INFLATION
No Respite
India pulses to stay dear, export ban seen toothless
1 April 2008
 |
| (Reuters) |
The government's decision to extend an export ban on pulses to fight inflation and to ease domestic prices that have soared is largely seen as a toothless move, industry officials say. The ban on pulses exports was extended for another 12 months, the second since it was first clamped in June 2006. The decision was taken at a meeting of the Cabinet Committee on Prices at Prime Minister Manmohan Singh's in New Delhi on Monday.
"We had been exporting only around 3 per cent of total production. So, an extention of the ban will not have any effect on domestic prices," says Gopal Kogta, president of Pulses Manufactures and Exporters Association of India.
"The market was expecting this decision. Sentiments may change in short term, but prices will remain firm due to the lower production," says Chowda Reddy, an analyst at Karvy Comtrade.
Prices of pulses, a staple food for most Indians, have risen significantly in the spot market in the country that is the biggest producer and consumer of the nutritious commodity.
In the Delhi market, the spot price of chana, a major pulse, has risen 21 per cent to Rs 2,625 per 100 kg in last three months. In Mumbai, yellow peas rose 32.3 per cent to Rs 2,211 per 100 kg in the last one year.
In a year of surging inflation -- it hit a 14-month high in mid-March -- the winter crop output too is likely to fall by 8.8 per cent in 2007/08, against 9.4 million tonnes last year.
The lower ground water level and scarcity of rains would lead to lower yield of winter pulses, says Hari Kishan Periwal, a trader based in Bikaner, Rajasthan.
Madhya Pradesh and Rajasthan, the main producing regions, received lower rainfall this year.
Unseasonal rains in southern India in March have affected the quality and will keep prices of superior grades on the higher side, says Ajay Khandelwal, a miller based in Indore, Madhya Pradesh.
To fill the gap between production and consumption India imports pulses, mainly from Australia, Canada and Myanmar.
The bulk of the imports consist of yellow peas and its prices have jumped in international market, pushing prices up at home.
"Import and export policies are short-term measures. The government should consider increasing domestic production. Only a rise in domestic production can solve the problem," says K.C. Bhartiya, president, Pulses Importers' Association of India. Prices would remain firm in the international market, forcing Indian buyers to pay more, he says.
(Reuters) |
Sensex rises 61 points in opening trade 
