Allowing Pulses Export May Not Benefit Domestic Rates Significantly

MUMBAI (Commoditiescontrol) - Government has opened up exports of Tur, Urad and Moong dal after more than a decade in a bid to release excess stocks of pulses in the country to support farmers get "remunerative prices" ahead of Kharif harvest.



But it is unlikely to provide relief on larger scale as pulses prices in the international is much lower than what India can offer, due to sharp decline in rates there due to record pulses production in India during 2016-17 followed by recent India government move to put quantitative restrictions on imports of Tur, Urad and Moong.

India had banned export of pulses in 2006, which was extended from time to time. The prohibition on exports of pulses is not applied to export of kabuli chana and export of 10,000 tonnes of organic pulses and lentils per annum, while export of pulses is also allowed to Bhutan and Maldives.

African and Burmese sellers are offering Tur at much lower rates than current price prevailing in Indian markets. Sellers in Burma for Phatka Sortex Tur dal were active to sell around $700-$720 FOB basis for Dubai, but buyers are asking for around $580-$600.

Burma exports around 6,000 tonnes of Tur dal to overseas market annually. The main markets are Dubai, Singapore, Malaysia, Indonesia and Europe.

Approximately 15-20 dal mills are in Africa, which process only Tur Dal followed by around 4-5 dall mills are in Dubai. There are around 100 dal mills in Burma, but only 10 mills are active in Tur crushing, whereas rest are engaged in crushing of Urad and Moong.

Similar case was noticed in Urad as Indian prices are uncompetitive with Burma. Sellers in Burma for Urad Gota SQ variety were active to sell around $950 CNF basis for Colombo/Dubai and Urad Gota FAQ variety at $750. Burma exports approximately 10,000 tonne of Urad each year.

However Moong dal prices in India is cheaper than its peers like Burma and African nations, and this may provide advantage in the international markets. Sellers in Burma for 3MM moong dal variety were active to sell around $1150 CNF basis for Singapore. Moong dal annual export from Burma pegged at around 4,000 tonne. Burma exports Moong dal to Dubai, Singapore, Vietnam, Malaysia, Indonesia and Europe.

Moong prices in Burma is higher as China is the main buyer of this pulses, and import ban by India will not impacted its prices significantly.

India pulses export during FY 2016-17 totaled at 124,884 tonnes from 251,644 tonnes a year ago, according to APEDA. The commerence ministery data suggest that in 2016-17 the country has shipped around 0.87 lakh tonnes of chana (Kabuli Chana), contriburing 70% in total pulses export during 2016-17.

Farmers are presently harvesting moong and urad crop. However, prices of both the pulses are ruling below the MSP.

Though lower than previous year, India is again set to harvest a big crop of tur from mid-November. The central government has big stock of pulses, it has procured in the previous year to support prices.

According to trade sources, allowing pulses (Tur, Urad & Moong) export will not provide major boost to prices due to uncompetitive rates in the international market. The governemt should sell its stocks above MSP level, instead of selling at preavaling market price as it is much lower than MSP.

In case governemnt continues to liquidate buffer stocks at prevailing market rates, then there is higher possibility that farmers will get lower rates for their next Kharif pulses crop as well.

(By Commoditiescontrol Bureau; +91-22-40015533)