MUMBAI, 2 Aug (Commoditiescontrol): India's yellow pea market is bracing for potential upheaval as the October 31, 2024, deadline looms for the government’s decision on extending duty-free imports. This impending decision is creating significant uncertainty, with the potential to deeply impact domestic prices and ripple through the entire pulses sector.
The Indian government faces a difficult choice. Extending the duty-free period could open the floodgates for Canadian yellow peas to inundate the Indian market. Despite unfavorable weather conditions and a recent drop in crop ratings from 79% to 65%, Canada is expected to produce 400,000 to 500,000 metric tons more yellow peas than last year, thanks to expanded sowing. This potential surge in imports could drive down Indian pulse prices, particularly impacting the sowing of key Rabi pulses such as Chana and Matar.
Conversely, if the government opts not to extend the duty-free period, domestic prices of Matar and Chana are likely to rise, exacerbating inflationary pressures—a significant concern for policymakers in the current economic climate.
India's yellow pea imports surged following the government's approval of duty-free imports. Between December 2023 and May 2024, India imported 1.86 million tonnes of yellow peas, with Canada contributing 45%. However, as domestic prices have softened and inventories swelled, the pace of imports has slowed considerably.
Meanwhile, China, historically a significant buyer of Canadian yellow peas, has shifted its preference towards Russian supplies. Yet, even Chinese demand is waning due to substantial imports in 2023, leaving much of the country’s stock in storage and diminishing the need for fresh imports.
In this landscape, India has emerged as the primary market for Canada’s yellow peas. With both China and India holding substantial inventories, Canadian exporters may be forced to reduce prices to attract Indian buyers. Should the Indian government decide against halting duty-free imports, the market risks being saturated with low-cost Canadian yellow peas, which could further depress prices across the pulses sector.
In light of these developments, several pulses trade bodies are advocating for the government to either ban the import of Matar or impose duties to prevent oversupply and stabilize the market.
The government's forthcoming decision will be pivotal, not only for the future of the yellow pea market but also for the broader dynamics of India’s pulses sector.
(By Commoditiescontrol Bureau; +91 98201 30172)
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