MUMBAI (Commoditiescontrol) - Tur price is not finding any respite in the domestic markets despite of several steps taken by the government. The government in June month removed stock limit from pulses to encourage procurement by private players, but failed to do so as industry people are hesitant to make any bulk buying due to liquidity crunch, poor demand in processed pulses followed by bearish outlook.
The government had in March imposed 10% import duty on tur to check imports, as local prices had fallen sharply below the minimum support price due to a large local crop and surge in imports. The move failed to lift tur prices, as imports from African countries and Myanmar--the largest sellers of tur to India--are allowed duty free due to preferential treatment granted to these countries under bilateral treaties.
Bumper tur production in the country followed by delay in removal of stock limit, regulations post demonetization and ambiguity over the taxation under the good and services tax regime have disrupted the trade activity in pulses industry which is largely unorganized.
Centre also hiked MSP for Kharif 2017-18 Tur crop to Rs 5,450/100kg (including Rs 200 as bonus), but there was hardly any booster to tur prices in the spot market.
The market situation seems to be very miserable and therefore the government needs to take concrete steps at the earliest to improve the price of tur, otherwise the price of tur may go below Rs 3,000/100kg as African nations are offering Tur at very lower rates for July-August shipment. Further new domestic tur crop will be available from November onwards likely to continue to weigh on its price.
According to trade sources, "Malavi and Mozambique red tur (CNF) was last priced at $370 per tonne (Rs 23,803.92 per tonne) for July-August shipment, whereas Mozambique white tur (CNF) was available at $ 421 per tonne (Rs 27,081.39 per tonne) for July-August shipment. African origin Matwara (Jul-Aug) and Arusha tur (Aug-Sept) was offered at $430 per tonne (Rs 27,660.13 per tonne) and $460 per tonne (Rs 29,593.70 per tonne) respectively. Similarly, Sudan origin tur (CNF) was said to be at $525 per tonne (Rs 33,776.28 per tonne) in ready shipment.
About 70-75% of tur from African countries are shipped to India, which is the largest producer and consumer of tur. Deficit in the supply in India is met through import from Africa and Myanmar, the other two largest producers of the pulse in the world.
According to market sources, African countries (Mozambique, Sudan, Kenya, Malawi, Tanzania and others) are reported to have increased production of tur this year and are keen to offload their produce at the much lower rates than the prevailing prices in the domestic market. If this tur makes its way to domestic market then it will be very tough task for government.
It's time for government to take some bold decision to provide cushion to tur prices to support domestic market before situation gets worsen. Government can do it by putting quantitative restriction on tur imports followed by relaxation in tur exports. The country has harvested record tur crop in 2016-17 and supply is more than demand. By allowing export of tur from the country the excess tur will be let out from the country and likely to help to balance the supply-demand equation.
If the government wants to provide a right price (MSP) to the farmers, then this step should be taken at the earliest, otherwise in the next kharif season, the government will find themselves in nowhere situation as there will be responsibility against them to procure to entire production, which seems impracticable as per present infrastructure.
Tur prices so far, this month lost more than 4% and 60% from same period last year and trading much lower than MSP announced by centre amid bearish fundamental reasons. Further decline in prices can't be ruled out under present market conditions.
According to sources, the government has purchased a stock of buffer stocks of more than 1.5 million tonnes in the current season, which is 32.61% of the total production of 4.6 million tonnes. But there has been no any significant increase in tur price despite of huge stock procurement.
Tur sowing in the country is already in progress and according to latest data of the Ministry of Agriculture, till July 12, it has decreased by 9.10% to 21.28 lakh hectares compared to the previous year. Tur acreage in the country is expected to fall by 15-20%, but most of losses caused by fall in acreage is expected to be offset by better yield due to good rainfall in producing regions and if that happens then the availability of tur next season 2017-18 (Jan-Dec) will be huge and may led prices to fell to near decade low.
This is the right time for government to take few strict measures, before any further delay. Since government is holding a large chunk of crop it can easily control by allowing export and putting quantitative restrictions.
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(By Commoditiescontrol Bureau; +91-22-40015533)
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