Latest articles

Out of the blue — India’s tax on peas hits growers here

India is our top customer for pulses but the pea tax and ongoing fumigation issue make for ‘a challenging situation’

India’s sudden decision to impose an immediate 50 per cent duty on pea imports has Canadian pulse officials scrambling to find answers — and figure out what comes next.

“This sort of moves us beyond even where India has been before in pulse import duties… more than a decade ago we were at 10 per cent,” Pulse Canada CEO Gordon Bacon said after the Nov. 8 announcement. “So to sort of move to the maximum allowable for peas under WTO (World Trade Organization) rules has surprised us all.”

  • Read more: Surprise Indian duty on peas leaves Canada scrambling

Reuters reported the tariff was meant to support India’s own pea growers after prices fell below a support threshold set by the Indian government.

The move came just as Bacon and Lee Moats, chair of Pulse Canada, were heading to India where the top issue had expected to be whether the country would extend a fumigation exemption for Canadian pulses. That exemption expired in October and the Indian government had said nothing on the matter, throwing into question the ability of Canada to export to its top pulse customer.

The pulse industry was anxiously waiting to find out what’s up on both issues, said Leanne Fischbuch, executive director of Alberta Pulse Growers.

In the meantime, producers wanting to sell peas have limited options, Fischbuch said on Nov. 14.

“If they’re talking to their dealers and their dealers are looking at alternative markets, that’s another option,” she said. “But otherwise, if their dealer is not looking to sell anything at the time, farmers have to bear with it at the moment.

“Until we learn more and the trade sees that there’s opportunity for movement, we’re in a challenging situation.”

One major Prairie pulse exporter used stronger language.

“That is very horrible news for us as exporters,” said Meiyun Li, general manager with ADM Ag Industries in Saskatoon. “India is our biggest buyer of pulses, of peas. So if India doesn’t want to buy, where will our yellow peas go?”

Last year, India’s pea imports — mainly from from Canada, Russia, the U.S., and France — soared by 41 per cent to a record of 3.17 million tonnes. But shipments were already well off that pace this year, with total Canadian pea exports at 849,000 tonnes as of Oct. 29 — half a million tonnes behind exports from the same time last year. Li said demand in China is also down while big pea crops in the Ukraine and Russia are driving down prices.

The only place where there is interest for Canadian peas is in the U.S., according to Li. The U.S. pea crop is down this year due to the drought but “they cannot consume all of our pea production,” she said.

Drought in recent years had been driving India’s imports of pulses and wheat but the return to near-normal monsoons has changed the scenario.

That will also have an effect on wheat markets.

Along with the pea tax, the country simultaneously doubled its tax on wheat to 20 per cent. That’s expected to slash wheat imports, which means both Ukraine (India’s biggest wheat supplier) and Russia will be looking for new destinations for that crop.

“Twenty per cent is basically a prohibitive tariff, and we are likely to leave the (Indian) market,” said Yelizaveta Malyshko of UkrAgoConsult consultancy.

Ukraine had expected to sell as much as 1.6 million tonnes of wheat to India, but that’s now expected to fall to one million tonnes.

— With files from Commodity News Service Canada and Reuters

About the author

explore

Stories from our other publications

Comments