Ahead of the upcoming state elections, the central government is taking several steps to control food inflation due to uncertain monsoon and uncertainty over the kharif crop.
After imposing stock limits in pulses, the central government has now extended the import window for pulses and soymeal, so that imports cannot take place after January 31, 2022.
Pulses and oilseeds have been on the government’s inflation control radar since May as both the commodities showed a bullish trend. Therefore, earlier this year, the central government had allowed the import of 4 lakh tonnes of tur, 4 lakh tonnes of urad and 1.5 lakh tonnes of moong. On May 5, the government allowed free import of pulses. But the real blow to the industry came on May 14, when the central government capped the stock with pulse processors, wholesalers and retailers.
Similarly, in the case of edible oil, the central government started lashing out when the past few months saw a sharp rise in prices. After reducing the import duty on edible oils (both crude and refined soybean and sunflower oil), the government has now invoked the Essential Commodities Act to ask traders, mill owners and other stockholders to declare their stocks. This, the industry said, was the last step before stock limits were imposed on them to check price rise.
The government had allowed the import of 1.2 million tonnes of the substance from the poultry industry at the highest ever prices of oil-free soycakes (the protein-rich solid left after oil has been extracted from the seeds). The central government had allowed the import of genetically modified (GM) soycakes as non-GM ingredients (which are produced in India) are not readily available.
Earlier the deadline for the arrival of pulses and soymeal was October 31. But in the last few days, the central government has extended the import window.
Therefore, the deadline for imports under the Open General License for pulses has been extended till December 31 and the last shipment is due by January 31.
India Pulse and Grains Association (IPGA) Vice President Bimal Kothari welcomed the move. “Excessive rainfall due to disruption of monsoon for three weeks between June and July is expected to hamper production of tur, urad and moong, which may result in severe reduction in domestic production. The Government of India, taking early cognizance of this, has taken a proactive step by expanding the import window, which will ensure adequate import of these pulses to tide over the ongoing festive season, till the new domestic crop hits the market. This will also help in stabilizing the prices during the festive season.
Similarly for soymeal, the government has extended the last date of arrival till January 31.
The reason behind both these measures is uncertainty at the policy maker level about the availability of essential commodities due to an uncertain monsoon. With a deficit of six per cent (the country has received 749.6 mm of rain against the normal of 795.5 mm), the fate of some kharif crops, especially moong and urad, is now uncertain. Even tur, which is mainly harvested during the rabi season, has witnessed moisture deficit in the main producing states of Karnataka, Madhya Pradesh and Rajasthan.
The Wholesale Price Index (WPI) for August showed both pulses and oilseeds to be higher than other commodities. With elections in five states, including Uttar Pradesh, food inflation will be the last thing any government would want to contend with.
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