Indian pea restrictions boost red lentil exports

The crop is enjoying increased popularity in the country as the government implements new import hurdles for peas

Red lentil exports and prices are benefiting from India’s crackdown on peas, says an analyst.

The Indian government announced on Dec. 18 that it was restricting pea imports to 150,000 tonnes through March 31. It also limited all imports to the Port of Kolkata, resulting in additional transportation costs for many exporters.

The new restrictions are in addition to an existing 50 percent import duty on the crop.

The Global Pulse Confederation (GPF) reported that the restrictions have completely halted imports of peas.

That is leading to an uptick in imports of other pulses including red lentils, surmises Brian Clancey, editor of Stat Publishing.

“To see lentil demand pick up given that demand for peas has collapsed makes a certain amount of sense,” he said.

That is reflected in the recent run-up in red lentil prices. Bids climbed to 22.5 cents per pound at the start of 2020, up from 20 cents a month ago and a post-harvest low of about 17 cents.

Exports had already been decent prior to India’s new import policy.

Canadian exporters shipped out an estimated 387,238 tonnes of red lentils through the first four months of the 2019-20 marketing campaign, according to Stat.

That is a 22 percent increase over the same period a year ago. Clancey said it helps that red lentils have been the cheapest lentil for a long time.

Bangladesh led the way with 85,981 tonnes of imports, up from 34,866 for the same four-month period a year ago. The speculation is some of that is being re-exported illegally into India to avoid the 33 percent duty on the product.

“Their own demand for legumes has always been reasonable. When it surges you have to think that they are shipping stuff into neighbouring countries too,” he said.

India has been Canada’s second-largest red lentil customer, despite the punitive 33 percent import tariff. It bought an estimated 85,804 tonnes from August through November 2019, a five percent increase over the same period last year.

Turkey was a close third with 83,690 tonnes of imports, up from 26,593 tonnes a year ago.

There have been reports that Turkey had a poor harvest this year. Merve Fettahoglu, finance manager of Goze Agricultural Products, a large Turkish pulse processing firm, said it was a short crop.

“This year, because of yield issues, the red lentil crop will be around 150,000 to 170,000 tonnes,” she said in an article on GPF’s website.

That is half of normal.

Clancey suspects a lot of Turkey’s imports are also being re-exported to neighbouring countries like Iran, Iraq, Syria and Egypt.

Syria used to be a net exporter of lentils but drought and civil strife have transformed the country into a big importer.

India’s winter or rabi crop of pulses is off to a good start. Farmers seeded 3.82 million acres of lentils as of Jan. 3, a five percent decline from last year.

There is ample soil moisture for the crop due to better-than-average summer monsoon rains followed by October through December rainfall that was 40 to 70 percent above normal.

But the rabi crop won’t be harvested until April/May, so there should be opportunities for continued lentil exports to India until that time and that bodes well for the short-term price outlook.

“As long as the demand is there, the market won’t collapse, but it will retreat from time to time,” said Clancey.

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