Myanmar violence may spike pulses prices ahead of festival

MUMBAI: The Centre’s plan to import 1.3 million tonne of pulses to meet the rising demand ahead of the festival season may be hit due to the political instability in Myanmar, an industry official said here.

The political instability in Myanmar has affected the exports of pulses from that country. India, the largest importer of Burmese pulses imports around one million tonne of pulses from Myanmar, a leading pulses importer, Morshibhai Shah said. In view of the delay in shipment, the prices of pulses have started firming up in the local market, Mr Shah added.

According to traders, 4,000 tonne of pigeon pea, 3,000 tonne of lintel and 1,000 tonne of black gram would be imported. The government has so far imported two lakh tonne of pulses. Of these, state-owned trading firm PEC will sell more than 20,000 tonne of imported pulses by October in order to increase the supply of the commodity.

The firm had in the past week invited bids from domestic traders for sale of over 1,300 tonne of imported pulses, lying at warehouses in Chennai and Mumbai.

India annually imports between 1.5 and 2 million tonne (MT) of pulses, valued at Rs 2,000-3,000 crore. With domestic production stagnant at 13-14 MT and build-up of speculative pressures, prices have hardened considerably over the last year.

The government is concerned that despite the import of about 18 lakh tonnes of pulses in FY07, the prices have not come down to the desired level. The customs duty on import of pulses has already been reduced to zero till August 1. India is facing an estimated shortfall of 3.2 MT of pulses.

Marketmen are eagerly awaiting the outcome of decision of futures trading ban on pulses like tur and urad. The government had banned futures contracts on tur and urad in January this year, followed by wheat and rice on February 28 to control inflation. The government move was prompted by complaints that futures trading in these commodities were fuelling prices.

Many studies done following the ban seem to suggest that the rise in prices was a result of supply-demand mismatches rather than futures trading. This has now prompted the FMC (Forward Markets Commission) to ask the government to revise their earlier decision. “We are going to write to the government to resume futures trading in wheat, rice, tur and urad. We are just waiting for Abhijeet Sen committee report to be submitted, said FMC chairman BC Khatua said in the past week.