Two developments in India could affect sales to Canada’s largest pulse customer.
The most immediate is the country’s steadily weakening currency. The rupee is at its lowest point in history compared to the U.S. dollar.
That makes imports more costly, but it could play out in Canada’s favour, said G. Chandrashekhar, a member of the editorial team for the Hindu Business Line.
Yellow peas is Canada’s biggest pulse export to India. It is the cheapest pulse available and India is a price conscious market, which means yellow peas may have a competitive advantage over other imported pulses as the slumping rupee drives up costs.
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Indeed, the weakening rupee doesn’t appear to have affected sales. Bulk pea shipments to India in the first nine months of 2012-13 are up 21 percent over the same time period a year ago.
The other big development is the Indian government’s proposed food security bill, which would deliver heavily subsidized grain to 70 percent of the nation’s population.
Each priority household would be entitled to five kilograms of grain per month at the subsidized rates of three rupees per kilogram for rice, two rupees per kg for wheat and one rupee per kg for pearl millet and sorghum.
The really poor would have an entitlement of 35 kg per month.
The program would cover 75 percent of India’s rural population and 50 percent of its urban population.
Pulses have been excluded from the bill, which Chandrashekhar said is a shame given the sorry state of nutrition for much of the population.
He has been arguing for the inclusion of pulses in the public food distribution system, but the government doesn’t want to do that, possibly because India is not self-sufficient in pulse production and has to rely on imports from Canada and other countries.
Despite the exclusion of pulses, Chandrashekhar thinks there is an opportunity for the food security bill to prompt an increase in Canadian pulse exports.
“When poor people get access to low priced food grains, they will need to consume pulses along with rice and/or wheat,” Chandrashekhar said in an email.
“In India we call it dal-chawal (dal and rice) or dal-roti (dal and wheat bread), so dal or pulse is an integral part of the food plate.
“People will begin to demand and consume more pulses with their low-priced rice and wheat. This in turn can support higher volumes of pulse imports.”
Raghavan Sampathkumar, an international market promotion consultant with Saskatchewan Pulse Growers, doesn’t see a direct impact on pulse imports.
Split yellow peas from Canada are ground and mixed with chickpea flour in India. The flour is primarily used by industry, such as restaurants and food manufacturers.
“Chickpea flour is the main ingredient in a lot of snacks prepared in India,” he said.
“Whatever demand we see for chickpea flour is not from the consumer side.”
Industry is not affected by the proposed food security bill.
Food manufacturers like to incorporate yellow pea flour into chickpea flour because yellow peas are always cheaper than chickpeas.
“Whether the food security bill exists or not, the demand for split yellow peas will be there anyway. It is not going to be significantly effected by any bill,” he said.
As well, Sampathkumar said states that are not affiliated with the ruling United Progressive Alliance government may not embrace the food security bill.
Many states have their own food security laws and many of those laws include subsidized pulses.
He said the food security bill is all about politics because a general election is looming early next year.
“The motive behind the government in pushing this bill forward is nothing but a wish to come back to power,” said Sampathkumar.
