By Rajendra Jadhav
MUMBAI (Reuters) - India has contracted to import 2.5 million tonnes of pulses for shipment in October to January, but the bulk of the purchases could be cancelled if the Maharashtra government continues a stock limit policy introduced earlier this week, the head of a trade body said.
The cancellation of pulse imports from countries such as Canada, Myanmar and Australia could exaggerate shortages in India, the world's biggest pulse consumer, and push prices to new highs.
Mumbai port in Maharashtra handles more than half of imported pulses. In an attempt to clamp down on hoarding, the local government earlier this week imposed a limit of 350 tonnes on importers.
"The stock limit is counterproductive. With such a tiny limit, importers can't operate," Pravin Dongre, chairman of the India Pulses and Grains Association, said on Wednesday.
"Some importers have booked bulk cargoes of 50,000 tonnes, which either needs to be cancelled or diverted to other ports in other states," said Dongre, adding nearly 250,000 tonnes of pulses had been stuck at Mumbai port due to the stock limit.
Prices of pulses like chickpeas, pigeon peas and green gram hit record highs this month, as a first back-to-back drought in three decades cut output of the world's biggest importer.
The price rise gave opposition parties an opportunity to criticise the government of Prime Minister Narendra Modi just as the country's third biggest state Bihar heads into elections.
"We have requested central and state governments to exempt importers from the stock limit. The limit will create supply shortage and prices will only spike," Dongre said.
India, which consumes nearly 22 million tonnes of pulses annually, sources yellow peas and lentils mainly from Canada and the United States, chickpeas from Australia and Russia, and green gram and pigeon peas from Myanmar.
The south Asian country's imports in the 2015/16 financial year through March 2016 could rise 22 percent from a year ago to 5.5 million tonnes, estimated Dongre.
Most of the pulse processing units are based in Maharashtra, Madhya Pradesh and Rajasthan, all of which have imposed stock limits.
"How we can move imported pulses from ports to processing units if everyone imposes stock limits?, asked a pulses processor based in Jalgaon in Maharashtra.
(Reporting by Rajendra Jadhav; Editing by David Holmes)
