On March 26, the Finance Ministry issued a notification that extended duty-free import of pulses until March 31, 2014. In such a situation, the Food Ministry’s reported move to ask the Centre to impose a 7.5 per cent import duty on pulses has led to confusion among traders.
“When the Finance Ministry has issued a notification of extending duty-free import, how can the Government suddenly impose duty?” wondered a Chennai-based importer, who did not wish to be identified.
The Food Ministry’s reported move is on the heels of the Commission for Agricultural Costs and Prices recommending a 10 per cent customs duty on pulses to encourage farmers grow more pulses as imported pulses are ruling cheaper.
“The Agricultural Costs Commission people are the only ones talking of this,” said another trader from Mumbai. The pulses trade says it would not be wise on the part of the Government to impose import duty now, since traders have been badly hit by slack domestic demand and plunging rupee.
“Importers, in particular, have been badly mauled in pulses trade with the rupee diving to record low,” said the Mumbai trader.
The rupee dropped to a record, breaching the 61-mark against the dollar earlier this week before recovering to 59.67 on Thursday.
“Even prices of pulses in the domestic market have crashed in the last few months,” said the Chennai-based importer.
According to Ankur Pandya, a trader in Indore, the landed price of imported arhar (tur) is Rs 4,125 a quintal, while its domestic price is Rs 4,450.
Similarly, imported masur costs around Rs 4,450 a quintal, while the domestic price is Rs 4,250.
Prakash Vora, a wholesale trader at Indore, said importers are selling masoor at a lower rate because the stock is old.
Official sources, when contacted, said there are plans in the Food Ministry to recommend a duty hike in pulses import.
The reported move has, in fact, pushed up prices of various pulses by at least Rs 100 a quintal in the last couple of sessions.
Traders are, however, hopeful that with the rupee plunging and India being the top importer and consumer of pulses, the Finance Ministry may not agree to any hike in the duty.
subramani.mancombu@thehindu.co.in