Ag troubles to keep India as major Canadian pulse exporter

Freelance writer Delaney Seiferling attended a major international pulse meeting in Japipur, India, and filed  this report

JAPIPUR, India — Canadian pulse exports to India have increased over the past two years because of a decline in the Asian country’s domestic production.

India had taken 53 percent of Canada’s red lentil exports and 25 percent of its green lentil exports in the first five months of the crop year, according to Statistics Canada. It took 51 percent of its pea exports.

G. Chandrashekhar, economic adviser to the Indian Merchants Chamber and former commodities editor of the Hindu Business Line, said the gap between the country’s production and consumption will continue to increase unless it addresses the short- and long-term issues at play within its broken agriculture system, which isn’t likely to happen soon.

“This is precisely the problem India is facing,” Chandrashekhar said.

“On the one hand, there are rising incomes, an expanding population and rising demand, but on the other hand, production is behind over two successive years by two million tonnes each year.”

The market stagnation in Indian pulses over the past four years has been blamed on weather, currency volatility, agronomic problems and government regulations. The Indian government issued stock limits on pulses in September to combat rising prices and pulse hoarding, a move that was heavily scrutinized by the pulse trade.

“It doesn’t matter what government it is, whether it’s the Australian, Canadian or Indian, when there is no evidence of market failure, government should stay out of the supply chain,” said a trade member during the Pulses Conclave conference in Jaipur, India, last week.

“In India, there wasn’t evidence of market failure because the supply of goods to the market was sound, in that goods were efficiently making their way to consumers.”

However, Chandrashekhar said broader, fundamental problems associated with India’s agriculture system are underlying the shorter-term issues, including fragmented landholding, a lack of irrigation, inadequate water supply, a lack of rural infrastructure, susceptibility to pests and diseases, inadequate capacity for growers to manage market volatility and a low level of input use.

He said seeding rates in India are eight kilograms per acre, less than half the Canadian average.

“Seed rates are low because this is what the growers are used to,” he said.

A mass-scale, government-instituted educational program would be necessary to change these practices, he added.

The country will face additional concerns over changes in weather patterns, a growing population and perhaps most significantly, land constraint.

“India has 16 percent of the world’s population but only four percent of the world’s land resources,” Chandrashekhar said. “And God does not make land anymore.”

The Indian agriculture department estimates pulse production for 2015-16 at 17.33 million tonnes, which is slightly higher than last year’s production of 17.15 million. Some members of the Indian pulse trade are skeptical of the accuracy of these numbers, estimating they are at least two to three million tonnes too high.

Jonathon Driedger of FarmLink Marketing Solutions said western Canadian growers should keep a few things in mind when making seeding plans this year.

“There’s no question that India will import an enormous amount of pulses again next crop year,” he said. “The question will be how much they actually need to purchase, and that’s hard to say until we have a better understanding of exactly how big their crop is and the quality of it.”

Lentil acres are expected to increase in Canada this year.

Agriculture Canada reported it at 4.4 million acres, while Driedger said he has heard speculation as high as 5.5 million acres. However, he thinks 4.7 million acres is a more accurate estimate with 3.3 million acres of that slotted to red.

He said many prairie growers tell him they are planning to grow reds for the first time or push their pulse rotations, which means a possible compromise in quality.

Pea acreage is also expected to increase this year. Driedger estimates four million acres, while Agriculture Canada estimates 4.2 million acres.

Driedger advises growers to lock in at least some early bids.

“Prices have certainly backed off from what they had been, but anytime you anticipate a large increase in production, having at least some sold is probably a wise idea given that even after holdback, returns are still pretty attractive if growers get a reasonable yield,” he said.

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