The Indian government has taken a significant step to stabilize the prices of essential commodities, tur and urad, by extending the stock limits set under the Essential Commodities Act of 1955. Initially implemented on June 2, these limits were scheduled to expire on October 31 but will now remain in effect until December 31, 2023. This move is aimed at regulating the storage and availability of these pulses in the market to benefit both consumers and the economy.
Government’s Measures for Price Stability
One key alteration in this extension is the reduction in the maximum quantity that wholesalers and large chain retailers can stock. The previous limit of 200 tonnes has been decreased to 50 tonnes, aimed at preventing hoarding and ensuring a consistent supply of tur and urad. This change should lead to more affordable prices for consumers, making these pulses accessible to a broader population.
The revision of stock limits and the extension of the time period are part of an overarching effort to curb speculative practices and facilitate the steady release of these pulses into the market. The goal is to maintain reasonable prices for consumers and ensure a stable market.
Changes in Quantitative Limits
There’s been a change in the quantitative limit for millers and processors as well. Previously allowed to stock either “last 3 months’ production or 25 percent of annual capacity, whichever is higher,” this has now been adjusted to “last one-month production or 10 percent of annual capacity, whichever is higher.” This adjustment further guarantees the regular availability of tur and urad in the market.
Retail Outlets and Depot Levels
Large chain retailers will maintain a cap of 5 tonnes at each retail outlet, but the limit has been increased to 50 tonnes at the depot level. Importers are also allowed to maintain imported stock for up to 30 days from the date of Customs clearance.
Transparency and Compliance
To enhance transparency and compliance, all stakeholders, including importers, processors/millers, wholesalers, and retailers, are now required to declare their stock positions on the Department of Consumer Affairs portal. This measure ensures that everyone involved in the supply chain follows the regulations and maintains accountability.
Challenges in Pulse Production
Despite government data showing significant sowing areas for tur and urad, traders are concerned about potential shortfalls in acreage. Regions that faced inadequate rainfall in August and excessive rains in recent months may experience a substantial yield drop. Late-sown pulses are also expected to contribute to lower production.
Price Trends and the Need for Stock Limits
As of September 25, the average retail price of tur dal had increased by 7 percent from the previous month and 35 percent from the previous year, standing at Rs 149/kg. Similarly, the price of urad dal was Rs 118/kg, reflecting a 2 percent increase from the previous month and an 11 percent increase from the previous year. These price trends emphasize the necessity of measures like stock limits to stabilize and regulate the market.
