Monsoon bodes well for Indian pulse crop

Farmers have gotten off to an early start seeding the summer crop, and higher-than-normal rainfall is welcome news

Farmers in India are planting the 2020-21 kharif (summer) pulse crop at a torrid pace.

They had sown 20.17 million acres as of July 17 compared to 15.24 million acres a year ago and 18.27 million acres two years ago.

“Kharif seeding is way ahead of the normal pace,” G. Chandrashekhar, a commodities market specialist and writer for the Hindu Business Line, said in an email.

Conditions have been favourable. Monsoon rains between June 1 and July 15 have been 10 percent higher than normal across the country, according to the India Meteorological Department.

The main pulse crop grown during the kharif season is tur, or pigeon peas. Canadian green lentils are imported as a cheap substitute for pigeon peas when India’s crop is poor.

Maharashtra, Madhya Pradesh and Karnataka account for about two-thirds of India’s pigeon pea production.

Rainfall has been 17 percent above normal in Maharashtra, 14 percent higher than average in Madhya Pradesh and three percent better than usual in Karnataka this monsoon season, which lasts through the end of September.

“Satisfactory distribution of rains so far surely bodes well for the growth of crops, including pigeon pea,” said Chandrashekhar.

India’s COVID-19 national lockdown and the country’s loss of economic activity encouraged farmers to get in their fields early, but there is no evidence that helps with yields. It is all about rainfall distribution.

India usually plants about 29.64 million acres of kharif pulses. Chandrashekhar doesn’t believe the 2020-21 crop will be substantially bigger than that despite the good start.

His best guess is that India’s farmers will harvest 3.5 to four million tonnes of pigeon peas this year.

“As of now, I don’t see a bin-busting harvest but surely a large enough crop,” said Chandrashekhar.

Demand for Canadian green lentils will depend on pigeon pea prices, Canadian lentil prices and currency exchange rates.

Stat Publishing estimates Canadian farmers planted 973,300 acres of large green lentils and 265,800 acres of small greens. The total is 1.24 million acres, which is below the previous four-year average of 1.47 million acres.

There are concerns that disease levels could be high with this year’s pulse crops due to excess moisture in pulse growing regions.

Indian red lentil demand has been outstanding of late because of a short rabi (winter) crop. The Indian government dropped the import duty on lentils from Canada and many other exporters to 10 percent from 30 percent through the end of August in order to combat food price inflation.

Vivek Agrawal, an analyst and broker with JLV Agro, said that has caused a massive surge in red lentil trade.

“The quantity of imports is huge in India now,” he said.

“Huge cargoes are on the way with so many vessels coming from Canada.”

Red lentil prices in India are around 5,200 rupees per 100 kilograms. If the strong export pace continues through the rest of July and August, Agrawal can see prices dropping below the government’s minimum support price of 4,800 rupees per 100 kilograms.

If that happens, he thinks the government will reinstate the 30 percent duty right around the time Canadian farmers are harvesting the 2020 crop.

Chandrashekhar agreed that if lentil prices get depressed due to the influx of imports the government will “surely” reinstate the duty, but that decision is still about six weeks away and a lot can happen between now and then.

Much will depend on the progress of the monsoon and the final seeded acreage number, which should be known by the end of July.

He believes imports of Canadian yellow peas in 2020-21 is “nearly ruled out” because of India’s exorbitant import duty and restrictive quotas.

Chandrashekhar had a parting thought about pulse trade between the two countries.

“My problem with Canada is poor relationship building with India,” he said.

“I have often discussed with your ministers and policymakers the need to stop treating India as a market and start working with India as a partner in progress.”

Chandrashekhar said Canada should be helping India with objectives such as food security.

“Canada needs an independent, credible voice in India,” he said.

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