Stock market advisory tips|Import pulses on ‘actual user’ terms

A repeat performance in pulses production looks highly likely in 2017-18, following the record harvest of 22.95 million tonnes (mt) in 2016-17. As a result, the country’s dependence on imports is reducing substantially.

Additionally, a series of trade and tariff measures in recent months compounded by recent uncertainty over methyl bromide fumigation (since extended by six months), low domestic farm-gate prices and sluggish market conditions have considerably slowed the arrival of imported material.

REGULATING IMPORTS

It is necessary to ensure that excessive quantities are not imported, but just the right quantity that is needed to bridge domestic shortfall, if any. For this, it is necessary to prepare an annual demand-supply estimate by factoring-in income and price elasticity.

It would be prudent to regulate pulse imports by allowing only ‘actual users’, that is, dal mills, to import. Dal mills convert raw pulses into split /processed dal. ready for consumption.

DAL MILLING INDUSTRY

There are multiple benefits in allowing pulse imports under ‘actual user’ condition. The dal milling industry carries huge idle capacity. Allowing it to import will help enhance capacity utilisation.

After all, it is the core competence of dal mills to process raw pulses and bring them to the market. They have invested money, time and energy in setting up facilities. They need policy support. Allowing pulses import under ‘actual user’ condition will lead to the elimination of intermediaries, who add to the cost but not to value.

Importantly, dal mills need to modernise. ‘Actual user’ condition will provide them with a much-needed boost and encourage them to invest in scaling up. It will also generate employment and incomes in the dal milling industry, and in the associated logistics and supply-chain segments.

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