The crop is used as a substitute for chickpeas in India, and chickpea supplies are tight because of use in COVID food aid
Don’t count on India easing its yellow pea import restrictions in 2020-21, says an analyst.
“My own sense is there is huge apprehension in government circles about opening up imports,” G. Chandrashekhar, senior editor with the Hindu Business Line told the Global Pulse Confederation in a recent podcast.
“That probably may not happen.”
Canadian yellow peas are used as a substitute for Indian chickpeas in popular dishes like dahl when desi prices are high, which is the case today.
Desi chickpeas were selling for about 5,250 rupees per 100 kilograms in India last week, which is about 31 percent higher than six months ago.
The commodity is trading at 10 percent above the government’s minimum support price, which hasn’t happened since 2017.
Desi chickpea supplies are tight in India partially because the government has included it in its COVID-19 food aid packages.
The government has been doling out one kilogram of pulses per month to about 185 million vulnerable families.
Chandrashekhar estimated that has drawn down government chickpea stocks by 1.5 million tonnes.
The other main factor is the government’s import restrictions on peas. There is a 50 percent duty on peas in addition to a 150,000 tonne annual quota. There is no quota for yellow peas; it is all for green and other classes.
The result is that 1.5 million tonnes of annual yellow pea imports have been displaced by desi chickpeas.
That amounts to three million tonnes of additional desi chickpea demand between the COVID food aid program and the extra business caused by the shutdown in the pea trade.
But while prices are on the rise they are not at a level that is causing food price inflation concerns.
Chandrashekhar estimated that prices would have to climb to around 6,000 rupees per 100 kilograms before the government contemplated easing pea import restrictions. That is doubtful, he said, although it did happen in 2017.
Marlene Boersch, managing partner with Mercantile Consulting Venture, agrees that India is unlikely to lift pea import restrictions because the government is clearly determined to increase domestic chickpea production.
“In my mind the easiest way to do it is to keep the yellow peas out,” she said.
“If you cut out the lowest cost pulse, you basically lift everything up a little bit.”
But she isn’t too concerned about losing India these days because Canadian peas have been flying out the door to China.
Canada has had a front-loaded export program with about one-third more peas being shipped in the first three months of 2020-21 than the previous fall. And last year’s fall export program was no slouch.
Peas have become very competitive in China’s feed sector due to rising soymeal prices.
“My anxiety about where the peas are going, and do we have the India market or not, has gone away,” said Boersch.
The strong export program to China has resulted in solid prices of $8.75 per bushel for yellow peas and $10 for greens.
Chandrashekhar said India’s rabi or winter crop seeding is underway. This is the season where farmers grow their chickpeas, lentils and peas.
Growers typically plant 37 million acres of rabi pulses, including 25 million acres of chickpeas. That number could rise this year due to the high prices and ideal seeding conditions.
“Because of the extended monsoon, the soil moisture conditions are very, very favourable for rabi planting,” he said.
The country also has about 100 water reservoirs that are all full or nearly full.
“One can expect very enthusiastic planting of chana (chickpeas) for the upcoming rabi season,” said Chandrashekhar.
That could help replenish supplies of the crop.
Boersch isn’t so sure about projections for increased plantings because prices for competing crops like soybeans are also attractive.
“The larger farmers will be very happy to grow some of the major grains at better prices,” she said.