India is hungry for pulses, and an industry analyst says the country’s appetite will last well into the new crop year.
According to the latest production estimate released by India’s agriculture department, the 2006-07 crop will come in at 14.1 million tonnes, one million tonnes below the government’s target.
While India’s supply statistics are notoriously unreliable, pulse crop analyst Greg Kostal of Kostal Ag Consulting said the government’s actions make it clear that the country is short on pulses.
“This is a classic demand-driven market turbo-charged by Indian policy,” Kostal said.
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It began last year when the government temporarily banned pulse exports and dropped its duty on imports, two policy measures that have since been extended until March 2008.
Last week, the government asked state-controlled trading companies to tender 1.5 million tonnes of pulses in 2007, a move that immediately strengthened Canadian yellow pea prices on the expectation that yellow peas will make up the lion’s share of imports.
State-controlled importers receive a 15 percent buying subsidy from the government, which has contributed to some of the highest yellow pea prices Canadian growers have ever seen.
And the news only gets better for pea growers. According to a report in the Indian newspaper The Economic Times, the government expects traders to import up to a record three million tonnes of pulses between April 1, 2007, and March 31, 2008, a 50 percent jump over last year.
An estimated 60 percent of that volume would be yellow peas, mainly from Canada, according to India’s consumer affairs ministry.
The government is desperate to replenish supplies of pulses in an attempt to cap rising food costs, a politically sensitive issue in the country of 1.1 billion people, many of whom rely on pulses as their staple food ingredient.
Kostal said that as far as he can remember, this is the first time government officials seem to be seriously committed to revitalizing the country’s stagnant pulse industry, talking about boosting production by encouraging the planting of pulses and devoting more resources to breeding efforts and irrigation infrastructure.
In the meantime, India continues to be an aggressive buyer of pulses, he said, and price doesn’t appear to be as much of an issue as it usually is in that market.