Pulses will likely be on the menu as Prime Minister Trudeau meets with his Indian counterpart, Prime Minister Modi, later this month, but Canada’s pulse sector is counting on them also being on the business agenda.
There’s no mention of pulse crops or India’s steep tariffs on Canadian pulse exports in the notice from the Prime Minister’s Office about Trudeau’s trip to Canada’s largest pulse export market February 17 to 23.
Since November, India has imposed a 50 percent import tariff on peas, a 40 percent tariff on chickpeas and a 30 percent duty on lentils, as well as a 10 percent duty surcharge on imports in general (peas are exempt). Changes to India’s fumigation requirements have also affected pulse imports from Canada.
“India has really changed its direction. It is serious in trying to become self-sufficient in pulses, and so they’re looking at what they need to do in addition to having a very high domestic support price,” explains Gordon Bacon, CEO of Pulse Canada, adding that support price for lentils in the country is now around 38-39 cents/lb — “well above global prices.”
India’s prime minister recently criticized the rise of protectionism around the world in his remarks at the World Economic Forum in Davos — comments that open the door for Trudeau to engage him in a conversation about pulse trade, says Bacon.
“Prime Minister Modi’s comments provide a good opening discussion point as Canada wants to expand trade in a wide range of products. Pulses are the traditional base of trade, and we have a problem,” he tells Shaun Haney in the interview below, filmed at FarmTech in Edmonton.
While the timeline is unpredictable, Indian consumers’ sensitivity to rising pulse food prices will eventually force the government to remove the heavy duties, notes Bacon.
“It was only 18 months ago that the Indian government was launching investigations into pulse price fixing and hoarding of stocks. They were going in and raiding traders’ offices because pulse prices were very high and consumers were complaining…We have volatility in pulse prices.”
And it’s for that reason that Trudeau and Modi — and their people — “need to be talking about is how we create transparent changes in government policy so the marketplace isn’t shocked,” says Bacon, noting those conversations should already be taking place behind the scenes.
Trudeau is not the only Canadian politician headed to India this month.
Alberta Agriculture Minister Oneil Carlier announced this week that he’s headed to India February 9 to 17, with a focus on addressing the pulse tariff and fumigation issues. Carlier is slated to speak at the India Pulse Conclave 2018 — a biennial conference hosted by the India Pulses and Grains Association — on February 15 in Delhi.
Take a listen to our full interview with Pulse Canada CEO Gordon Bacon, for insight on the situation in India, what political discussions might look like, as well as misunderstanding around maximum residue limits, the domestic pulse market, and product innovation opportunities.
Note: This interview was filmed at FarmTech, February 1, 2018. On February 6, India announced a 10 percent increase to its duty on chickpeas, raising the import tariff from 30 to 40 percent. Alberta Agriculture Minister Oneil Carlier is headed to India February 9 to 17, with a focus on addressing the pulse tariff and fumigation issues.