India pulses to stay dear, export ban seen toothless

By Rajendra Jadhav

MUMBAI (Reuters) - India's decision to extend an export ban on pulses to ease domestic prices that have soared is largely seen as a toothless move, industry officials said.

India on Monday extended a ban on pulses exports for another 12 months, the second since it was first clamped in June 2006.

"We had been exporting only around three percent of total production. So, an extention of the ban will not have any effect on domestic prices," said Gopal Kogta, president of Pulses Manufactures and Exporters Association of India.

"The market was expecting this decision. Sentiments may change in short term, but prices will remain firm due to the lower production," said Chowda Reddy, an analyst at Karvy Comtrade.

Prices of pulses, a staple food for most Indians, have risen significantly in the spot market in the country that is the biggest producer and consumer of the nutritious commodity.

In the Delhi market, the spot price of chana, a major pulse, has risen 21 percent to 2,625 rupees per 100 kg in last three months. In Mumbai, yellow peas rose 32.3 percent to 2,211 rupees per 100 kg in the last one year.

In a year of surging inflation -- it hit a 14-month high in mid-March -- the winter crop output too is likely to fall by 8.8 percent in 2007/08, against 9.4 million tonnes last year.

The lower ground water level and scarcity of rains would lead to lower yield of winter pulses, said Hari Kishan Periwal, a trader based in Bikaner, Rajasthan.