Import duty cut on lentils for limited period upsets traders

PUNE: The Government of India reduced the import duty on lentils (masur) to 10% effective September 18 till October 31, after having raised it to 30% just for a period of the first 17 days of September.
Traders said the decision was surprising, and most of them would not be able to take advantage of it. The notification was issued early morning on Friday.

The government had reduced the import duty on lentils in June to 10% for a period of three months from June 2 to August 31. Farmer leaders had said that the decision was anti-farmer as the harvesting and marketing of local lentils was still in progress.

The import duty again reversed to its previous level of 30% on September 1. This led to fall in international lentil prices. Lentil prices in Australia fell to $ 540/tonne for Kolkata delivery. After India reduced the import duty, lentil prices in Australia have increased to $ 640/tonne to $ 650 tonne.

Lentils are available for import from Canada and Australia. The transit time for the cargo to reach from Canada to India is about 55 days, while it is about 28 to 30 days from Australia to India. With reduction of import duty on lentils effective for only 44 days, it is not feasible for most traders to import from Canada.

Mohit Upadhyay, managing partner, HMV Agro said, "Easing of the import duty will result in arrival of more cargo and help reduce the burden on consumers of high prices. However, as the import window is very short, it is not possible to import from Canada. The only option left for importers is to source lentils from Australia or diversion of cargo that is afloat the high seas."

Only those importers, who have booked consignments during the span of 17 days when duty was 30% and prices were low, will stand to benefit, say importers.

Rahul Chauhan, director, IGrain India said, "This decision can help to bring down the prices. But in 44 days, new shipments will not be able to come. The lentil that has left shores of Canada and advanced trade will get benefit of this decision. I expect that 2 lakh tonnes of lentils can be imported into India during this window of 44 days."