Stock-holding curbs on select farm items extended by a year

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New Delhi | Published: September 23, 2015 12:03:17 AM

The Cabinet on Tuesday approved a proposal to extend curbs on the holding of pulse, edible oil and oilseed stocks beyond permissible limits by one year through September 2016.

The Cabinet on Tuesday approved a proposal to extend curbs on the holding of pulse, edible oil and oilseed stocks beyond permissible limits by one year through September 2016.

“This will enable states to regulate trade of these essential commodities and to continue to take effective operations under the Essential Commodities Act, 1955. They can impose stock limits/licensing requirements etc. to curb unscrupulous trading, hoarding and profiteering,”  an official statement said after the Cabinet meeting.

The extension will also help states, which can fix the limit of stocks traders can hold, ensure adequate availability of these commodities in the domestic market and keep prices under control.

India imports more than half of its edible oil and one-fifth of its pulse requirements a year. Its edible oil import value rose nearly 13% in 2014-15, while that of pulse surged by 35%, according to industry estimates. So hoarding can significantly affect the prices of these items, especially when the rupee has depreciated almost 6% since April, worsening risks of imported inflation. Thankfully, global prices of farm commodities have remained subdued for over a year now.

“The country imports edible oil and pulses in huge volumes to bridge a domestic shortage, so it is only logical that all efforts must continue to be taken to tackle hoarding effectively. For this, extending the stock-holding limit on these items is a necessary step, especially when inflation in pulses has hit through the roof,” a senior government official told FE.

The stock-piling norms, coupled with comfortable supplies following adequate imports and steady global prices, have helped keep domestic edible oil prices subdued in recent months. However, an almost 10% drop in pulse output in the last crop year through June and fears of a below-par harvest in 2015-16 due to deficient rains have driven up prices of the protein-rich staple in recent months.

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