Rain makes ‘decent’ pulse crop possible for India

Country’s traders are feeling the pinch as the government continues
to enforce policies that curtail imports and severely restrict trade

India’s kharif (summer) crop has recovered from a poor start and is shaping up nicely, say analysts.

Monsoon rainfall that was 18 percent below normal for the period between June 1 and July 19 is now four percent above average for the June 1 through Sept. 11 period.

Pulse crop seeding that was more than seven million acres behind last year’s pace as of July 19 had pretty much caught up by Sept. 13.

“The potential exists to have a decent crop,” said Greg Kostal, president of Kostal Ag Consulting.

He does not anticipate any deficit in kharif production and the monsoon rains have filled reservoirs sufficiently that it should aid in rabi (winter) crop output.

“We’re just kicking the can down the road,” said Kostal.

“There is no urgency for the (Indian) government to change its protocol.”

That is a concern for Canadian growers, processors and exporters but it is also a worry for India’s pulse trade as import tariffs and quotas and government stockpiles of pulses are severely restricting trade in the commodity.

“(The trade) is hurting very badly because prices remain the same or decrease so there is no scope of trading,” said Vivek Agrawal, director of JLV Agro, an Indian commodities brokerage firm.

The Indian government is maintaining sizable buffer stocks of pulses. He has heard estimates that the stockpile is 3.5 million tonnes.

“It keeps releasing stocks in the market, catching the traders off guard,” Agrawal said in an email.

“The pulse market is trading below the MSP (minimum support price) and due to this, traders, farmers and dall mill owners are facing tough times and finding it difficult to survive.”

Pulse-splitting mills are buying supplies in a hand-to-mouth fashion, which is causing a decline in the volume of pulse trade and forcing some people to exit the business because there is no ability to generate adequate earnings.

Indian pulse traders are cautious and there is limited buying.

Agrawal said the Indian government has been careful to manage farmer and consumer interests because both groups represent a large block of voters.

“The trader community is currently not their priority,” he said.

Agrawal wants the government to develop a new export policy that will encourage exporters to sell their buffer stocks to surrounding countries like Bangladesh, Sri Lanka and Nepal.

“India can export (to) them and generate foreign revenue as well as create new markets for our pulses,” he said.

But Agrawal worries that pulse exporters like Canada are gravitating away from growing pulses and that will come back to bite India in a year when it has a crop failure.

“(It) is high time that the government of India takes a good and balanced view for the pulse industry from a mid- to long-term perspective and takes care of the interests of all stakeholders of the industry,” he said.

Kostal said anticipatory buying is dead and price volatility has been quashed. He said the government’s heavy-handed approach to managing pulse prices will result in a “retooling” of the pulse industry in that country and in exporting nations. It has already contributed to the demise of ILTA Grain in Canada.

“Those that are survivors will be able to expand and adapt and adjust,” he said.

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