Centre imposes stock limits on pulses as prices rise

By Zia Haq

The Centre on Friday imposed caps on the quantities of two varieties of pulses – tur (pigeon pea) and chana (chickpeas) – that retail shops and traders can store at their end, a measure known as stock-holding limit aimed at boosting supplies and curbing prices. 

The Centre passed the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2024, specifying stock limits for wholesalers, retailers, supermarkets, millers and importers for the two commodities. 

“The imposition of stock limits on tur and chana is part of a slew of measures taken by the government to crack down on prices of essential commodities,” an official said. 

The measures, which will be in force till September 30, 2024, come on the back of lower output of pulses, such as tur, due to a patchy monsoon last year and higher prices. 

Although headline consumer inflation eased to a 12-month low of 4.75% in May from a year ago, food prices remained sticky at 8.69%, driven by cereals and pulses, according to the latest official data. 

Prices of the three varieties, tur (pigeon pea), urad (black mapte) and chana (chickpea), have remained stable but on the higher side through the year, hurting households. Inflation in pulses rose 17.1% in May, against an increase of 16.8% in the previous month. 

Stock limits applicable to tur and chana individually will be 200 tonnes for wholesalers, five tonnes for retailers and 200 tonnes at depots of big-chain retailers. For millers, the caps will equal to the last three months of production or 25% of annual installed capacity, whichever is higher, the order stated.

The steps are aimed at discouraging hoarding and increasing availability in markets. The restrictions also apply to importers, which cannot hold imported stock beyond 45 days from the date of customs clearance. 

India imports up to 15% of its pulses demand annually, and the country spent nearly $4 billion on imports in 2023-24 because domestic demand is increasing, making it a volatile group of commodities.

Retail prices of gram stood at Rs.87.74/kg on June 13, up 17% from a year ago, while the rate for pigeon peas rose to Rs.160/kg from Rs.126 a year ago, a rise of 27%.

Shortly after the Modi government assumed office during its first term in 2014, it focused on farm and trade policies to raise pulse output to avoid reliance on imports. Long-term import deals with nations, such as Mozambique, were signed to hedge against the rise in global commodity prices.

According to the agriculture ministry’s data, a campaign to distribute improved seeds raised pulses productivity by 34.8%, from 727 kg/hectare in 2018-19 to 980 kg/hectare in 2021-22. This led to a fall in imports, but extreme weather can still ruin crops and stoke prices.

“The government must speed up imports to lower prices and improve supplies. Stock Limits alone may not help much,” said Abhishek Agrawal, an analyst with Comtrade. 

This article has been republished from The Hindustan Times.