Govt needs to revisit import duty on chickpeas, lentils: IPGA

By: |
May 19, 2021 6:43 PM

On chickpeas situation in India, GGN Research Managing Partner Nirav Desai said, "we are going to be broadly dependent on the market supplies, which are expected to be lower by 12-15 per cent over last year".

This could result in a severe shortage in domestic production.This could result in a severe shortage in domestic production.

India faces tight supply-demand situation with respect to chickpeas (chana) and lentils (masoor dal), and the government needs to revisit import duties on these two pulses to encourage overseas purchases in the coming months, the Indian Pulses and Grains Association (IPGA) said on Wednesday.

Currently, the world’s largest consumer of chickpeas and lentils levies 50 per cent tariff on imported lentils and 66 per cent on imported chickpeas. The tariffs have been kept higher to protect the interest of domestic farmers.

India imports lentils and chickpeas from Australia and several other countries. “In 2021, all pulses in India are trading above Minimum Support Price (MSP) and government stocks have hit a low. Both show we definitely have issues in our production of pulses in the last Kharif and Rabi seasons,” Saurabh Bhartia, IPGA Executive Committee Member, said during a webinar.

He also said the share of Australian lentils in India’s import has been 10-15 per cent over the last seven-eight years and almost 80-90 per cent of the country’s chickpeas’ requirements came from Australia till December 2017, according to a statement issued by IPGA.

“However, the 66 per cent import duty imposed by Government of India (GoI) has made it difficult to import (chickpeas) from Australia, resulting in these imports dropping to almost zero,” Bhartia was quoted as saying in the statement.

On lentil situation in India, IPGA’s East Zone Convenor Anurag Tulshan said the current supply and demand situation is tight. “The government needs to come forward and make some changes with regard to the duty structure, so as to get in more cargo because going forward.”

He said India needs to import at least 5 lakh tonnes of lentils between July and December this year.

Currently, India has an inventory of about 3,50,000 – 4,00,000 tonnes of red lentils, which includes around 2,00,000 tonnes of imported red lentils and 1,50,000-2,00,000 tonnes of Indian desi red lentils, he said, adding that this should last for two-and-a-half months after which the country need to import more.

Tulshan said while Indian government estimates lentils production to be 1.35 million tonnes in 2020-21 crop year (July-June), trade estimates are not more than 9,00,000 tonnes. “The crop size has been lower and current prices are witness to it.”

India’s total consumption of lentils is approximately 1.80 to 2 million tonnes a year, which translates to roughly 1,50,000-1,70,000 tonnes every month. “So, we are definitely dependent on imports of lentils,” he added.

The webinar was organised as part of the Australian government’s Australia India Business Exchange (AIBX) programme and IPGA was co-host. The panelists were domain experts from India and Australia.

Sharing Australia’s perspective on lentils, Pulse Australia Director Nick Poutney said that while the Indian government may be over-estimating their lentils production, the Australian government may be underestimating the Australian lentils production.

If Australia produces 5,00,000 tonnes of lentil crop in 2021-22, then it will be relatively easy to export with limited demand from India, he said.

“If India decides to reduce import duties on lentils to allow imports, this will place pressure on relatively tighter Australian supplies,” he noted.

On chickpeas situation in India, GGN Research Managing Partner Nirav Desai said, “we are going to be broadly dependent on the market supplies, which are expected to be lower by 12-15 per cent over last year”.

NAFED had procured about 2,48,000 tonnes of chickpeas till April 14 of this year, much below the target of 2.7 million tonnes. “This year, NAFED does not have a lot of stock, hence, we do not see NAFED intervening in the market repeatedly,” he said.

Also, chana prices this year are likely remain firm on tight supplies. However, the only major setback can come from the government if it makes changes in the import duty, he added.

Wilson International Trading Managing Director Peter Wilson said chickpeas crop prospects are good in Australia this year.

“If Indian policymakers do change their policies, Australia will be ready with a reasonable crop time to meet India’s import demands,” he added.

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