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NEW DELHI: The Centre has stopped the export of pulses and allowed private companies to import wheat and sugar to control prices, which have registered a steep rise in the last two months.

The decision was taken at a meeting here of the Cabinet Committee on Prices (CCP), chaired by Prime Minister Manmohan Singh. It was attended by Food and Agriculture Minster Sharad Pawar and Finance Minister P. Chidambaram, among others.

Mr. Chidambaram said wheat, sugar and pulses were showing a rising trend, and therefore it was decided to augment supply. "We are confident that with these decisions, inflationary expectations will be dampened."

On the spurt in the prices of vegetables, particularly tomatoes and potatoes, he said it was "seasonal" and was the concern of the State Governments.

Mr. Chidambaram said it was decided to allow bulk purchasers such as bakeries, biscuit manufacturers and roller flourmills to import wheat on private account. Adequate quantities of wheat (35 lakh tonnes) were being imported for the public distribution system (PDS).

Import at zero duty

Later, Mr. Pawar said it was proposed to allow private wheat import on the State Trading Corporation model (at zero duty) before the next harvest to meet the requirements of bulk buyers.

Despite opposition from the Food Ministry, the CCP cleared the proposal to allow sugar import on the Tariff Rate Quota principle till the new sugarcane crushing season, which begins on September 30. The proposal is to do away with the 60 per cent duty, and allow sugar import by private trade only at the countervailing duty of Rs.850 a tonne. The Food Ministry had reservations because of the high prices in the international market. Moreover, sugarcane output is estimated to be adequate, at 191 lakh tonnes against 130 lakh tonnes last year.

Mr. Chidambaram said that in pulses, the gap between demand and supply was usually met through imports. Zero per cent tariff was already notified for import. "Small quantities of exports would be stopped immediately."

According to highly placed sources, between April 2005 and January 2006, 3.8 lakh tonnes of pulses were exported. As against this, the country imported 13 lakh tonnes last year. Between April 2005 and January 2006, 15 lakh tonnes were imported.

Demand-supply gap

The country imports, mainly from Canada, more than half its requirement since there is a yawning gap between demand and supply. The production of pulses was 13.13 million tonnes last year as against 13.92 million tonnes in 2005-06. The demand is around 30 million tonnes.

Mr. Pawar said that till the next kharif season, import of pulses would be allowed at zero duty.

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