Canada’s pulse industry is paying close attention to statements out of India indicating the government is serious about increasing production of the commodity.
When the world’s largest pulse importer announces plans to become more self-sufficient it puts the world’s largest pulse exporters on notice.
“Clearly if they’re successful in meeting some of their targets, one of the possible scenarios is that less comes in in imports,” said Gord Bacon, chief executive officer of Pulse Canada.
India regularly produces 13 to 14 million tonnes of pulses but consumes 15 to 16 million tonnes, making up the difference through imports. Canada helps fill that gap, sending 22 percent of its pulse exports last year to India.
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Lately, India’s government has talked about reducing its reliance on foreign supplies. The government has come under intense criticism for failing to do anything about rising food prices in one of the world’s fastest growing economies.
It is a touchy issue because food forms a big part of India’s consumer price index, which sets the country’s inflation rate. Pulses are an especially sensitive food item because they are a staple for the country’s 1.1 billion people, many of whom can’t afford price increases.
The food issue has become a political hot potato, garnering coverage in the country’s newspapers and even making the rounds in international publications like The Economist.
Last year, the government began taking aggressive steps to boost pulse supplies to try to ease inflationary pressures by banning exports and eliminating import duties on the commodity. Those measures were recently extended until March 2008.
Senior government officials are now talking about a concerted effort to increase pulse plantings. Farm commissioner N.B. Singh recently stated the government needs to adopt “rigorous measures” to bring an additional five million acres under cultivation, which would bump up production by 1.5 million tonnes.
Industry groups are also taking an interest. The Associated Chambers of Commerce and Industry of India has issued a paper calling for a second green revolution to produce higher yielding pulse varieties to fill the demand gap now met by Canada, the United States, Australia, Myanmar, Turkey and Tanzania.
Canadian pulse officials are not too concerned about what they are hearing out of India.
“Is it doom and gloom? I don’t think so,” said Bacon.
One reason he isn’t panicking is that Indians are capable of eating a lot more pulses. In 1950-51 they consumed 61 grams per capita per day. By 2002 that number had fallen to 35 grams. So an increase in domestic production may lead to a corresponding surge in consumption, having no impact on imports.
Bacon also pointed out that the increase in production could be in a crop like pigeon peas that does not directly compete with yellow peas, which is Canada’s primary export to that country.
Garth Patterson, executive director of Saskatchewan Pulse Growers, said it is one thing to talk about growing more pulses but another to do it.
“The Indian government has been trying to increase pulse acres for years unsuccessfully. Wheat has just proved more profitable.”
He acknowledged the Indian government seems to be taking the production shortfall more seriously of late, but he’s not convinced it can do anything about it in the short term.
Increasing yields through genetics is a long-term prospect and bumping up acreage through government incentives doesn’t necessarily guarantee a decreased dependence on exports.
Over the next few decades India is projected to surpass China as the world’s most populous country, which means it will have a lot more mouths to feed.
It is also one of the countries expected to be hit hardest by global warming. The author of a new United Nations report on climate change said a 0.5 C rise in winter temperatures would decrease wheat yields in that country by 17 percent.
“I’m quite optimistic that they will be a good market for us for years to come,” said Patterson.
Even if sales dried up it wouldn’t be a disaster. India has been out of the market before and Canadian exporters were able to find alternative destinations for their pulses, he said.
