Charts of the Day: Kharif sowing of pulses likely to face free import headwinds

The Union government’s decision to free imports of the arhar (tur), urad and moong just ahead of the sowing season can send mixed signals and even adversely impact sowing in the current Kharif season. The sowing of pulses for the Kharif season usually takes place in June-July with the onset of southwest monsoon and the fresh harvest starts arriving in the mandis in November-December.

There is a strong likelihood that the arrival of some portions of the imports and the early harvest in the mandis will coincide. The window for imports is open from May 15 to October 31, and consignments booked by October 31 can continue to reach the Indian ports and cleared by customs till November 30.

Imports were ostensibly opened up to cool prices of the three pulses that had risen to about Rs 10,000 a quintal in the wholesale markets in May. It is also expected to quicken the pace of release of pulses that are held as stocks in warehouses.

It is also believed that the amendment to the Essential Commodities Act in 2020 that exempted pulses among other essential commodities from stock limits has resulted in inventory build-up with processing mills and traders and also aided the rise in the prices.

Pulses were on the restricted list for the last three years, with the union government specifying an annual quota for imports. For the current fiscal year, the import quota for arhar and urad had been fixed at 4 lakh metric tonnes each and for moong at 1.5 lakh metric tonnes.

The notification fixing quotas for the year stands superseded with the freeing of imports. India imports a sizeable quantity of pulses as the domestic output falls short of demand. Drought and floods also affect the output of the pulses crop leading to a shortfall in production every few years. The next three months will show how farmers in the pulses growing regions reacted to the decision to temporarily free imports of three commonly consumed dals.