India eyes red lentil self-sufficiency

Canada could lose its top red lentil market next crop year, according to a senior Indian government official.

Sunil Kumar Singh, additional managing director of the National Agricultural Cooperative Marketing Federation of India (NAFED), is forecasting that the country will be self-sufficient in red lentil production as soon as 2021-22.

NAFED is a government organization that stockpiles pulses and distributes them to needy Indian families.

India has made huge strides in pulse production with 23.2 million tonnes harvested last year compared to 16.3 million tonnes four years ago, he noted during a webinar hosted by the India Pulses and Grains Association (IPGA).

The country is getting closer to its goal of self-sufficiency in pulses.

Red lentils is the one pulse that has remained in short supply. The country has averaged 1.25 million tonnes of production in the last five years, which falls well short of the 1.9 to two million tonnes of annual consumption.

The crop is primarily consumed in northeastern India in states like Manipur, Assam, West Bengal, Bihar and eastern Uttar Pradesh.

The Indian government has targeted 1.6 million tonnes of red lentil production in 2020-21.

Farmers are off to a good start in achieving that objective, planting 913,900 rabi season acres of red lentils as of Nov. 6, compared to 484,120 acres the same time last year.

The Indian government substantially increased its minimum support price (MSP) for lentils to 5,100 rupees per 100 kilograms.

In the past, the government has been criticized for not properly using the program. That won’t be the case if market prices drop below 5,100 rupees this year, said Singh.

“We will buy every grain available,” he said.

That policy shift is expected to encourage farmers to plant enough acres to grow two million tonnes of the crop next year, said Singh. That would eliminate the need for imports.

If that happens, it would be devastating for Canada’s red lentil sector. India is Canada’s top lentil customer by a long shot. It is on pace to purchase more than one million tonnes in 2020, twice as much as the next biggest buyer.

Mac Ross, director of market access and trade policy with Pulse Canada, said it is no secret that India is “laser-focused” on self-sufficiency.

But that is easier said than done when it comes to pulses, which are primarily grown in rain-dependent areas of the country versus crops like rice and cereals that are planted in irrigated areas.

It is hard to predict what will happen this year, let alone two years from now, he said.

He believes India’s production will remain volatile and there will continue to be times when it is heavily reliant on imports.

However, it is precisely because of that volatility that Pulse Canada has established a goal of finding new uses and new markets for 25 percent of Canada’s pulse production by 2025.

It is too dangerous to be overly reliant on markets like India and China.

There is already a new source of demand emerging for peas in the fractionation industry.

The goal for lentils is 625,000 tonnes of new demand in the foodservice, pet food and food manufacturing sectors.

But it will take time for those opportunities to evolve.

“We’re not going to be able to find a brand new market overnight if one of our major markets shuts its doors,” said Ross.

China was the saviour for the pea sector when India began restricting imports of that commodity.

But China doesn’t allow imports of any other pulses. Canada is seeking phytosanitary approval of lentils, chickpeas, fababeans and adzuki beans but that process could take a few more years, said Ross.

In the meantime, Canada continues to work in conjunction with the Global Pulse Confederation to pressure India into adopting more transparent and predictable trade policies.

It has some influential allies in that fight, including many companies involved in the trade of pulses in India.

Rakesh Khemka, managing director of Uma Exports, said during the IPGA webinar that he estimates India will import 1.05 million tonnes of red lentils in 2020-21, up from 750,000 tonnes last year.

He is forecasting India will need about 600,000 tonnes of red lentils between now and the end of February when the Indian crop will be ready to harvest. It has about 450,000 tonnes on hand so it will need to import another 150,000 tonnes.

Khemka said last year’s crop was much smaller than the official government estimate of 1.1 million tonnes, more likely in the range of 720,000 to 750,000 tonnes.

He said the government needs to do a better job on getting the numbers right so the trade can better plan on how much needs to be imported.

He also criticized the government for its wishy-washy trade policy that seems to change every couple of months.

“We importers need long-term policies,” said Khemka.

He would like to see annual plans for pulse import policies.

The import tariff on lentils has been reduced to 10 percent from 30 percent through Dec. 31, 2020.

But no importer is booking cargo in November or December because it can take three months for the shipment to arrive from Canada and by that time the duty may be back to 30 percent.

Another panelist anticipates the tariff will indeed be heading back to 30 percent on Jan. 1 to protect Indian farmers, who will be harvesting their rabi crop starting in March.

Singh said the government is aware of the trade’s concerns about its interventionist policies.

But he noted that when the government leaves things unmanaged it can lead to the dumping that occurred in 2016-17 when opening stocks of red lentils were a bloated 700,000 tonnes.

That caused the government to take an active role in the lentil trade, which it has been doing ever since. He said importers need to exhibit self-discipline if they want to be left to their own devices.

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