prices have dropped to levels of ₹50/kg from ₹83/kg a few weeks ago in most parts of the country.
The second is imports. Data from Grains Australia show that since the marketing year began in October 2024, India has imported over one million tonnes of chickpeas by January. This was against a meagre 83,000 tonnes imported during the entire 2023-24 season to September. India has also imported about 1.5 lakh tonnes of lentils from Down Under during October- December 2024.
Statistics Canada data show that India imported 1.26 million tonnes of peas and 6.43 lakh tonnes of lentils between August (start of marketing year) and December 2024. Indian traders say India imported 3 million tonnes of yellow peas in 2024.
There has been a deluge of import of pulses in India, with 2024 shipments pegged at a record high of 6.63 million tonnes.
Plunging prices
Given these imports, the prices of pulses have plunged in India. For example, urad prices dropped over 25 per cent since June 2024 from over ₹100 a kg. The fall continued despite the Ministry of Agriculture estimating urad crop 25 per cent lower in the 2024 kharif season.
With Indian prices falling, global prices dropped too. Urad prices in the global market have dropped below $900 a tonne for the superior quality compared with $1,200 two months ago. Pigeon pea prices have declined to near $800 a tonne from $1,400 in mid-2024. Prices of yellow peas have dropped to $450 a tonne from over $700 when India allowed duty-free imports.
“Yellow peas have taken away our peace of mind,” say traders in the pulses industry. With Finance Minister Nirmala Sitharaman announcing a six-year “Mission for Aatmanirbharta in Pulses” focusing on tur, urad and masoor in her Budget proposal, farmers need higher returns to pursue the cultivation of pulses.
While Indian farmers are getting lower prices, growers in Australia and Canada are reaping rich rewards for exporting lentils, yellow peas and chickpeas to India. For example, Australian growers are getting ₹160 as returns for their chickpeas, while Indian farmers are getting only ₹100.
Canadian and Australian farmers are holding back their produce, awaiting higher prices. They can afford to wait as they are all well off, unlike the majority of Indian farmers who are small landholders.
India may have allowed duty-free imports as pulses were badly affected due to the El Niño weather in 2023-24. But with inflation under control and the rabi crop harvest starting, the Centre needs to curb imports. Higher prices for pulses will also encourage growers to opt for the legumes during the kharif season.
If there is any supply shortage, India can take a call during the latter part of the year, say, August. Until then, it has to signal to the growers that it favours them getting good returns and expects them to continue sowing pulses rather than forcing them to shift to crops such as maize (corn). It is another story that ethanol manufacturing is favouring the cultivation of maize over pulses.
The government can come up with an import quota and a duty cut if there is any need after assessing the whole situation. Probably, it needs to take stakeholders into confidence and come up with a stable policy that will encourage Indian growers and keep prices stable.
The trade says urad imports could be permitted duty-free for some more time, but imports of chickpeas and lentils need to be curbed. For now, growers need protection. The Centre would do well to ensure they are protected against cheaper imports, through the imposition of a reasonable customs duty.
With inflation under control and the rabi crop harvest starting, the Centre needs to curb imports. Higher prices for pulses will also encourage growers to opt for the legumes during the kharif season