MUMBAI, Maharashta – India will think twice before buying Canadian lentils in the future, said a broker who was stuck with poor quality Canadian lentils.
“It will affect our future trading,” said Atulkumar Mulji with AM Futures. “We will personally inspect the cargo and barter with them in future.”
With 150,000 tonnes of Canadian lentils being unloaded at port, Mulji is upset by the samples that have been sent from the ships to his office.
Sifting through the samples he picked out split, discoloured, undersized and underweight seeds. Out of every 100 containers only 10 are good quality, he said. “The rest are inferior.
“You can’t pay premium on this when it’s 90 percent inferior,” said Mulji from his office across from Mumbai’s main lentil trading market. “We are very much distressed by the trade of lentils. Next year we will take better care in bargaining with Canada.”
With Canada selling more than $539 million worth of pulses to India each year, this year’s poor crop is a serious problem.
India is the world’s largest producer, importer and consumer of pulses. Each day, 3,000 tonnes of pulses are eaten by the largely vegetarian or semi-vegetarian population.
AM Futures doesn’t buy directly from Canadian sellers but through importers such as Glencore Grain, a multinational trading company, with offices in Mumbai.
Pramod Khandelwal of Glencore Grain said with India’s pigeon pea harvest now underway, few buyers are willing to settle for poor quality lentils.
Pigeon peas are Indian consumers’ number one choice pulse choice. Because of the wide range in India’s geography, newly harvested pigeon peas will be coming onto the market for the next six months.
Khandelwal said no one in cosmopolitan Mumbai is willing to buy an inferior product.
“There are a lot of problems. The quality is so inferior and the buyers are not ready to buy the product,” he said. “Indian millers are asking for huge discounts. If the quality is not fit for humans, it will be a big problem.”
Khandelwal said consumers like to buy product that looks good.
“We Indians are taking the product that feels good to the eye. We have to look, feel and taste,” he said.
“Consumers want a better quality. The market is not receptive.”
About 50 percent of Glencore’s imports to India are from Canada and about 80 percent of those are yellow peas. Luckily, the yellow pea crop suffered less and is in good condition.
Khandelwal said all buyers know about Canada’s difficult harvest and the impact it had on crops across the Prairies. During the interview, Khandelwal received a call about rain delaying Australia’s harvest.
“This year is very difficult to work with it because the weather is playing a big role.”
Khandelwal said the Canadian lentils will be sold, but cost will be the issue. Because of the lower cost of
Canadian lentils, most are bought by the government to go into the public distribution system to feed the poor.
Carl Potts, director of market development for Pulse Canada, said this year’s poor harvest weather had a dramatic impact on prairie crop quality. Many pulses had lower than normal quality, including those shipped to India.
“This year was a challenge.”
He said quality issues often arise between buyers and sellers when there is a softening of price and the buyers are left holding more expensive product in a downward trending market.
Quality problems can also arise when the contract doesn’t specify grades or dockage.
As well, buyers are accustomed to receiving high quality product from Canada.
“If a buyer is used to buying a high grade product, it may not be what he’s accustomed to.”
Potts believes good communication between buyers and sellers is needed, especially in years with plenty of lower quality product.
Specific quality standards need to be set out in the contract to help alleviate product concerns once the product has reached its destination.