India is considering lifting an eight-year ban on pulse exports just as farmers harvest what is expected to be a record crop.
Business Standard is reporting that the agriculture ministry will soon recommend that cabinet lift the ban to stop the decline in domestic pulse crop prices.
“Those (recommendations) often get adopted, although once in a while they get rejected,” said Chuck Penner, an analyst with LeftField Commodity Research.
Stat Publishing is forecasting a record 13 million tonne rabi (winter) pulse crop harvest. Growers had already planted a record 38.67 million acres of pulses as of Jan. 24, up nine percent from the same time last year.
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Penner said it will be interesting to see how the Indian government handles the agriculture ministry recommendation, given that it’s an election year.
“The difficulty for the government is to decide, ‘OK, who are we going to try to make happier, farmers or consumers?’ ”
Farmers and farm labourers make up a substantial portion of India’s population.
“To make farmers happy, they would get rid of these export limits or restrictions. That should then push prices higher because they can participate in world markets.”
Penner expects a decision by March 31, when the current export ban is set to expire. That is around the same time that this year’s rabi crop will be coming off.
He doesn’t think lifting the export ban will have much of an impact on this year’s pulse markets because it is too late for Indian farmers to adjust plantings.
However, it could definitely influence pulse markets going forward.
“I don’t think there is any way of spinning it so that it’s a positive thing,” he said.
India used to export desi chickpeas and red lentils before the ban, mostly by truck or train to nearby countries such as Pakistan and Bangladesh.
The ban on kabuli chickpeas was recently lifted, which Penner be-lieves has had a price-depressing effect on that commodity.
He thinks red lentils would be most influenced by the end of the export ban.
In the meantime, it is the forecast of a record chickpea crop that poses the biggest threat to Canadian growers.
Penner said there has been a big increase in India’s chickpea acres, which typically account for 72 percent of rabi pulse plantings.
Pea plantings are above average, and lentil acreage is normal.
“We did have good moisture conditions going in, but for the most part that tap turned off at the beginning of November,” he said.
Parts of northern India have had barely any rain since the beginning of November, which will primarily effect lentils and peas.
“I don’t see big (lentil and pea) yields this year,” said Penner.
It’s a different story for chickpeas, which are more widely grown across the country.
“It could be some significant volumes. It’s not going to be good for Canadian yellow pea exports.”
He thinks exporters will feel the pressure of a record Indian chickpea crop as early as late February.
