Smuggling of pulses hits importers and farmers

The Indian pulses industry has raised concerns about the alleged smuggling of the agro commodity from Nepal and Myanmar. Traders said that illegal consignments are affecting importers paying customs duties and also the local farmers, with farm-gate prices of pulses trending below the state-set threshold due to a glut.

“There has been huge smuggling of pulses through the border with Nepal, which has been affecting the trade in a big way," said Bimal Kothari, vice president, Indian Pulses and Grains Association (IPGA). Traders said that the cargo imported at Kolkata port gets smuggled into the country through Nepal.

According to the first estimate of Rabi crop production issued by the National Bulk Handling Corporation (NBHC), the area under gram (chana) is likely to increase by 10.14 per cent to 10.64 million hectare, while the production of chana is expected to increase by 7.90 per cent to 11.93 million tonnes.

India had imported a record 5.8 million tonnes of pulses in FY16, followed by 5.6 million tonnes in FY18. The country also signed a contract with Mozambique to import pigeon pea (tur) over a period of five years. With favourable monsoon rains, India had bumper output over the past three years, preventing domestic prices from increasing.

Imports were curbed to support local prices. It was mandated that the cost of imported yellow peas not be lower than ₹200/kg and a duty of 50 per cent was imposed on this price, taking the price of imported yellow peas above ₹300/kg.

However, some traders managed to get a stay on the import restrictions on yellow peas from the High Courts of Chennai and Jaipur, taking the total import of pulses in FY20 to a likely maximum of 3 million tonnes. Besides legal imports, illegal trade is boosting supplies locally as well, said traders.

After India imposed import restrictions, Canada, the largest producer and exporter of yellow beans, has slashed its prices by close to 50 per cent , which has made smuggling viable.

“We have already represented to the government about stopping the smuggling of pulses from Nepal, where imports of the commodity are otherwise not so high,” said Jitu Bheda, president, IPGA.