MUMBAI, India (Reuters) — Most of the 2.5 million tonnes of pulses that India has contracted for shipment in October-January could be cancelled if a state government continues a stock limit policy it introduced last week, says the head of a trade body.
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. Some pulse staples now cost more than chicken on retail shelves, the Times of India reported.
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Mumbai port in the western state of Maharashtra handles more than half of imported pulses. In an attempt to clamp down on hoarding, the local government recently imposed a stocks limit of 350 tonnes on importers.
“The stock limit is counterproductive. With such a tiny limit, importers can’t operate,” said Pravin Dongre, chair of the India Pulses and Grains Association.
“Some importers have booked bulk cargoes of 50,000 tonnes, which either needs to be cancelled or diverted to other ports in other states.”
Nearly 250,000 tonnes of pulses had been stuck at Mumbai port because of the stock limit.
Prices of pulses such as chickpeas, pigeon peas and green gram hit record highs this month as a first back-to-back drought in three decades cut production in the world’s biggest importer.
In recent days the government has seized nearly 75,000 tonnes of pulses from hoarders in raids across 13 states, the Times reported. India, which consumes nearly 22 million tonnes of pulses a year, buys yellow peas and lentils mainly from Canada and the United States, chickpeas from Australia and Russia and green gram and pigeon peas from Myanmar.
India’s imports in 2015-16 could increase 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?” said a pulse processor in Jalgaon, Maharashtra.
The price increase gave opposition parties an opportunity to criticize prime minister Narendra Modi’s government just as Bihar, the country’s third biggest state, 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.
