Importers halted bulk booking of pulses due to dwindling margins on sales in the local markets, industry players said on Wednesday. The appetite for imports has also been hit, with India likely to harvest a bumper crop this year.
“We have stopped bulk bookings at the moment. There is a huge difference between global and domestic pulses prices,” said K C Bhartiya, president, Pulses Importers’ Association.
Bhartiya said private importers had been facing huge losses importing at high prices and selling it cheap in the local market.
He said international prices were high as exporters were trying to cash in on India’s need for pulses.
Saket Singhal from Kolkata-based private importer P P Enterprises said there was a difference of around $100 per tonne between domestic and global prices.
According to Singhal, yellow peas, the most-commonly imported variety, costs around $420 a tonne or around Rs 19,000 a tonne, cost and freight basis, while at Mumbai port it is quoting at Rs 16,500 a tonne.
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Prices of tur for delivery at Mumbai port are around Rs 34,000-35,000 a tonne compared with local market price of Rs 31,000-31,125.
Urad import costs around Rs 43,000 a tonne compared with the local price of Rs 40,000-40,750 a tonne.
“Indian importers have contracted 2.2-2.5 million tonnes pulses so far,” Jay Khandhar, director of US-based JP Westam Export Inc, said adding orders had fizzled out in the past one month.
“Domestic prices of pulses have fallen on expectations of higher output. Also there are unsold stocks lying in the market which have dampened import demand temporarily,” Prakash Goenka, director of Mumbai-based importer U Goenka Sons Pvt Ltd.
Goenka said since prices of the commodity had risen considerably last year due to lower output, importers had booked huge quantities earlier this year anticipating same level of demand.
India is hopeful of harvesting a record 16.5 million tonnes of pulses in the current crop year, against 14.5 million tonnes in 2009-10.
To feed the country’s billion plus population, total pulses requirement is at over 20 million tonnes, which the government meets by regular annual imports of three-four million tonnes.
On Tuesday, the Centre, in a bid to rein in rising food inflation, allowed duty-free pulses import till Mar 2012.
“Tur prices, which touched record $1,250 a tonne last year, led to higher cultivation in Malawi and Mozambique. However, due to negligible import enquiries from India, the African suppliers are ready to sell tur at $550 a tonne, much below the minimum support price,” said Joy David, director of Navi Mumbai-based S R Intertrade. “The scene has changed this year and the earlier imported stocks are lying unsold,” he said.
In the last three months, tur prices have fallen from Rs 40,000 a tonne to Rs 30,000.
Analysts said prices of tur could have fallen to as low as Rs 25,000, but for the Centre-mandated support price of Rs 30,000 a tonne.
Not only private importers, government agencies have also slowed down pulses imports despite being subsidised by the Centre.
“Global prices (of pulses) are very high. We have been asked to go slow on imports for a while,” a senior government official said.
The official said the Centre had earlier mandated state-owned importing agencies to source around 1.5-2.0 million tonnes pulses from overseas in the current financial year, as output was lower than demand.
According to the latest estimates, State Trading Corp has imported around 150,000 tonnes of pulses till date since April.
MMTC has bought 60,000 tonnes of pulses, while PEC has contracted 300,000 tonnes.
“This is nowhere near the 1.5-2-million-tonne mark that we were asked to do,” said an official with a state-owned importing agency.
Since the government subsidised imports, higher international cost would increase the financial burden, the government official said.
The Centre reimburses up to 15 per cent losses incurred by the trading houses on the sale of imported pulses in the local markets.
It also gives a subsidy of Rs 10 a kg to state agencies for selling the imported pulses to states under the public distribution system.