Centre imposes harsher measures to prevent pulses hoarding
Stock limits, imposed under the Essential Commodities Act, ensure traders and wholesalers can’t hold more than the prescribed quantities of a commodity, thereby minimising the scope of hoarding to inflate prices
The Centre on Monday imposed harsher measures to tame prices of pulses, extending the period till which an anti-hoarding measure known as stock limits will be imposed on traders, from October 31 earlier to December 3, amid high food prices, a notification on Monday by the consumer affairs ministry said.
A deficient monsoon this year due to the El Nino weather pattern has shrunk the area sown with various types of widely consumed pulses, considered essential items, which is likely to stoke prices, analysts said. India depends on imports to meet its total domestic demand for lentils.
In June, to ease supplies of pulses amid high inflation, the Centre had imposed caps on the quantity of two widely consumed varieties of pulses – tur (pigeon pea) and urad (black gram) – that traders were allowed to store, a measure known as stock-holding limits.
Stock limits, imposed under the Essential Commodities Act, ensure traders and wholesalers can’t hold more than the prescribed quantities of a commodity, thereby minimising the scope of hoarding to inflate prices.
According to the notification issued on Monday, the limit for stocks with wholesalers and big-chain retailers has been cut from 200 tonnes earlier to 50 tonnes. The quantity of stocks for large millers has been reduced from total production in the preceding three months or 25% of annual capacity, whichever is higher, to the last one month production or 10% of annual capacity, whichever is higher, the notification said.
The new measures also stipulate that importers are not allowed to hold imported stocks beyond 30 days from the date of customs clearance.
Although the area under summer rice, the main summer staple, has expanded to a record 41 million hectares, pulses, grown mostly in rain-dependent farm belts, continue to be a pressure point, with sowing trailing last year’s levels. Pulses output is set to decline this year, as the total area under pulses is down by nearly 4% to 1.2 million hectares.
India currently depends on imports of about 2.49 million tonnes of pulses annually to meet domestic demand. To be sure, higher local production over the past seven years has cut India’s reliance on imports, which stood at a high of 5.8 million tonnes in 2015-16. India purchases pulses from a host of countries that grow them, from Myanmar to Mozambique.
The fresh steps have been invoked to “prevent hoarding and elicit the continuous release of tur and urad in sufficient quantities to the market and make tur dal and urad dal available at affordable prices for the consumers”, a statement said.
In May 2021, the Centre allowed duty-free imports of three pulses – tur, urad and moong – to ease prices of lentils. The import policy measures had resulted in a substantial increase in imports of pulses, which augmented supplies and decreased prices.