India government just lowered the lentil import tariff by 10% and lower the Agriculture Infrastructure Development (CESS) by 10%. A net 20+2% import tariff reduction. Effective date looks to be July 27, with no mention of an expiry date either in writing or from parliamentary video feed. An expiry date would be preferred but means little right now because all know that amendments can occur at anytime. Given India stock limits and risk of policy amendments at a whims notice, trading demand is unlikely to carry same anticipatory behavior as before. Further, volume and fluidity is impaired because container logistics are a mess. Yet this policy announcement underscores a core fundamental piece to big picture view…..India is pulse deficit. Smaller to mediocre crop size in Canada should harmonize with India being a greater import threat to sustain upward price risk. Maybe a little sooner now in context of front loading trading demand.
Four basic market scenarios that define core lentil price cycles. This concept is applicable to many commodities in our Ag space, it’s just that lentils are cleaner to understand because of their uniqueness and limited substitution traits. It has to do with directional change with regard to importer and exporter inventory. Please call or send me an email and I’ll share the detail.
India government released its Second Advance Production Estimates this week for a number of crops. Chana production, equivalent to desi chickpea type, whose harvest has just begun and will be in full swing last half March, was pegged at 11.6 MMT versus 11.1 MMT last year if believe the government, and 9.5-10.0 MMT if believe the trade. A number of industry participants believe this year’s chana crop is closer to 9.5-10.0 MMT. Difference would have significant market implications that apply to all classes of chickpeas, lentils and possibly field peas. It’s must have knowledge and implications if a Canadian pulse grower. Shoot me an email and I can shed insight.