MarketsFarm — An extension of zero-rate tariffs on lentils moving into India for another year should be a clear sign that the country is in the market for imports.
However, Canadian lentil sales to India face stiff competition, with a large Australian crop likely to limit movement going forward.
India announced at the end of December that it would continue to exempt import tariffs on lentils through March 2024. The lack of tariffs applies to all countries except the U.S. and had been set to expire in March this year. India is one of the world’s largest consumers of lentils and adjusts its tariff rates from time to time to better moderate domestic retail prices.
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Canadian lentil exports to India can ebb and flow depending on India’s domestic policies in any given year. Bulk Canadian lentil exports through December 2022 of 201,800 tonnes roughly double what moved during the previous drought-stricken year, according to Canadian Grain Commission data. That marks the largest movement through the first five months of the crop year since 2016-17.
Australia is forecast to grow a record 1.055 million-tonne lentil crop in 2022-23, marking the first time that production topped one million tonnes for the country. Australia is at a freight advantage to India compared to Canada and is expected to be a major supplier over the next year.
Market analysts expect India could be in the market for as much as 900,000 tonnes of lentil imports in 2023, but note Canadian prices will likely need to come down in order to compete with Australia.
Red lentils in Western Canada are currently priced at around 30 to 33 cents/lb., having lost about two cents off the top end over the past month, according to Prairie Ag Hotwire data.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
