Canada and India have missed the Dec. 31 deadline to hash out an agreement on a longstanding trade irritant.
In February 2018, Canadian Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi agreed to have their respective plant protection officials come to an agreement on the fumigation issue before the end of the year.
But no deal has been reached and that is troubling, given there are signs that pulse exports to India could resume later this year.
“We’re not aware of any finalization of any agreement,” said Carl Potts, executive director of Saskatchewan Pulse Growers.
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“Unfortunately, it looks as though India is going to need more time on this particular topic. I don’t know the specific reasons why this agreement hasn’t been reached.”
India has had a requirement dating back to 2004 that all grain shipments be fumigated with methyl bromide at the country of origin.
The fumigation policy was put in place to eradicate stem and bulb nematodes in grain shipments. If the pest gets into the country it could destroy India’s cherished onion and garlic crops.
Methyl bromide is the only fumigant that kills pests at all four stages of development, which are egg, larvae, pupae and adult.
However, it is too cold in winter to fumigate shipments in Canada.
Canada has submitted a data package to Indian authorities showing that between August 2013 and August 2014 the Canadian Food Inspection Agency took more than 2,000 samples of pea shipments destined for India and none of them tested positive for ditylenchus dipsaci, which is the species of nematode on India’s plant quarantine orders.
Canada wants India to accept its systems approach to ensuring shipments are free of the pests of concern.
In September 2018, Canada hosted a delegation of Indian plant protection officials to demonstrate first-hand how the system works in hopes that it would convince them to sign an agreement.
Instead, on Dec. 27, 2018, India renewed a six-month exemption allowing Canadian exporters to ship pulses to India without fumigating.
The exemption comes with the stipulation that exporters have to pay five times the regular inspection fees upon arrival in India.
For a 50,000 tonne vessel, the five times inspection fee, supervision fee and fumigation fee would amount to about $740,000 for a Canadian exporter, according to Pulse Canada.
U.S. exporters only have to pay a single inspection fee, so the same shipment would cost them $148,000 in fees.
Potts said the fumigation issue is a moot point now because little business is taking place with India due to the imposition of import duties and quotas. But getting an agreement in place is still a priority.
“We feel that this is a very important topic to have resolved when India begins importing again,” he said.
“That’s why our attention continues to be on this even though there isn’t a lot of trade that’s happening.”
Some analysts believe India could soon be lifting the restrictions due to poor rabi (winter)crop prospects.
Rabi seeding is almost complete and so far Indian growers have planted 2.4 million fewer acres of pulses than last year.
Chuck Penner, an analyst with LeftField Commodity Research, said in a recent article he wrote for Alberta Pulse Growers’ Pulse Market Insight that it is dry in India’s main pulse growing regions.
The 2018 monsoon rains were nine percent below normal and rabi season precipitation has been even worse. Rainfall between Oct. 1 and Dec. 31 was 44 percent below normal, according to the India Meteorological Department.
“If this situation doesn’t improve quickly, Indian crops of chickpeas, peas and lentils will be sharply reduced and this will force the government to open the borders to imports as domestic prices start to rise,” said Penner.