The central government made import of yellow peas duty free in December 2023 to stabilize pulses prices, but its usage pattern has shown unintended consequences.
Given India’s demand for gram flour for making batter, sweets, breads and snacks, duty-free yellow pea imports have increased to 2.2 million tonnes in the period December 2023-September 2024. Before December 2023, import of yellow peas was negligible.
“The Center is now working on a scheme under which manufacturers will have to clearly disclose the ingredients on the packaging of gram flour, which will help consumers benefit from lower prices because gram flour made from yellow peas is cheaper than whole gram,” the people said. Much cheaper than gram flour made from wheat.” Said above.
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“The ministry will also write to the food regulator, Food Safety and Standards Authority of India (FSSAI), to ensure that labeling requirements for gram flour made from yellow peas and chickpeas are strictly enforced across the industry,” the first of these said the two persons mentioned above.
“Although yellow peas are safe for consumption, consumers deserve to know whether they are paying for a premium product or a cheaper alternative.”
“The concern is that traders should not make excessive profits from it. Ideally, mixed gram flour should be available at retail as below 50 per kg – not currently 110 per kg,” this person said.
The high margins enjoyed by gram flour manufacturers can be gauged from the fact that the price of yellow peas is quite high. The average price of chana dal is Rs 35 per kg 74 per kg. In comparison, gram flour is being sold in the retail market 110 per kg.
“It has come to our notice that yellow peas are being used in substantial quantity to make gram flour, hence consumers should benefit from the lower prices. Why should traders make such huge profits?” said another person.
“Testing of gram flour samples is currently underway to check the admixture of yellow peas. All major players will be instructed to reduce their prices accordingly,” this person said.
“The government’s decision to allow duty-free import of yellow peas till the end of this year has discouraged farmers from growing this variety of pulses,” said Bimal Kothari, chairman of the India Pulses and Grains Association.
“Since the duty-free import is for a limited period, big companies might be hesitant to introduce yellow pea gram flour separately as they may face shortage of raw material once the duty-free import facility is removed. It is an alternative to pulses like gram and arhar and everyone is taking advantage of it.”
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“Last year, the total production of yellow peas and green peas was around 1 million tonnes, and it will decline further due to cheap imports. It is estimated that by the end of the year the total import will reach about 33 lakh tonnes.
“Duty-free imports were allowed to stabilize prices of pulses, which are a major component in food inflation. Another person said, “It is because of yellow peas that the prices of pulses are under control.”
In terms of gram production, the figures have seen a decline, from 13.5 million tonnes in FY2012, to 12.2 million tonnes in FY2013 and 11 million tonnes in FY2014.
In May, the government extended duty-free import of yellow peas for four more months, allowing it until October. Import is permitted without Minimum Import Price (MIP) and port restriction conditions. However, this duty-free period was extended in September to the end of December.
Import duty on yellow peas was imposed at 50% in November 2017. India imports yellow peas mainly from Canada and Russia. As an important consumer and producer of pulses, India meets a part of its consumption requirements through these imports.
According to the CRISIL report findings, prices of pulses, which account for 9% of the cost of a vegetarian thali, are set to rise by 14% in 2023 due to a decline in production. This reduced the opening stock this year, which further contributed to the increase in thali prices, the CRISIL report said.
India’s retail inflation rose to 3.65% in August from a five-year low of 3.54%. Food inflation, which makes up half of the consumer price index basket, rose to 5.66%.
Queries emailed to the Consumer Affairs Ministry remained unanswered till press time.
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