With production expected to rebound this year following the 2021 Prairie drought, the export outlook for Canadian lentils is brightening as well.
After suspending an 11% tariff on Canadian lentils in February – just seven months after slashing the same tariff from 33% - the government of India announced late last month the suspension would be extended through until March 31, 2023. Given the suspension was originally set to expire on Sept. 30, the move means the 2022 Canadian lentil crop has tariff-free access to the world’s biggest market until at least the spring.
“It’s certainly welcome news. India’s an important market for Canadian lentils and certainly, as a big exporter of lentils, we have a vested interest in seeing markets like in India and around the world recognize the quality and consistency of our product,” said Jeff English, vice-president of marketing and communications for Pulse Canada.
The global lentil trade is heavily influenced by public policy and supply and demand conditions in India. Indian tariff rates for Canadian lentils have generally ranged between 11% and 33% over the past couple of years. From 2015 to 2017, poor weather conditions and a decline in domestic production led India to import more lentils. However, more favourable weather conditions in more recent years have prompted the government to restrict imports.
The latest suspension of the Indian tariff has been linked to the government’s desire to counter rising worldwide food prices. India lentil consumption over the past 10 years has generally averaged about 50% more than its production.
Canadian lentil exports for 2021-22 are pegged by Agriculture Canada at just 1.5 million tonnes, down from 2.32 million a year earlier as production plummeted about 45% to 1.6 million tonnes due to the drought. However, with output expected to return to more normal levels this year, 2022-23 exports are forecast to climb to 2.1 million tonnes.
Canada exported C$510.4 million worth of lentils to India in 2021, which accounted for 77% of India’s total lentil imports, according to Ag Canada.
With Canada’s lentil crop looking closer to normal, English said the focus now is getting the crop in the bin and in position to be exported.
“It’s not quite there yet but harvest is quickly approaching,” he said. “(Another focus) is access to timely and needed rail service. In a year when we still have quite poor rail performance in terms of getting our product to port and off to export markets, what we’re focused on as we head into harvest. . . is to make sure that our railways know what’s coming because we’re expecting a larger crop than last year.”
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