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MUMBAI (Commoditiescontrol) - In a bid to support falling Tur (Pigeon) prices in the country, India government on Saturday, August 5 announced to put a cap on imports of Tur/Tur dal. "Import shall be subject to an annual (fiscal year) quota of 2 lakh tonne," the Directorate General of Foreign Trade said in a notification. It, however, said that this restriction will not apply to government's import commitments under any bilateral / regional agreement.
Commoditiescontrol has said from time to time to curb cheaper imports of pulses, especially Tur, to support prices due to record production in the country, which is more than sufficient to cater to the domestic demand.
The government took a right step by putting cap on imports of Tur/Tur Dal, but it alone will not make a major difference as government is holding huge stocks around 15-16 lakh tonnes of Tur and future course of trend in Tur is dependent on how government releases this stock.
Tur Price Movement After Import Restriction
Burma lemon tur prices at the Mumbai market surged sharply by around Rs 550 to Rs 4,000/100kg on Saturday after government notified to restrict Tur/Tur Dal imports, however prices today receded by Rs 150 at Rs 3,850 due to profit booking. Further, buyers are cautious to make any bulk purchases at the higher price level.
Buyers are hesitant and uncertain before closing any bulk deals, whether the restriction will be applicable to the countries, with which India have a bilateral trade agreement. Earlier, in March when government raised import duty on Tur by 10%, it was not applicable to Burma and African nations as India have duty free trade agreement with them, which prompted Indian buyers to check all these aspects.
Government Stocks To Determine Tur Future
The government is expected to hold 15-16 lakh tonnes of tur and the future course of price trend will depend on how government handle this huge stock. The balance sheet of Tur for the marketing year 2017 (Jan-Dec) will turn tight if we remove the stocks procured by government from the total availability.
India Tur total availability for MY 2017 estimated at 41.55 lakh tonnes, whereas domestic consumption is pegged at 35 lakh tonnes, thus leaving ending stocks at 5.76 lakh tonnes. If we remove the stock of 15-16 lakh tonnes procured by government, the supply will turnout to be deficit against demand by around 9.24-10.24 lakh tonnes and that is why we are emphasizing that Tur future course of trend will depend on how government manages to release Tur from buffer stock.
Since government has huge stocks lying in their godowns and can dictate prices, thus government must try to ensure to sell Tur stocks above MSP of Rs 5,450/100kg (including Rs 200 bonus) set for Kharif 2017-18. Tur dal availability to consumers is likely to be around Rs 8,000-8,500/100kg in case Tur prices rise and trade between Rs 5,500-6,000. This will not only reduce burden from government shoulders, but also be reasonable for trade participants and consumers as well. In case government liquidate its stocks at market price i.e. below MSP then they have to gear up to procure entire next kharif crop as prices will be below MSP, which seems very difficult for them to do so.
Crop Sowing Report
Tur sowing in the country as on August 2, 2017 fell 20.16% at 37.51 lakh hectares against 46.98 lakh hectares a year ago. The fall in acreage was attributed to farmers reduced interest after sharp fall in prices due to record production in 2016-17 season.
Tur Price Future Outlook
Tur prices in the near to medium term (up to October) may trade better ahead of festival demand followed by concern about kharif crop due to scanty rainfall in key producing regions of Maharashtra and Karnataka. However, the future trend will depend alot on government policy to dispose its huge stocks.
TECHNICAL OUTLOOK
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(By Commoditiescontrol Bureau; +91-22-40015533)
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