India will be a steady buyer of Canadian pulses for many years to come, says a market observer.
The country imported 2.8 million tonnes of pulses in 2007-08, and that volume is expected to grow by 500,000 tonnes per year for the foreseeable future, said Gurusamy Chandrashekhar, associate editor of the Hindu Business Line.
“At least over the next 10 or 15 years India will continue to remain the largest producer, consumer and importer of pulses in the world,” he told delegates attending Pulse Days 2009, held in Saskatoon as part of Crop Production Week.
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That is welcome news for Canadian growers who typically supply 50 to 60 percent of India’s import requirements.
The market for pulses is expanding in India despite per capita consumption falling to 35 grams per day from 70 grams in the 1950s.
Population growth and stagnant local production are blamed for the increased reliance on foreign supplies.
India’s population of 1.14 billion is growing at a rate of 1.8 percent a year.
“We add one Australia every year. That’s where the opportunity lies,” Chandrashekhar said.
The government is attempting to encourage pulse production by steadily increasing minimum support prices for the crops. However, the policy has failed because farmers see better returns and less risk in growing alternative crops.
In an interview following his presentation, Chandrashekhar said he expects the 2008-09 crop to fall 2.2 million tonnes short of the government’s target.
The kharif harvest last October and November yielded 4.7 million tonnes. The target for that period was 5.7 million tonnes.
He suspected the rabi crop will also be a disappointment when it comes off in April and May despite being 2.5 million acres larger than the previous year.
Chandrashekhar is forecasting 8.5 million tonnes of rabi season pulse production, down slightly from the 8.8 million tonnes produced in 2007-08.
The outlook is puzzling, considering the size and shape of the crop.
Contrary to a report that surfaced in Canada in recent weeks, India’s rabi crop is in good shape.
“Weather conditions so far are good. We have reasonably good subsoil moisture,” Chandrashekhar said.
Temperatures over the next four weeks will be critical in the development of the crop. It needs favourable conditions of 20 to 21 C.
If his rabi prediction is correct, the crop will fall 1.2 million tonnes short of the government’s target.
“That should encourage larger imports to India,” he said.
Another bullish factor for Canadian pulse producers is that India will be heading into general elections in April and May.
“The government will be keen to ensure food prices remain stable and inflation stays under control. Therefore, there will be a tendency on the part of the Indian government to import fairly large quantities in January, February and March.”
However, Canadian producers shouldn’t be satisfied with the prospect of a growing market for their bulk and containerized crop shipments.
There is also growing demand in India for ready-to-cook and ready-to-eat, packaged and branded convenience food. The country’s gross domestic product has been expanding by eight percent per year, meaning consumers have more money to spend and less time to cook.
“That is a segment that is going to expand in the future very, very rapidly,” Chandrashekhar said.
India allows foreign direct investment of up to 100 percent in its food processing industry, and Canadian companies should be taking advantage of that welcoming environment.
“You need to be more aggressive. You are very laid back,” Chandrashekhar said.
