Potential Drop in Local Prices Due to Duty-Free Imports of Yellow Peas

Concerns Over Duty-Free Yellow Pea Imports Affecting Chana Prices

Traders have expressed concerns that the recent decision to permit duty-free imports of yellow peas until the end of FY26 could lead to a decline in chana prices, ultimately harming farmers’ earnings. The influx of imported yellow peas, which serve as a less expensive alternative to chana, poses a threat to crop diversification and could destabilize pulse production in India.

In 2017, a 50% import duty was introduced on this type of pulse to promote the domestic growth of chana. However, the current policy enables a continued flow of cheaper yellow peas into the market, which traders and processors fear will drag down local prices. This might compel farmers to transition to more profitable crops, undermining the cultivation of chana that represents approximately half of India’s pulse output.

“We have consistently urged the government to consider reinstating at least a 50% import duty on yellow peas to stabilize domestic market prices and motivate farmers to continue cultivating chana,” stated Satish Upadhyay, Secretary of the India Pulses and Grains Association, during an interview.

Presently, chana prices in major producing states like Madhya Pradesh and Rajasthan hover between Rs 5200 to Rs 5500 per quintal, falling short of the minimum support price (MSP) of Rs 5650 per quintal set for the 2024-25 season. Yellow peas are currently imported from Canada and Russia at around $360 per tonne, roughly translating to Rs 3400 per quintal, and are widely utilized in the production of ‘besan’ (chickpea flour) for snacks. Since December 2023, over 3.5 million tonnes of yellow peas have been imported, with trade sources noting that about 1 million tonnes are currently held by importers, while domestic production stands at approximately 0.45 million tonnes, sufficient to fulfill local demand.

The duty-free imports were implemented to enhance the domestic supply of chana due to a drop in production for the 2023-24 crop year, which fell to 11 million tonnes from 12.26 million tonnes the previous year. According to the agriculture ministry’s third advance estimate, chana output for the 2024-25 crop year is projected at 11.33 million tonnes; however, trade sources suggest it could be closer to 9 million tonnes.

In the meantime, government agencies such as Nafed and NCCF have purchased 0.29 million tonnes of chana under the MSP, against a buffer stock of 1 million tonnes. There are indications that the government has been building chana reserves by acquiring it from farmers at prevailing market prices.

Moreover, the Maharashtra Dall Millers Association has called on the government to halt the duty-free import of yellow peas and reinstate a 60% import duty on Bengal gram, emphasizing that the surge in imports negatively influences market prices.

The Commission for Agricultural Costs and Prices (CACP) has cautioned in its price policy for the rabi marketing season (2025-26) about the adverse effects of yellow pea imports on domestic prices and farmers’ income, recommending a ban on such imports. The government’s policy allowing these imports was initiated in December 2023 and has since been extended periodically.