Pea price doubles in a week as imports grind to a halt over govt curbs

Minimum import price set at Rs 200 a kg, plus 50% duty; entry only through Kolkata port, which would spike transportation costs to other parts of the country

Import of peas has come to a grinding halt after the government changed its status from the ‘free’ to the ‘restricted’ category and levied a minimum import price (MIP) last week.

The Union ministry of commerce last week issued separate harmonised system (HS) code (issued by the ministry to identify goods of import) for all peas (including yellow, green dun and kaspa) and changed its status. The ministry also levied Rs 200 per kg as minimum import price (MIP) to restrict its import.

While several thousand tonnes of peas in a number of consignments await the government’s release order, Indian importers have halted signing further contracts for future imports. This is because the quantity surpassed the 150,000 tonnes annual import quota fixed by the government.

Apart from that, the MIP levy has made its import uneconomical. Chickpea (chana) is abundantly available as its cheaper substitute.

“There is no peas import after the government changed its status as ‘restricted’ from ‘free’ and levied MIP of Rs 200 a kg. We, therefore, have urged the government to withdraw both notifications to make at least green peas (an import-reliant pulses variety) available to Indian consumers,” said Jitu Bheda, chairman, India Pulses and Grains Association (IPGA), an apex pulses import body.

India produces fresh green peas, which are only harvested around November-December. There is no dry green peas production in India and the entire demand of about 250,000 tonnes is met through imports.

Over and above the MIP, the government has levied 50 per cent import duty. Thus, the minimum price of peas at the origin works out to Rs 300 a kg. Considering Rs 30-40 a kg for other costs, including transportation, the landed cost of peas works out to Rs 330-340 a kg at Indian ports.

“Green peas is a niche product with a distinct core demand in India and does not have any substitute product that can fulfill the demand. It is, therefore, necessary to remove import restriction on green peas at the earliest,” said Pradeep Ghorpade, chief executive officer (CEO), IPGA.

Meanwhile, against the import quota of 150,000 tonnes, India’s import of peas (including yellow, green dun and kaspa) has been at 550,000 tonnes during the financial year 2019-20. The higher quota is owing to various court orders liberalising imports occasionally.

Complicating its import further, the government has allowed peas import through Kolkata port only. This would add transportation cost further to various parts of the country.

The significance of these changes can be gauged by the fact that the prices of yellow peas have doubled to trade currently at Rs 90-100 a kg in the retail market from about Rs 45 a kg about a week ago.

Experts, however, believe that the government is sitting on 1.5 million tonnes of chickpeas, which needs to be released. The import restrictions on peas are an attempt to open a room for demand of chickpeas, they said.