CNS Canada — After a year that saw India drop off the map as a pulse importer, some industry officials expect we could soon see India re-enter the market.
“Seeding is going down, the monsoons are weak. So definitely they will need to import. I see that in the next few months we will start seeing some good demand coming out of India,” Farhan Adam, CEO of Marina Commodities, said Wednesday during the pulses outlook panel at Grain World in Winnipeg.
Last November, India went from being the world’s largest importer of pulse crops to basically importing hardly anything overnight, after placing import duties on peas. Tariffs for lentils and chickpeas followed soon after.
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But Adam, along with David Nobbs, managing partner of Canpulse Foods, both agree that could soon change.
In the past, India has said it wants to be self-sufficient when it comes to pulse production. Both Adam and Nobbs agree that isn’t possible.
“That’s just pure luck in the last couple of seasons. But it wasn’t very long ago India was also an exporter so the idea that at time that they won’t import a lot of product is not out of the realm of possibility,” Nobbs said on the panel.
Farmers have to be forward-thinking when pricing out pulse sales and realize situations can change, he said.
For example, Canada has large red lentil stocks, as farmers kept holding off on selling because they thought the market had hit rock bottom and would be on its way back up. Instead, it has been on decline for 36 months, according to Nobbs.
While it does look like India will be in need of red lentils soon, Canada will face competition from growing production in the Black Sea region — Turkey and Kazakhstan in particular. Canada will face stiff competition as freight rates will be cheaper from these countries.
“I think the Black Sea is a big issue and we’re going to have to be competitive as growers and that’s all it comes to down to,” Nobbs said.
Yellow pea stocks in India are also getting low, so buyers may need to start buying peas again soon.
Even with the current import duties on pulses, some larger Indian importers have found ways to still import.
“We will see big numbers going out in October and November, going into India under licenses. So they’ve found some sort of loophole and they’re importing red lentils,” Adam said. “Recently, in the last 10 days, we have seen fairly strong demand and it seems that they will continue.”
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @AshleyMR1993 on Twitter.
