After a year that saw India drop off the map as a pulse importer, some industry officials expect that we could see India re-enter the pulse buying market soon.
“Seeding is going down, the monsoons are weak. So definitely they will need to import. I see that in the next few months we will start seeing some good demand coming out of India,” said Farhan Adam, CEO of Marina Commodities Inc. during the pulses outlook panel at Grain World in Winnipeg Nov. 14.
Last November, India went from the world’s largest importer of pulse crops to basically importing hardly anything overnight after placing import duties on peas. Tariffs for lentils and chickpeas followed soon after. But Adam, along with David Knobs, managing partner of Canpulse Foods, both agree that could soon change.
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In the past India has said it wants to be self-sufficient when it comes to pulse production. However, both Adam and Nobbs agree that isn’t possible.
“That’s just pure luck in the last couple of seasons. But it wasn’t very long ago India was an also an exporter so the idea that at time that they won’t import a lot of product is not out of the realm of possibility,” Nobbs said during the pulse outlook panel, adding farmers have to be forward thinking when pricing out pulse sales and realize situations can change.
For example, Canada has large red lentil stocks as farmers kept holding off on selling because they thought the market had hit rock bottom and would be on its way back up. Instead it has been on decline for 36 months, according to Nobbs.
And while it does look like India will be in need of red lentils soon, Canada will face competition from growing production in the Black Sea region; Turkey and Kazakhstan in particular. Canada will face stiff competition as freight rates will be cheaper from these countries.
“I think the Black Sea is a big issue and we’re going to have to be competitive as growers and that’s all it comes to down to,” Nobbs said.
Yellow pea stocks in India are also getting low, so they may need to start buying them again soon. However, even with the current import duties on pulse crops some of the larger Indian importers have found ways to still import.
“We will see big numbers going out in October and November, going into India under licenses. So they’ve found some sort of loophole and they’re importing red lentils. Recently in the last 10 days we have seen fairly strong demand and it seems that they will continue,” Adam said.
