'Dal crisis' is a man-made scam: India Today probe reveals cartel of price-fixers in Naya Bazaar

The dal crisis which recently hit the country was more man-made than natural, a special investigation by India Today TV has revealed.
The channel caught on camera middlemen and forward traders dealing in Delhi’s biggest commodity market - Naya Bazaar - explaining how not just dal, but much of the agricultural produce in India is priced by a cartel of big dealers.
In April this year the price of arhar dal suddenly spiked - dal that was available in the market for less than Rs 70 a kg, jumped to over Rs 200.
While commodity traders blamed untimely rains, an India Today TV special investigation conducted over three weeks exposed that the real culprits were hoarders sitting in Old Delhi.

Posing as farmers who were looking to sell their crop of arhar in the market, the team spoke to several commodity traders who explained how the entire racket is run.
“Big hoarders and commodity traders keep track of agricultural production in such states as Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh and Gujarat. They specially depute a person to track the production and the yearly fluctuations. Thus, they do a complete data analysis. Then they pick up a commodity whose production has been weak - the “loose point” - and start tugging its price. This time arhar was the loose point. It is also happening to urad, which unlike arhar, is not even imported. This is complete fixing,” said one of the dal ‘fixers’ Mohan Lal (name changed).
According to the India Today TV investigation, the big traders of Naya Bazaar act as a cartel. They first engage experts who survey crops in major agricultural states and estimate the prospective yields of each crop.
Another fixer Rajesh Bhalla (name changed) explained the modus operandi.
“While a common man does not know how prices will fare in next 15 days, big firms engaged in commodity trading are in a position to know well beyond that as they hoard a lot. This time for arhar dal, there was just one crop coming in from South Africa. There was less crop in India already. Stock was almost nil. They also measured the stock in Mumbai, then started increasing prices in the market,” Anand said.

The India Today TV team found that the dal scam had its tentacles spread from Myanmar all the way to African countries

The price of arhar dal had shot up to over Rs 200 per kg. The rise is allegedly manufactured by a cartel of big dealers in Naya Bazaar.
According to the India Today TV investigation, while forward trading in agricultural commodities is legal in India, people such as Lal and Bhalla do not operate at the official NCDEX Agricultural Commodity Exchange. Instead, they bet in an illegal ‘satta’ market that operates out of Naya Bazaar. Here the future price of a commodity has little correspondence to the actual produce, instead it depends on manoeuvrings of speculators who scheme many months in advance to make a killing.
Lal told India Today TV that big firms that had hoarded large sums of dal or other produce sell it on their own terms by keeping a margin. While it may appear they stand to loose and not profit if one sees daily fluctuations, it is not so as these companies work over a long term, 3-4 months.
The investigation further revealed that this was just tip of the iceberg. The satta operators manufactured an artificial scarcity.
The India Today TV team found that the dal scam had its tentacles spread from Myanmar all the way to African countries which are major pulses producers. Big importers, mostly based in Mumbai, sent procurement agents to these countries.
Everything is perfectly calculated: how much dal has been produced in India, how long will it take for stocks from Myanmar and Africa to reach India, etc. Importers take delivery of the stock, but hoard it at foreign ports so that prices shoot up in the Indian market.
“Ships from Myanmar carrying tonnes of dal are made to halt for days at ports in Singapore; those coming in from Africa are asked to slow their journey to India. The aim is simple, to create scarcity in India,” claimed Bhalla.
On being asked why rates of foreign imports went up and ours down, he casually said: “It’s all manipulation sir. That’s imported stuff, available in bulk.”
If these fixers are to be believed, the imported stock, available for cheap in bulk, is then sold at inflated prices in India. Mill owners are forced to purchase dal from importers at these hugely inflated rates, who then spike the rates in the wholesale market. Small retailers charge their own premium, making dal unaffordable for consumers.
An importer-retailer nexus exists across Asia and Africa. While these importers and fixers make a killing by manipulating dal prices, farmers struggle to get even the bare minimum for their crops.
As per India Today TV’s findings, arhar might have been the latest target of the commodity cartel, it was by no means an isolated case.
Mewa Singh (name changed) who owns a shop in the Gali Jatwara at Naya Bazaar confidently told the India Today TV team to brace for a spike in the prices of masur and urad next.
“The pulses produced in UP are of better quality this year. The prices will go up by Rs 20-30. Prices of masoor dal will be not as high as that of black dal. Right now black dal is Rs 92-93 a kg and it will go up to Rs 120,” Singh said.

