Indian pulse output forecast ‘optimistic’

Government expects bumper crop | Saskatchewan pulse exporter is skeptical, noting India is taking deliveries this spring

One of the world’s largest pulse crop processors is casting doubt on reports about India’s looming bumper crop and forecasts for reduced imports.

“The word from the Indian trade is that seeded acreage is down and the overall yields are projected to be average to sub-average,” said Murad Al-Katib, president of Alliance Grain Traders Inc.

It contradicts official reports from the Indian government, which suggest growers had planted a record 39.99 million acres of pulses as of Feb. 7, up from 37.7 million acres the same time a year ago.

India has targeted a record 2013-14 rabi (winter) season crop of 12 million tonnes. Al-Katib is convinced that projection has more to do with politics than reality.

“The Indian government statistics always have to be weighted towards food stability and food security and particularly in election years,” he said during an interview at the 2014 Sask-atchewan Agriculture Trade Summit.

However, it’s not just the Indian government forecasting a massive crop.

G. Chandrashekhar, associate editor of The Hindu Business Line, said there is consensus in India that the rabi pulse crop will be no less than 13 million tonnes, including nine million tonnes of chickpeas.

In an article he wrote for Saskatchewan Pulse Growers’ February Pulse Market Report, Chandrashekhar said he anticipates a decline in annual pulse imports because of the looming bumper crop.

He expects 2.75 million tonnes of imports in 2013-14, which is well below the usual volume of 3.5 million tonnes.

India is the top customer of Canadian peas and ranks second to Turkey as a buyer of Canadian lentils.

Al-Katib said statistics and estimates out of India can’t be trusted. He believes the best barometer of India’s crop prospects is the country’s purchasing behaviour.

“India is in the market buying April, May and June deliveries, and if they had a good crop they wouldn’t be doing that,” said Al-Katib.

“That bodes well for moving the current (Canadian) crop, and it bodes well for new crop.”

He is also highly skeptical of a forecast from India calling for reduced pulse imports.

Ramesh Chand, director of India’s National Centre for Agriculture Economics and Policy Research, recently released a five-year plan showing India is expected to produce 18 to 21 million tonnes of pulses per year through 2016-17.

To put that in perspective, India produced a record 18.45 million tonnes of kharif and rabi pulses in 2012-13.

“Our rising pulses production will only help in import substitution, and from the current three to 3.5 million tonnes of annual imports it might come down by one to two million tonnes,” said Chand in a Business Standard story.

Al-Katib said Chand’s comment appears to be an Indian government official trying to quell speculation of the potential for future food price inflation.

“The reality is the supply-demand gap has continued to grow, and we project that to grow significantly in the coming decade,” he said.

Vijay Iyengar, chair of Agrocorp, another big pulse exporter, said India continuously talks about producing more pulses, but the biggest subsidies are for crops such as wheat and rice.

“The pulses deficit will always be there, and I think the government is being a bit too optimistic in their forecast,” he said.

Iyengar expects pulse consumption to increase in India because of an ambitious national food security program introduced by the government last year.

Last year’s national food security bill will provide heavily subsidized food to two-thirds of the country’s 1.2 billion citizens.

Beneficiaries of the program will receive five kilograms of subsidized rice, wheat and coarse grains per month at a cost of two to five cents per kilogram, which is well below market rates.

“This has the potential of really being a game changer as far as the overall supply and demand in the growth of the pulse market is concerned,” said Iyengar.

Pulses are not included in the food subsidy program, but they will be consumed in conjunction with increased quantities of wheat and other grains.

As well, it’s possible they will be incorporated into the subsidy program in the future.