India said to resume Canadian lentil purchases

Canada is resuming lentil trade with India, according to an Indian commodity broker.

“I’ve heard that four or five vessels of lentils have already been traded by the big companies,” said Vivek Agrawal, director of JLV Agro.

The vessels are supposedly booked for shipment in May or June.

G. Chandrashekhar, senior editor of the Hindu Business Line, has heard the same reports that Indian importers have purchased 500,000 tonnes of Canadian lentils in anticipation of a reduction in the country’s import duty on the crop.

Agrawal said there are widespread rumours that the government of India will drop the tariff to 10 percent from 30 percent, likely sometime in mid- to late-May.

He expects the reduction will be for a minimum three-month period but possibly as long as six months.

The lower tariff rate would make Canadian lentils that are trading at $760 to $780 per tonne competitive in the Indian market.

The government is considering a reduction in the tariff because farmers are harvesting what the trade anticipates will be a one million tonne rabi or winter lentil crop. That would be well below the government target of 1.35 million tonnes.

India annually consumes between two and 2.2 million tonnes of lentils and there is no carryout from the previous year, so supplies will likely need to be bolstered through imports.

Saurabh Bhartia, Viterra India’s senior trader, recently told the Global Pulse Confederation that he anticipates 800,000 to one million tonnes of imports in 2021-22.

Agrawal noted that red lentils are consumed in the eastern part of the country, which is a price sensitive market. If prices climb too high, people will switch to cheaper pulses.

Green lentils are consumed in southern India as an alternative to pigeon peas when pigeon pea prices are high, as they are today.

Agrawal said the anticipated reduction in import duties could extend into the 2021 Canadian lentil harvest period.

He does not foresee an Indian government reduction of import restrictions on yellow peas despite what many in the trade believe will be a much smaller than anticipated Indian rabi chickpea harvest.

The trade is forecasting around eight million tonnes of chickpeas versus the government target of 11.5 million tonnes.

However, chickpea demand in India has subsided due to the government’s COVID lockdown of the country.

Chickpeas are selling for 55 rupees per kilogram. Prices would have to rise above 65 rupees per kg before the government takes any action on reducing yellow pea import restrictions, said Agrawal.

Contact sean.pratt@producer.com

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