Deadly dal makes a comeback

Khesari pulse which can cause paralysis and was banned in 1961 creeps back into NCR markets as arhar prices soar 

Dal is not just costly, it may well be harmful.
With the price of Arhar rising beyond reach of many consumers, local traders are mixing it with the cheap and low-quality Khesari pulse that was banned by the government in 1961.
A large number of complaints of adulteration have been pouring in from various parts of Gurgaon.
Khesari was once used as cattle feed, but its side-effects were found to be so dangerous that the practice was stopped.

+5 A team of food safety officials conduct a raid at a shop in Khandsa Anaj Mandi in Gurgaon
Experts say Khesari dal contains di-amino-pro-pionic acid which could lead to paralysis of the lower body. It could even cause numbness in the limbs and spine. But traders in Gurgaon have begun selling it to cash in on the Arhar crisis.
A Mail Today investigation revealed that rampant adulteration of dal is taking place.
On Thursday, Mail Today visited Khandsa Anaj Mandi, Dundahera, Mulahera, Surat Nagar, Begampur Khatola, Naurangpur, and villages surrounding IMT Maneser and found adulterated Arhar and Khesari Dal being openly sold.
Officials claim the situation is not as bad in Delhi.
“Khesari dal has been banned since 1961 and orders and circulars are issued every year. We have so far not received any complaint regarding such adulteration in Delhi,” a senior official from the department of food and safety, Delhi government, told Mail Today.

+5 Cheap and low quality khesari pulse was banned by the government in 1961

+5 Khesari pulse is being sold mostly in Gurgaon's industrial belt where a large number of poor, migrant labourers stay
Retail traders in Gurgaon said Khesari dal, available at Rs 40- 50 a kg, is being mixed with Arhar dal and it is very difficult to separate the two because of their striking similarity.
Many migrant labourers who consume it are not even aware of the harmful effects of Khesari dal.
The Khesari pulse was banned by the central government way back in 1961 due to its high degree of Beta-N-Oxalylaminoalanine, a neurotoxic amino-acid in the legume, which results in Lathyrism.
Khesari pulse contains 41 per cent carbohydrate, 31 per cent protein, 17 per cent total dietary fibre, 2 per cent fat and 2 percent ash. It also contains diamino pro-pionic acid which is hazardous to health.
Chief medical officer of Gurgaon Ramesh Dhankhar has constituted a team of food safety officials to raid places where Khesari is being sold. The team has raided 10 shops of Khandsa Anaj Mandi and taken samples of Khesari pulses.

+5 Food safety officials conducted raids at 10 shops of Khandsa Anaj Mandi in Gurgaon
“We have raided 10 shops at Anaj Mandi after we got to know that Khesari and adulterated Arhar Dal are being sold. Shop owners are selling these items at cheap rates. We have taken pulse samples from shops at Anaj Mandi and sent them to the lab,” said S D Sharma, food safety officer of Gurgaon.
Ramesh Yadav, a labourer from Harinagar locality adjacent to Khandsa Anaj Mandi, said people can’t afford pure Arhar dal, which is being sold at Rs 230 per kg, and hence they have been buying mixed pulses at Rs 90 to Rs 100/kg.
“We know the Arhar Dal available in the market is not pure. Despite that we have been buying it as most cannot afford pure Arhar dal at Rs 230/kg,” said Yogesh Kumar, another resident.
Khesari pulse is being sold mostly in Gurgaon’s industrial belt where a large number of poor, migrant labourers stay.
The Khesari crop is produced in Bihar, Uttar Pradesh, Odisha, West Bengal and Chhattisgarh. It reaches Gurgaon through Delhi, Neemach and Hapur Mandi.

