Industry, experts slam move on pulses, maize

The government's decision of extending the ban on pulses exports and reducing custom duties on maize imports for curbing inflation has been slammed by experts and agri-based industries.

They said the measures would not help in curbing rising prices and called for fundamental issues to be addressed properly.

The country is deficient in the production of pulses and depends on exports of around 2 million tonnes from countries such as Canada, Tanzania, Myanmar and Australia.

"There won't be any significant impact of the government's measure on pulses. Rather, the government should encourage domestic production by announcing minimum support prices (MSP) well in advance of the sowing so that farmers are insured against various risks involved in farming," said Narendra Singh of Kanpur-based Indian Institute of Pulses Research.

The domestic pulses production has been stagnant at under 15 million tonnes for several years now. "The government has failed to take the fundamental approach to the problem over the last one-and-a-half decade. Unless production of tur, moong and chana is improved, there will be no relief as domestic demand is on the rise," said Suresh Agarwal, chairman, Madhya Pradesh Dal Udyog Mahasangh.

The latest market estimates for chana output hover around 4.8 million tonnes against the earlier projections of 5.8 million tonnes. The recent rain in Tamil Nadu and Karnataka has damaged the tur and moong crop.

"Facilities like a good irrigation system, availability of power, better seeds and fertilisers should be given the priority," added Agarwal.

Coming to maize, the country normally does not import the grain. In the current season, on the back of higher output, the exports are heading for a historical high which could reach between 1.5 and 2 million tonnes.

"International prices of maize are quite higher than the prices in the domestic market. At the moment, factory landing rates of are about Rs 800 a quintal which will rise to Rs 1,000 a quintal if imported," said Vijay Gupta, chairman and managing director of Ahmedabad-based Gujarat Ambuja Exports.

According to Vishal Majithia, managing director of Mumbai-based Sahyadri Starch, even after the duty cuts, the import viability is not there. "The government should have taken measures to curb exports instead."

Amit Sachdev, Indian Representative at US Grains Council, said, "I do not think that there will be any impact on the domestic maize market as there is no parity between domestic and international rates. Import could possibly prove viable during June-September."

The latest report from US Department of Agriculture, which was released yesterday, suggests that acreage of maize in US has declined by 8 per cent (against last year) due to favourable prices for other crops and high input costs of corn.

The report further added that the price outlook for corn remains strong due to the continued rise in the production of ethanol.

Apprehensions of a futures ban are still looming strong on commexes which pulled pulses contracts down. On the National Commodity and Derivatives Exchange, the near-month contract of maize closed the day at Rs 762 a quintal, down Rs 17 against the previous close, where as that of chana crashed by Rs 111 a quintal to Rs 2,676 a quintal.