India-Mozambique to sign five year pulses contract?

India’s ongoing pulses demand-supply issues has scripted a global phenomenon. More and more countries such as Canada and Australia will use a record number of acres to feed India’s famed love for pulses. In our previous post, we covered a high-level delegation visit to Mozambique. The delegation had travelled to the nation to explore the possibility of importing pulses on a government-to-government basis and explore contract farming opportunities.

It does seem like the delegation’s visit to the African nation could prove successful. Mozambique has been asked to consider supplying tur dal to India for the next five years on a government-to-government basis.

The high-level official delegation headed by Consumer Affairs Secretary Hem Pande which recently visited the African nation made the offer, according to sources from the food ministry.

India has offered to buy tur dal at a minimum support price (MSP) plus carrying and transportation cost, the source said. A draft proposal regarding the same has already been sent to the African nation. The nation is yet to respond to the proposal.

India will pay Rs 5,050 per quintal, inclusive of a bonus of Rs 200 for 2016-17 crop year (July-June). Mozambique’s annual production of pulses is estimated to be around 70,000 tonnes of pulses annually. All of which is exported to India and other countries worldwide.

After the visit, Pande said, “The delegation is back with long-term solution in sight. The final draft is awaiting response of the Mozambique government. The Government of India is expecting positive response as soon as possible.”

He went to label the talks as positive and was hopeful that India’s pulses supply will be more than adequate once the deal was signed.

This is one of the several initiatives the Indian government is undertaking given the growing pressure to rein in the rising prices of pulses in the country. The country’s buffer stock has been substantially built leading to a much needed drop in wholesale prices. The cost of pulses in domestic markets is around Rs 190 per kg due to a shortfall in local output.

A similar negotiation is on between India and Malaysia for tur dal supply for the same rate as the Mozambique deal. Like Mozambique, Malaysia is yet to respond.

India’s domestic pulses production has fallen short by about 6 million tonnes. The demand for pulses domestically was about 23.5 million tonnes as compared to the output of about 17.06 million tonnes in 2015-16 (July-June).

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