CNS Canada –– India has extended its Friday deadline on a requirement that all pulse shipments to that country be fumigated with methyl bromide — but it wasn’t quite the good news the Canadian pulse industry had hoped to hear.
“India has basically extended the ability for exporters around the world to ship to India without fumigation prior to arrival in India, and in exchange for that privilege, they are charging five times their normal fee” for fumigation at an Indian port, said Gordon Bacon, CEO of Pulse Canada.
“So it’s sort of like we’ve swapped out one requirement for another.”
The new deadline that permits exporters to ship without fumigation before arrival at India is Dec. 31.
Bacon said India currently charges 3,600 rupees, about C$73, per 20-foot container. The additional fee of five times the current rate would equal 18,000 rupees, or C$363.
The number varies from year to year, but Canada typically ships about 20,000 containers of pulses to India annually, so the added fees would cost Canadian pulse shippers about $7.2 million overall.
However, Bacon said, it’s not clear if Canadian exporters will be charged the added fee, based on India’s recent action at the World Trade Organization to remove Canada from its list of countries required to fumigate with methyl bromide.
If Canada is not on the list, he said, how can it be assessed the penalty?
“Does it mean we don’t have to pay the fee? That’s what we don’t have an answer to,” he said.
However, he added, Canadian exporters who ship to India after June 30 need to be aware they may be assessed the additional charge.
Pulse Canada, government officials and others in the pulse industry will continue to ask for clarification from India and push for a longer-term solution, he said.
“Everybody agrees we can’t be having to review everything, every six months or three months or every year, and this has been going on since 2003,” said Bacon.
India requires methyl bromide fumigation to help protect its onion and garlic crops from nematode pests.
Canada’s cold winter temperatures keep crop pests in stored pulses in check, rendering methyl bromide fumigation unnecessary. If its exemption from India’s fumigation requirement doesn’t continue, Canada would have to ship peas and lentils to a third country for fumigation before they could be taken to India.
India buys one-third of Canadian peas and lentils, worth about $1.1 billion last year, according to reports.
— Terry Fries writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.