The top buyer of Canadian red lentils has all but shut the door on imports for the time being.
In the face of fraud allegations, economic problems and quality concerns, Turkish buyers have significantly scaled back their imports from Canada.
“We had a big program happening but they put the brakes on that in January when (the Turkish government) denied import permits to buyers,” said Saskatchewan Wheat Pool pulse trader Shaun Wildman.
What was a “huge program” in the fall has slowed to a trickle. Part of the problem is that the Turkish government is cracking down on buyers who were falsifying import documents.
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Most of the red lentils that Turkey imports are split and then resold into countries like Iraq, Egypt and India. Buyers brought in duty-free product under the premise that it was going to be re-exported but then sold those lentils domestically.
The buyers have been tossed in jail but the government has been slow to start reissuing import documents.
“The whole Turkish industry is in a bit of a turmoil right now,” said Les Rankin, president of Pulse Canada.
He said some Canadian exporters are “very distressed” about the situation.
In addition to the fraud mess, the Turkish economy has hit the skids. Wildman said the purchasing power of the Turkish lira has dropped about 35 percent in the last week.
The erosion of the Turkish market raises some questions for lentil exporters who still see the country as an important market in the long term.
Last year, Turkey bought 15,000 tonnes of lentils from Canada, nearly 20 percent of its total imports. Until recent developments, it was on pace to surpass that total in the 2000-01 crop year.
Wildman said Canadian exporters can either bypass Turkey and sell split product directly to some of its re-export markets or wait and hope for Turkey to bounce back.
“We’re expecting India to emerge as a bigger buyer of all lentils, including red lentils. Nonetheless, I don’t think you can write off Turkey. It’s going to be there, it’s just a matter of what scope.”
In the midst of the fraud and economic crisis, complaints have arisen about Canadian lentil exports.
“There were certainly some quality complaints raised by the buyers (in Turkey),” said Canadian Grain Commission chief grain inspector Len Seguin.
That’s why the commission sent a representative on a trade mission to Turkey led by the Saskatchewan Trade and Export Partnership. He was there to explain Canada’s grain certification system to Turkish buyers.
Seguin said the main confusion surrounds certification based on submitted samples versus official inspections. He said if buyers are willing to pay the extra costs, they will get more reliable shipments.
