Chana traders seek hike in export incentives to 15%

By: |
Pune | Published: March 27, 2018 4:03:15 AM

Though, the export incentives may not help in export of substantial quantities of chana, trade thinks that the move will help to cap the downward fall in prices.

chana, chana traders, MSP, chana traders want hike, chana exportWith international chana prices falling way below the domestic prices, pulse exporters across the country feel that the 7% export incentive announced by the Centre is not enough to encourage export and more needs to be done. (Reuters)

With international chana prices falling way below the domestic prices, pulse exporters across the country feel that the 7% export incentive announced by the Centre is not enough to encourage export and more needs to be done. Exporters and industry people feel that the export incentives should be hiked to 10-15%. The All India Dal Mills Association has written to the government seeking a hike in export incentive to 15%. The government’s decision to grant 7% export incentive to Bengal gram, or chana, under the Merchandise Export from India Scheme (MEIS) for a period of three months till June 20, 2018 was expected to improve prices. However, the collapse in international prices does not provide a conducive environment for export, industry observers said. Earlier, the government increased the import duty on Kabuli chana to 60%. Bengal gram (chana), a rabi crop, is harvested in Madhya Pradesh, Maharashtra, Karnataka, Andhra Pradesh and Rajasthan.

Though, the export incentives may not help in export of substantial quantities of chana, trade thinks that the move will help to cap the downward fall in prices. Traders were expecting chana prices, which are ruling at about Rs 3,400/quintal against the MSP of Rs 4,400/quintal, to fall to Rs 3,000/quintal. In the current season of 2017-18, chana production has gone up to a record 110 lakh tonne, up by 20-25 lakh tonne compared to the previous season. Because of a good season last year and imports, the buffer stock across the country is also large. The Centre has announced a MSP of Rs 4,400 per quintal.However, farmers are forced to sell their produce 17-18% below the MSP. The Madya Pradesh government as well has announced a MSP of Rs 4,400 per quintal plus a bonus of Rs 100 per quintal. According to Suresh Agarwal, president of All India Dal Mills Association, the production of Chana is likely to touch 105 lakh tonne this season, nearly 25% more than the last season.

“Imports continued until recently when they should have been stopped nearly 9 months ago. As a result, nearly 8-9 lakh tonne has already been imported from Australia. Hence, where prices were Rs 58-60 per kg a few months ago, they have slid to Rs 35-36 per kg. There is no parity with international prices and therefore export incentives should be increased to 15% to become viable. Today Australia is the largest exporter of chana and prices of India are higher by nearly Rs 2 per kg. Moreover, while the Australian contracts are in place, India will take some time to become competitive in the international market,” he said. Agarwal said that for the farmers to get the MSP for chana, at least 25 lakh tonne chana needs to go out of the country.

Nitin Kalantry, a pulses processor from Maharashtra, agreed that at 15%, the viability of export will increase. The government can cap exports at duties paid on import so far, he said, adding that with the MP government not going ahead with the Bhuvantar Yojana, prices have gone up by Rs 150 per quintal on Monday. Earlier, government had increased import duty on kabuli chana to 60% last week. The price of kabul chana, which was ruling at Rs 9,000/quintal to Rs 10,000/quintal previous year, has fallen to Rs 6,000/quintal to Rs 7,000/quintal. The Centre has decided to procure some 3 lakh tonne chana under the price stabilisation scheme (PSS) in Maharashtra and begun the online registration process for farmers from last week onwards. Chana procurement is expected to continue till May 29.

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