After the government changed the import policy for pulses from "limited" to "free" the previous week, wholesale prices of tur, moong, and urad have dropped 10-15% this week.
Traders, processors, growers, and analysts are worried that the change would stymie India's efforts to achieve pulse self-sufficiency, as lower prices will enable farmers to switch to more profitable crops.
In addition to the changes in import policy, the Centre has requested state governments to regulate pulses under the Essential Commodities Act in order to keep prices under check. The policy changes have shocked trade participants because most pulse prices are hovering around the minimum support price levels.
"Prices of pulses began to soften in the domestic market after India opened up the import of pulses to the free category last week. Pulses rates have begun to firm up in the international market at the same time.
As the next kharif sowing season approaches, a downward trend in pulse prices could lead to a decrease in the area sown with pulses. Farmers can switch from pulses to other kharif crops like cotton and soyabean, which have higher prices than the MSP "I Grain India's owner, Rahul Chauhan, said.
The government of Rajasthan, a major producer of chana and moong, has asked traders to report their weekly stock position and transactions carried out during the week, following instructions from the central government to the states to track pulses under the provisions of the EC Act.
The president of the Kisan Mahapanchayat, Rampal Jat, has raised concerns about the declining trajectory in pulse prices. "The free import of pulses could put a stop to India's journey to pulse self-sufficiency that it started a few years ago," he said.
Consumers will pay more for vegetarian protein as a result of the policy changes, according to the All India Dal Millers Association, which represents the processing industry. "The decision to open pulse imports would concentrate the import trade in the hands of a few large multinational firms and a few large traders."
These firms have already purchased large quantities of tur, moong, and urad from countries such as Myanmar, Zimbabwe, Kenya, South Africa, and Malawi. The major importers would push small traders and millers to buy pulses at higher prices.
According to Suresh Agarwarl, president of the All India Dal Millers Association, "imports would result in farmers receiving lower returns for their produce."