குடோனில் பதுக்கிய ரூ.2 லட்சம் பான்மசாலா பறிமுதல்

மதுரை, நவ. 27:
மதுரை உணவு பாது காப்பு மற் றும் மருந் தி யல் பிரிவு அலு வ லர் டாக் டர் சுகுணா தலை மை யில் நேற்று நக ரில் உள்ள ஓட் டல் கள், கடை க ளில் அதி கா ரி கள் திடீர் சோதனை நடத் தி னர். தர மற்ற, காலா வ தி யான பொருட் கள், தடை விதிக் கப் பட்ட புகை யிலை குட்கா, பான் மசாலா விற் பனை நடக் கி றதா என சோத னை யி டப் பட் டது. மதுரை சின் னக் கடை வீதி யில் ஒரு குடோனை சோத னை யிட்ட போது ரூ.2 லட் சம் மதிப் புள்ள புகை யிலை, பான் மசாலா பொருட் கள் இருப் பது கண் டு பி டிக் கப் பட் டது. இப்பொ ருட் களை பறி மு தல் செய்து குடோன் உரி மை யா ள ருக்கு அப ரா தம் விதித் த னர்.

Drive against sale of preservation salt

Stepping up the drive against sale of preservation salt as iodised edible salt, the District Food Safety wing of the Tamil Nadu Food Safety and Drug Administration Department has seized ten tonnes of preservation salt, packed for sale as iodised edible salt.
Couple of days after seizing two tonnes of fake salt, the food safety officials, led by Designated Officer M. Jagadish Chandra Bose, made a surprise visit to a salt pan near Sitharkottai on Thursday and seized the huge quantity of salt packed and kept ready for transportation.
The salt, packed in fake plastic bags and claiming that the iodine level was 30 parts per million when packed was found kept ready for transportation near the salt pan by one Kannan of Pullangudi, Mr. Bose said.
The packets had pictorial display as if it was edible salt, he said.
There was, however, no manufacturing and expiry dates in the packets, he said adding the mandatory batch and lot numbers were also missing in the packs. The warning that it was “for preservation only” was written in small fontand would go unnoticed by the consumers, he said.
The salt in crystal form was priced at Rs. 10 per kg and the packets were meant for distribution to retail shops in the district and neighbouring districts, Mr. Bose said.
Seasonal pans
After many salt pans in Tuticorin district remained submerged in water due to recent rains, there were attempts to sell salt produced in the district for preservation purpose as edible salt, he said. There were more than 200 seasonal salt pans in the district, he added.
Samples drawn from the lot have been sent to the Food laboratory at Palayamkottai for tests, he said adding further action would be taken after obtaining the results. He was accompanied by food safety officers Chellapandi, Karnan and Thangasivam in the raid.

IDMA worried over FSSAI bringing food products approval system

Indian Drug Manufacturers Association today criticised FSSAI's attempts to bring back the 'food product approval system', saying the move is against the FSS Act and if implemented it will put the Rs 45,000-crore packaged foods industry in jeopardy.
Recalling that a Supreme Court order had disapproved the FSSAI attempts for such a system, the association said this led to the relaunch of the popular brand Revital after its ban.
It also alleged the FSSAI is obsessed with bringing back this restrictive trade practice and urged the government to not allow the regulator to go ahead with any such draft notification.
IDMA chairman, nutraceuticals and medical sub-committee, RK Sanghavi said such product approval system does not exist in any country as no food authority globally enforces such laws for consumer safety, once the basic ingredients are approved.
"The industry cannot be told to follow a non-existing regulations. It is the IDMA and the Confederation Of Indian Pharmaceutical Industry (CIPI) which informed the Bombay High Court that FSSAI has been dodging with the regulations since 2011," Sanghavi claimed.
The association also said the industry cannot be barred and restricted to carry out its business unless food safety officers approve of that the articles of food are unsafe.
He said the industry will soon approach the Prime Minister and the Union Health ministry.

