A temporary resolution to a potentially disastrous trade impasse should recharge pea prices.
Canada has negotiated an arrangement with India that allows exporters to ship peas to that market without first fumigating their cargo with methyl bromide.
Failure to reach a solution could have seriously damaged pea markets, said Gordon Bacon, chief executive officer of Pulse Canada.
“Exporters simply had to have a clear, definitive policy so that they could make arrangements to book freight, start buying in the country and ordering rail cars.”
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He estimated Canada could ship as much as 750,000 tonnes of peas to that destination this crop year, rivalling the record $152 million in pea trade with India that occurred in 2001.
That trade was in jeopardy when India implemented a plant quarantine order, forcing certain countries to fumigate pea shipments with methyl bromide to ensure the cargo was free of unwanted pests like stem and bulb nematodes.
Bacon said Transport Canada regulations governing the application of methyl bromide made the process too costly for bulk shippers.
“It really just wasn’t going to be practical at all.”
Since an estimated 80 percent of pea exports to India move on bulk vessels, Canada was at risk of losing a good chunk of its largest market for peas.
Last-minute negotiations between India’s agriculture minister and Canada’s high commissioner to India produced a temporary resolution to what was shaping up to be a disaster for the pulse industry.
India proposed that fumigation of shipments up until Dec. 31, 2004, be dealt with upon arrival on the other side of the Pacific Ocean, clearing the way for Canadian exporters to move product hassle-free during the busiest stretch of their shipping season.
Steve Foster, president of the Canadian Special Crops Association, said the pulse trade breathed a collective sigh of relief when they heard a deal had been reached.
“It’s crucial that it got resolved.”
Processors and exporters had already “reeled in their values to the grower” in response to the uncertainty surrounding Canada’s top destination for peas. Prices are starting to creep back up now that there is an acceptable solution.
“I think the market will rebound. It’s really going to depend on the overall supply now,” said Foster.
Some in the trade were forecasting 3.5 million tonnes of peas back in July, but Foster said regions that thought they would see 50-60 bushels per acre pea crops are now looking at half that amount, placing more upward pressure on prices.
However, there is still some trepidation about India, with exporters wondering how long it will take to discharge their vessels once they arrive at port.
“Everybody is a little bit uneasy just because it’s that part of the world and everything is not cast in stone.”
As a precautionary measure, most of the major pea exporters will be fumigating their cargoes with phosphine gas this fall, a cheaper and safer alternative to methyl bromide.
Bacon said Canada wants India to sign a memorandum of understanding allowing phosphine gas to be substituted for methyl bromide after the temporary agreement expires on Dec. 31.
The agreement also stipulates that during the winter months fumigation has to take place in India because it is impossible to treat shipments in Canada when the temperature falls below Ð5 C.
