News

Pulse rate rise hopes high

By Country News

Chickpeas and lentils are set to be greeted with steady prices this year, yet markets are likely to remain volatile and driven by developments in India, according to a recent Rabobank report.

With future pulse price swings set to be driven by any changes in Indian supply, Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon said India had ramped up support policies and programs during recent years to increase its pulse production in the pursuit of attaining self-sufficiency.

‘‘We’re looking at a situation where we have seen a significant uplift in India’s pulse production over the past couple of years,’’ Dr Kalisch Gordon said.

‘‘A lot of this has been put down to the monsoon effect — a couple of favourable years of monsoon — and while that is overridingly still the biggest driver of production in India, there have also been increases in productivity due to government support programs and increased price support which has encouraged production.’’

Dr Kalisch Gordon said this ‘‘massive jump’’ had seen India’s pulse production increase from 16 to 17million tonnes in 2016-17 to 23 to 24million tonnes in 2017-18.

‘‘And until we see a major disruption in their domestic production, it is unlikely India will be back in the market again as a significant pulse importer,’’ she said.

‘‘For changes in policy though such as the extension of temporary bans, the opening of doors for any imports like yellow peas or the removal of tariffs, we expect we’ll need to wait until closer to the middle of 2019 and after Indian general elections.’’

India last year shocked local growers by raising the tariff on Australian chickpeas by 10 per cent to 40 per cent and imposing a 10 per cent import duty on a broad array of goods, which further compounds the blow.

In light of the current situation in India, Dr Kalisch Gordon said pulse markets would ‘‘continue to be on a rollercoaster’’, but one that had a positive trajectory given growth prospects for the Indian market for pulses.

For lentils, Dr Kalisch Gordon said, elevated levels of Australian stocks were expected to limit much more upside in pricing despite low new crop supply.

For chickpeas though, there would appear to be more upside, given Australia’s now-low stocks and small 2018 harvest.

‘‘However, the Indian reinstatement of another three-month ban on the import of dry peas at the beginning of January does not suggest that India is near to removing pulse tariffs which is a dampener on the upside prospects for chickpea prices,’’ she said.