Government policy and a good soil moisture profile are boosting prospects for India’s upcoming rabi crop of pulses, and that doesn’t bode well for Canadian pea and lentil exports.
India’s general elections will take place in April or May of 2019, and the existing government has been doing everything it can to raise domestic pulse prices, according to a recent report by the U.S. agricultural attaché for India.
“These policies are in part being driven by an effort to win over the support of India’s largest voting population — small, rural farmers who are protesting declining farm incomes and distress sales when domestic prices fall below minimum support prices,” stated the report.
The latest government initiative is a target of achieving an additional 1.5 million tonnes of rabi or winter season pulse production over last year’s record-shattering 15.89 million tonne crop.
Reuters reports that the government hopes to accomplish this goal by encouraging pulse production on rice fallow in eastern India and by funding various programs to encourage pulse cultivation in 5,000 villages in northeastern states.
Brian Clancey, editor of Stat Publishing, said another 1.5 million tonnes of rabi production would further reduce Canada’s pulse export prospects to its former number one market.
“If these policies are successful in boosting production or maintaining production I think you can basically count India out until 2020 or 2021,” he said.
Vivek Agrawal, director of JLV Agro, an Indian commodity brokerage firm, thinks it will be difficult for the government to meet its objective.
Pulse prices in India are depressed due to overproduction. Growers harvested a whopping 11.2 million tonnes of chickpeas in 2017-18, so farmers may shy away from planting more pulses.
Agrawal believes India will need to import pulses in 2018-19, but not as much as in previous years.
Clancey wouldn’t be surprised if rabi pulse acres stayed the same as last year because while this year’s monsoon rains were nine percent below normal nationally, the northern states where the rabi pulses are grown received good moisture.
A new soil moisture forecast map, the first of its kind for India, confirms that conditions will be good for seeding.
The joint exercise by the Indian Institute of Technology Gandhinagar and the India Meteorological Department is a map showing the forecast for Oct. 25, when rabi crop seeding begins in earnest.
The map shows deficit soil moisture in much of southern and northeastern India but normal to surplus conditions in central and northwestern states such as Rajasthan, Maharashtra, Madhya Pradesh and Uttar Pradesh, where the majority of the rabi crop is grown.
According to the attaché report, nearly 90 percent of India’s pulse-growing regions are dependent on natural rainfall rather than irrigation, so adequate soil moisture heading into the growing season is critical.
The other factor that will influence rabi planting decisions is the government’s minimum support prices for pulses.
The government recently increased its rabi pulse minimum support prices by about five percent over last year’s levels. That was below farmer expectations of a 15 percent hike.
The increase was also muted by a weak rupee that will drop the minimum support price by about three percent in U.S. dollar terms, said Clancey.
“The increase in the MSP was nothing amazing,” he said.
The bigger question than acres is what will yields be?
Last year’s average yield was at the upper end of the long-term average. That could happen again if there are timely rains given the good soil moisture heading into rabi seeding.
Canada’s bulk pea sales are off to a slow start with India out of the market. Exports were 410,100 tonnes through week nine of the 2018-19 shipping season. That is 45 percent below the previous year’s pace.
However, Clancey thinks as the year progresses strong exports to China and increased sales into the livestock feed sector will result in ending stocks of 423,000 tonnes, down from 650,000 tonnes the previous year and right in line with the previous five-year average.
Bulk lentil sales are above last year’s pace with 102,600 tonnes shipped out through week nine, a 45 percent increase over the previous year.
Stat Publishing is forecasting 741,000 tonnes of carryout, down from 876,000 tonnes last year but still well above the long-term average.
Ending stocks of greens will be up significantly, while supplies of reds will be drawn down, said Clancey.