Strain in ties with Canada could impact import of lentils, say traders
Diplomatic tensions between Canada and India may impact the import of lentils from Canada, as traders look to shift to Australia.
New Delhi: Diplomatic tensions between Canada and India may impact the import of lentils (masur) from the north American nation, a key supplier, as traders said they were unsure of future deals and looking to shift to Australia, the only other country that grows the Indian variety.
India currently depends on imports of about 2.49 million tonnes of pulses, including lentils, annually to meet domestic demand. Higher local production over the past seven years has cut India’s reliance on imports, which stood at a high of 5.8 million tonnes in 2015-16.
India purchases various types of pulses, a group of essential items that often fans food inflation, from a host of countries that grow them, from Myanmar to Mozambique.
The country’s import of lentils (masur), of which Canada is a key supplier, is expected to be higher this year due to lower output of other varieties on the back of a poor monsoon, according to industry projections.
Canada accounts for up to 80% of imported lentils (masur), as it is one of the largest producers globally. However, a smaller crop in Canada in 2022-23 upped Australia’s share in imports to 41%.
While trade analysts foresee disruptions, a government official, who declined to be named, said all shipments of contracted Canadian lentils had already landed and India’s import of the item was increasingly getting diversified.
“India has removed all tariff barriers imposed on US lentils, and along with Australia, we have reliable suppliers,” the official said.
The US however majorly grows green lentils, while Indians mostly consume red lentils, one trader said, requesting anonymity. According to this trader, India’s removal of retaliatory tariff on US lentils could prompt Canadian growers to divert their produce to the US and export from there to India.
Official data shows that in 2021-22, Canadian lentils (masur) accounted for 79% of total imports, which came down to nearly 57% in the next year. India’s consumption of lentils (masur) stands at about 2.4 million tonnes, of which the country produces about 1.2 million tonnes.
“There is likely to be disruption in imports, which may lead to higher local prices. The import trade of masur will now majorly shift to Australia,” said Rahul Chauhan of IGrain Ltd, a commodities firm. Australia already supplies lentils to India, but it accounts for about 20% of total shipments.
India’s lentil purchases could go up to a million tonnes in 2023-24 over the previous year’s 858000 tonne, according to projections by the Indian Pulses and Grain Associations. The country’s output of pulses has increased from 16.3 million tonnes in 2015-16 to 27.5 million tonnes in 2022-23 (according to third advance estimates).