There was a dramatic reduction in the shipment to India. There are large carry over pulses in Canada this year. Prices have fallen dramatically. So, farmers will look at other crops and there will be about a 15-30 per cent reduction in pulse cultivation in Canada.
Transparency and predictability will be very important for Canadian pulses, says Gordon Bacon, CEO, Pulse Canada. Bacon, who heads Canada’s biggest pulses association, was in Mumbai recently to discuss issues faced by Canadian farmers and exporters selling to India. He spoke to Jescilia Karayamparambil about it.
Canadian farmers are moving from pulses to rapeseed (canola oil) cultivation. Why this shift?
Yes, there has been a change in the way Canadian farmers are looking at pulses. India has been our major customer. Two years ago, we had shipped three-quarters of a million tonnes (7,50,000 tonnes). In the October-December period of 2017, it was less than 1,00,000 tonnes. There was a dramatic reduction in the shipment to India. There are large carry over pulses in Canada this year. Prices have declined dramatically. So, farmers will look at other crops and there will be about a 15-30 per cent reduction in pulse cultivation in Canada.
This could include million acres of reduction in peas and millions of acres in lentils. So, farmers will look at crops that will not only be profitable but also marketable. They will shift to canola and wheat. Therefore, we hope that the Prime Ministers of India and Canada discuss these issues like fumigation, what are the drivers to changes in India’s import levy, among other things.
The levy on chick peas and lentil can go up to 100 per cent. Currently, lentil sits at 33 per cent including levies and tax. With no notice, India can raise it to 100 per cent. It makes it uncertain for companies to know how business will operate in India. This is an important discussion not just for Canadians but also for Indian consumers. About two years ago, prices of pulses were high. India’s politicians were encouraging production of pulses in other countries, to feed demand in India. There was a point when the Indian consumers were complaining of high prices. I think clarity is an important in trade. It gives a clear signal to Canadian farmers for cultivation in 2018.
Can you quantify the losses incurred by pulses exporters?
We have not quantified it. So we don’t know the losses as it is not clearly visible. There were some cargo that were diverted to some other countries, some were defaulted on as buyers did not pick them up. I think it goes back to the need to get stability. There was cargos on their way when it was duty free and suddenly there was a 50 per cent duty. We were hoping that as India changes its policies, it should exempt cargos on their way from such policy changes.
What are the targets set by Canada for pulses into the Indian market?
This depends on the levies that are imposed. We are very active when it comes to looking at other markets for pulses around the world. So we know that short-term is problematic in the pulse market but we are optimistic about the long-term. In Canada alone, we have one billion Canadian dollar invested in pulse fractionation plants, to extract proteins from peas for human food and pet food market. We are seeing rapid growth in China for the same.