Nagpur: After
state government announced a subsidy of Rs1,000 a quintal for
tur and
chana sold by farmers to private traders, market prices of the commodities have further reduced. The move was intended to strengthen the pulses’ rates, but it has backfired, say trade sources.
For nearly a month, rates of tur and chana had been sliding and it took a further dip after the government announced the subsidy last week. The move led to spurt in arrivals of the two commodities at the market, easing the rates.
Tur is fetching around Rs3,450 a quintal in the farm produce markets and chana is in the range Rs3,100-3,200 per quintal. Even if the Rs1,000 subsidy from state is added, the rates still don’t touch the minimum support price (MSP) fixed for both the commodities. Tur has an MSP of Rs5,450 a quintal and chana of Rs4,400.
With the current market rates even after adding the subsidy, a farmer would get a price Rs1,000 below the MSP for tur. For chana, a farmer gets a couple of hundred less than the MSP.
Traders say there are possibilities of prices further going down. Arrivals have gone up after the subsidy announcement, bringing down the prices. Even traders are not keen to offer a higher price eventually knowing that the gap would be bridged by the government, said sources.
“There are several factors which may keep the rates down in coming days. The government itself is the biggest contributor to the bearish trend. Tur procured during the previous year is now being sold in the open market by the government. Tenders are quoting reserve price lower than the MSP. If a huge supply enters the market through government route, prices can
crash further,” said Pratap Motwani, secretary of the Itwari Grain and Seeds Merchants Association.
Arpit Jain of private firm M/s Himalaya Agro Impex said apart from government offloading huge stock at low rates, opening up of imports of 2 lakh tonne is also taking a toll on the rates of tur. “Government wants the prices to firm up so that farmers get a better return, but allowing imports will have an adverse impact,” he said.
“Apart from the quota for 2 lakh tonne granted last month, another 1.5 lakh tonne are expected to come through a memorandum of understanding with Mozambique. As much as 3.5 lakh tonne of additional supply is enough to keep the rates down. Imported tur is already available for Rs2,900 a quintal,” Jain said.
Nikhil Bhojwani, a pulses trader, said even as the total imports are only 5% of the country’s output, it still leaves an impact on the rates. Even the government has no other choice but to sell the tur purchased last year. A spurt in supplies after the subsidy is one the major reasons for the slump, he said.
