Pulse trade hope revival

Australian pulse industry figureheads are confident India will be back “open for business” within the year, due to the country’s change in government, dwindling chickpea stocks and poor harvest.

The Indian Government placed a snap 30 per cent tariff on Australian chickpeas and lentils, and a 50 per cent tariff on Australian field peas, in December 2017, midway through WA’s grain harvest.

Just three months later, it boosted the chickpea tariff 40 per cent, and then 60 per cent last March.

Pulse Australia chief executive Nick Goddard said the tariffs, designed to protect India’s domestic production and chew through its domestic supplies, had “essentially stopped the trade” and dealt a major confidence blow to Australia’s $1.63 billion pulse industry.

India was Australia’s biggest pulse-buying customer before the tariffs’ introduction, purchasing 1.56 million tonnes for about $1.37 billion in calendar year 2017, followed by Bangladesh at 436 thousand tonnes a year for $359 million.

Australian chickpea exports have plummeted to just 23,741 tonnes since the tariffs were introduced, to March this year.

Mr Goddard said despite the strict tariffs, including a recent extension of the pea import tariff for another 12 months, India’s domestic stockpile of pulses could be depleted by the end of the year, which could provide an opportunity for Australia to get back into the market.

“The expectation is that India will literally eat through their stockpiles of chickpeas (when), and we also understand their winter crop (when was it harvested) is below what was expected,” he said.

“India had large stockpiles, and their recent harvest is lower than expected, so by the end of the year they will be looking to import once again.

“India’s financial year runs April 1 to March 30, and April 1 is a good time to do it legislatively;however, if they need stock earlier, they could ease those tariffs.”

Mr Goddard said the re-election of India’s Prime Minister Narendra Modi last month was a good thing for Australian pulse producers because of his “less interventionist approach to pulse trade”.

“It provides some stability for us, because the pressure of an election has diminished, the government is less likely to make sudden changes in import policies to appease local growers,” he said.

Premium Grain Handlers managing director John Orr said traders would be relieved but “a bit nervous” about the tariffs being lifted.

“Chickpea prices fell from $1000 a tonne to $750 a tonne overnight, which meant those with chickpeas on the water or ready to ship lost a lot of money,” he said.

“We lost money when the tariffs were introduced, but we have been able to redirect pulses to other markets... Sri Lanka, Pakistan and Bangladesh and other parts of Asia.”

Pulse Australia issued guidance notes for the Australian pulse value chain in May, saying this year would “reset the norm” after three years of pulse market extremes.

The notes said monsoon prospects and pulse price inflation could ease trade restrictions, because the government “could not afford” pulses to be affected by price inflation.

AUSTRALIA TO INDIA CHICKPEA EXPORTS

(The pulse marketing year is October 1 – September 30)

• October 2018 to March 2019: 1096 tonnes
• October 2017 to September 2018: 811,900 tonnes
• October 2016 to September 2017: 1.56 million tonnes
• October 2015 to September 2016: 841,896 tonnes