Prairie pulse market nonexistent due to trade dispute

 

WINNIPEG (CNS) – As the Western Canadian pulse crop industry awaits news from Prime Minister Justin Trudeau’s visit to India, two traders aren’t holding their breath.

“I’m not expecting any big announcements or any big headway other than wording like ‘working towards understandings’ and things like that,” said Adam Krieser with Canpulse Foods Ltd. in Saskatoon, Sask.

Trudeau is expected to discuss the fumigation and import tariffs later this week in India. A CBC article, published on Feb. 20, quoted Trudeau as saying he would bring up the pulse crop issues with Indian Prime Minister Narendra Modi on Friday.

While it is encouraging to see Trudeau in India, David Newman with Commodious Trading in British Columbia, doesn’t expect anything to come out of it as the government hasn’t been able to resolve pulse issues in the past.

“(Fumigation is) easy (to fix). You send someone there, you make an agreement, you deal with it, that should be easy…there should even be an agreement that could say if you’re going to put in duties you need to give us 60 days’ notice, so that stuff that is on the water doesn’t get charged duty. Those are easy negotiations,” he said.

Even with the Canadian government on the ground in India for negotiations Newman doesn’t expect any headway to be made, due to Canada having no leverage over India. In the past Canada had been able to make a profit from selling pulses to India when India suffered from bad growing seasons, but lately the tides have shifted with India growing large crops.

“We have the power when they’re going to starve and they have the power when they’re not going to starve. There’s no middle ground. So I really don’t see how (Trudeau) has any hope at all to fix it,” Newman said.

With India currently not an option for selling pulses the market is non-existent, according to Newman. His buyers aren’t rushing to buy anything and growers aren’t rushing to sell at low prices.

“People buy their needs and everyone’s trying to buy as cheap as possible and there’s no urgency, there’s no speculation market, no one cares if there’s a crop or not next year. It’s very difficult to see more than four weeks in advance,” he said.

Lately it is taking Newman three weeks to sell approximately the same amount of pulses he used to sell in one day. Basically he is selling enough to keep processors operating and while Newman is putting out bids for crops, no farmers are looking to lock in prices for the new year’s crop.

Krieser is experiencing similar selling issues. According to him there is fear of what the downside of the market will be, with exporters and processors worried.

“The feel of the market is that nobody is long in the pulse market really other than the farmers right now unfortunately it seems. Nobody sees the need or the market signals to take on a position other than what tomorrow brings,” he said.

Neither Newman nor Krieser expect the market to change any time soon, with Newman saying the current lack of “marketplace” having been the reality for the last few months.

 

Comments

  • murrayw

    With Trudeau working for us in India we are likely to lose the market completely

    • Harold

      Trudeau is only there on 1/2 a days official business, according to his Itinerary, so the rest of the 6 1/2 days, at the tax payer expense, is nothing more than a family holiday and a site seeing tour. In my opinion, it is so transparent that the only reason that Trudeau has gone to India is to gain a publicity camera shoot in order to gain Liberal votes from Canadians at home who are of India’s nationality. Trade between our two Countries are currently about 8 billion dollars and Canada imports from India, pharmaceutical products, woven clothing and fabrics, automotive parts, jewelry and silverware, and those are important to India’s economy so I doubt that even the incompetence of Trudeau and his Liberals can screw that one up. The Prime Minister cannot even answer a simple yes or no question or recognize that he did not give an answer to a question when in the House of commons so I imagine the trade deal will remain as is.

  • Monkeeworks

    It does not matter how many trade deals Canada has. NAFTA or TPP included. If a country does not need or want a product they won’t buy it. If they do need it they will buy from the cheapest source. Not necessarily a trade partner.

    • Bruce

      Of course this is how trade works.

Copyright © 2016. All market data is provided by Barchart Market Data Solutions. Futures: at least 10 minute delayed except as noted. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.
CME groupICE

explore

Stories from our other publications