Standards for alcoholic beverages: FSSAI continues with the adventure

The Food Safety and Standards Authority of India (FSSAI) has come out with the proposed standards for alcoholic beverages. This draft is divided into six chapters—the first deals with general provisions, such as definition clauses, and the last with labelling. In the other four chapters, the draft lays down applicable standards for ‘distilled alcoholic beverage’, ‘wines’, ‘beer’ and ‘low alcoholic beverages’. Within these chapters, the beverages are classified according to various known types (brandy, whiskey and so on) and various sub-types within each type.
This very structuring is an area of concern. For each type of alcohol, the draft uses the phrase “(this spirit) shall be of the following types.” For instance, in the section governing ‘liqueur/alcoholic cordials’, there is a general definition provided for this type of alcohol. This is followed by the statement that “(liqueur/alcoholic cordials) shall be of the following types,” and thereafter lists nine sub-types. This may be interpreted to imply that only those subs-types exhaustively constitute ‘liqueur/alcoholic cordials’ and that other non-listed sub-types may not be covered even if they may fulfil the main definition. This structure is seen in many locations and the use of the word ‘shall’ in such context and implying a limitation in the varieties doesn’t serve any stated public purpose.
Old wine in new, broken bottle
The proposed draft has been mostly copied from the existing Indian Standards (IS) issued by the Indian Standards Bureau, though there are some interesting departures, such as proposed definition of brandy, which has been defined to be an alcoholic beverage “made from grapes and other fruits that possesses the distinctive colour, odour and taste of its own.” In the earlier IS, brandy could be made from grains also. However, a liquor made from grains alone would not fall within the definition of ‘brandy’ any more. If mixed with 2% grape brandy, it may fall under the scope of ‘blended brandy’.
Some strange modifications have been suggested and standards have not been updated. An example is the proposed draft incorporating threshold requirements of ingredients for various alcoholic beverages. Beverages like tequila, liqueur/alcoholic cordials and some kinds of brandy are missing from table-1, even though the draft requires such beverages to “conform to the requirements of table-1.” No characteristics are provided for several alcoholic beverages, adding to uncertainty. For example, while ‘grape brandy’ must be matured for at least one year in oak vats or barrels, ‘blended grape brandy’ need not necessarily be matured in oak vats or barrels; instead, a wooden vat or barrel may be used. With respect to liqueur/alcoholic cordials, the draft only mentions the use of fruit, cream, herbs and spices as flavourings. Other flavours like chocolate, coffee, nuts, schnapps, honey and caramel have not been mentioned, which may be construed as an implied exclusion of such other flavourings.
A major shortcoming of the draft is its lack of consistency and coherence. This starts right from the definition chapter where 18 terms have been defined, of which seven have not at all been used in the standards. The term ‘alcoholic distillate’ has been used in several places, but has not been defined. On the other hand, the term ‘fermented liquor’ has been defined, but has not been used.
While various standards have been prescribed for different types of alcohol, in several instances such as for wine, beer, low-alcoholic beverages, tequila, liqueur/alcoholic cordials, the draft makes no reference to the method of analysis to be applied or the tolerance levels allowed. For brandy and whisky, the draft makes a reference to the FSSAI Manual of Method of Analysis of Food 2015-Alcoholic Beverages and sets a tolerance limit of ethanol at +/-3%. The said manual itself does not contain any method of analysis or tolerance for all types of alcoholic beverages covered within the scope of draft regulations.
Chapter 6, relating to labelling of alcoholic beverages, presents its own set of problems. The draft clarifies it is in addition to the applicable requirements arising from the Food Safety & Standards (Packaging & Labelling) Regulations, 2011. The draft proposes additional information to be part of the label and clarifies some pre-existing issues. It refers to the need to include a statement of ‘standard drinks’, and for wines the label is allowed to carry the name of a grape variety, only if the wine is made using at least 75% grapes of that variety.
Under existing norms, alcoholic beverages are not legally treated as a single ingredient product and a list of ingredients needs to be printed in English or Hindi. This listing has to be in the descending order of composition and labelling must be such that it cannot be separated from the product itself. This has resulted in problems because alcoholic beverages from several countries do not always contain information on ingredients in the manner contemplated under Indian law and many are not in English/Hindi. Existing rules do not allow such information to be added as a sticker, post-importation in India. Unfortunately, these issues do not seem to have been remedied in the draft.
Given recent developments in the food sector, the efforts of FSSAI to develop such standards in a transparent and consultative manner is welcome. But the draft needs to get rid of errors and inconsistencies and provide a set of robust regulations for alcoholic beverages.
The author is joint partner in law firm Lakshmikumaran & Sridharan. Views are personal