To bolster the supply of pulses and maintain price stability, the Indian government has waved the green flag for duty-free imports of yellow peas until March 31, 2024. This bold step aims to invigorate the pulse market and ensure an ample flow of yellow peas into the country.
Interpreting the Trade Seas
The Directorate-General of Foreign Trade (DGFT) announced this significant shift, shifting yellow peas from the “Restricted” category to the “Free” category in its import policy. The notification clarified that imports would be free from the minimum import price (MIP) condition and port restrictions until March 31, 2024. However, any import consignments with customs out-of-charge issued after this date will not be considered ‘free.’
Furthermore, the DGFT laid down that all yellow pea imports, effective immediately until March 31, 2024, must undergo compulsory registration under the import monitoring system. This additional measure aims to streamline and monitor the influx of yellow peas during this duty-free period.
Market Ripples – Canada’s Response
Following India’s decision, trade sources report a surge in yellow pea prices by approximately $0,075 per kilogram in Canada. While welcoming the government’s move, the Chairman of the India Pulses and Grains Association expressed concerns about the absence of duties to safeguard the minimum support price (MSP) for Chana, which is set at $0,652 or €0,61 per kilogram.
The landed price of yellow peas in India is around $0,5154 or €0,48 per kilogram. Kothari emphasizes that compared to chana, this lower price could adversely impact both growers and millers in Uttar Pradesh and Madhya Pradesh.
Yellow Pea Prices Soar
On a CIF basis to India, yellow pea prices in Canada have surged to $500 or €464 per tonne, a significant increase from the previous range of $430-435 or €400 per tonne. The government’s decision to eliminate the 50 percent customs duty on yellow pea imports has spurred this upward trajectory in prices.
The DGFT notification underscores that the pre-existing restricted import policy and associated conditions will be reinstated starting April 1, 2024. Under the restricted category, yellow pea imports were subject to an annual quota and a minimum import price of $2,40 or €2,23 and above CIF per kilogram, with imports permitted solely through the Kolkata Sea Port.
While the government’s move to open the floodgates for yellow pea imports aims to fortify the pulse market, the absence of duties raises concerns about the potential impact on domestic prices. Striking a balance between fostering trade and protecting the interests of local growers remains a delicate challenge. The coming months will unveil whether this duty-free tide ushers in prosperity or poses a risk to India’s pulse market’s stability.